Gov. Bevin says pension relief bill is ready
Kentucky Gov. Matt Bevin said he will call state lawmakers into a special session at 8 a.m. Friday to consider a bill that would provide regional universities and quasi-governmental agencies relief from rising pension costs that threaten to bankrupt some health departments and community mental health centers.
The session is expected to last six days, ending Wednesday, July 24. It takes at least five days to get a bill through the state House and Senate, and the legislature cannot meet on Sundays. The cost to taxpayers will be about $65,000 a day for six days. Lawmakers get paid on weekends even if they do not meet.
Bevin first proposed a bill in April to address the problem after he vetoed a measure lawmakers approved earlier this year to deal with the crisis.
Bevin’s legislative director, Bryan Sunderland, said in June there are enough votes to pass the proposed bill in the Republican-led legislature, but finding a time when all the lawmakers willing to vote for the bill can come to Frankfort has been difficult.
“This bill has been thoroughly vetted and improved with input from legislators,” Bevin said Monday. “It is the only fiscally responsible plan that provides our regional universities and quasi-governmental agencies with a path to a sustainable future.”
Pension costs for regional universities and quasi-governmental agencies, such as county health departments, rape crisis centers and libraries, increased dramatically on July 1 and those bills will become delinquent on Aug. 10 if the legislature doesn’t take action.
Bevin’s proposal extends a freeze on pension costs for another year for universities and quasi-public agencies, holding them at 49 percent of their payroll instead of 87 percent, which is what the rest of state government pays. After that, the public employers must choose: Stay with Kentucky Retirement Systems at full cost or exit the state’s pension system, either by making one lump sum payment to clear their liabilities or setting up a 30-year payment plan that gradually increases each year.
Democrats in Frankfort oppose the plan and have presented two bills of their own, which Bevin dismissed last Friday, saying they made too many assumptions and were immoral.
Three House Democratic leaders — Floor Leader Rocky Adkins of Sandy Hook, Caucus Chairman Derrick Graham of Frankfort and Whip Joni Jenkins of Louisville — said Monday in response to Bevin’s announcement that House Democrats have put forward “a reasonable and financially sound pension proposal” and “we look forward to presenting our ideas when the special session begins.”
They added: “It would be immoral to pass a bill that does anything less.”
House Speaker David Osborne, R-Prospect, said House Republicans have devoted more than two months studying details of Bevin’s proposal and gathering feedback from interested parties.
“We are ready to act on this bill in order to provide relief to quasi-govenmental agencies, regional universities, their employees and the Kentuckians they serve,” Osborne said. “We remain committed to working towards the ultimate closure of this issue during the special session and into future sessions.”
Jim Carroll, president of Kentucky Government Retirees, an advocacy group representing more than 15,000 state retirees and active employees, said Monday his group favors the House Democratic plan that, unlike Bevin’s plan, “does not incentivize employers to leave the system and force dedicated public employees to lose guaranteed future pension benefits.”
Carroll said his group takes no position on how many votes are needed in each chamber to pass a bill in a special session in an odd-numbered year.
Republicans say a simple majority, such as 51 in the 100-member House, is needed, but Democrats claim a super majority, or 60 out of 100 House members, is necessary. Democrats have said a lawsuit may be filed against the legislation if it does not win a super majority in each chamber.
Brian O’Neill, spokesman for Kentucky Public Pension Coalition, which represents current and retired state employees, said Bevin’s proposed legislation is “illegal and irresponsible.”
“It pushes employees to illegally break their inviolable contract with current employees and irresponsibly incentivizes a defined-contribution choice for newly hired quasi-government employees, which will only harm the overall funding of the Kentucky Retirement Systems,” O’Neill said.
This will be the second special legislative session Bevin has called. He assembled lawmakers a week before Christmas last year to consider pension reform but lawmakers adjourned on the second day because they lacked the votes needed to pass a bill. Only the governor can call a special session and set its agenda but lawmakers determine how long it will last.