When I ran for governor in 2015, I launched a seven-point plan outlining my vision for moving Kentucky forward, entitled the “Blueprint For A Better Kentucky.”
The plan was ambitious and unapologetic in its call to change government, grow our economy and enact policies that would modernize education, health care and our tax code. Above all, I noted that our long-term success runs the risk of being undermined if we do not address the single greatest threat facing Kentucky’s financial future: our public employee pension crisis.
In less than five years, one of our largest pension systems (KERS Non-Hazardous), is projected to run out of money and collapse. This will affect the financial stability and credit rating of Kentucky and will leave us unable to deliver on the promises we made to all our hardworking police officers, teachers, firefighters and other state employees — regardless of which pension plan they happen to be in.
The passage of Senate Bill 151 was an important first step by the General Assembly to address a problem shamefully and irresponsibly ignored by past legislators and governors.
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It was also a meaningful attempt to save our failing pension plans for past, current and future workers. While some of our pensions have undergone modest structural reforms over the years, the Teachers Retirement System (KTRS) has never been meaningfully addressed.
Sadly, the Supreme Court took a specious, political stance and invalidated SB 151 based upon the legislative process used, rather than the law’s merits. In doing so, the court not only dismantled meaningful reform for our pension systems, but also ignored the fact that the Kentucky General Assembly (and most other legislatures in America) have used the same legislative process for decades.
Given the possibility of such a ruling, I began dialogue with the leadership of the General Assembly in the days before the court issued its opinion. In multiple face-to-face and telephone meetings, we discussed a plan to avoid further financial uncertainty and damage to Kentucky’s credit rating in the event that the law was struck down.
Despite what many in the media and general public incorrectly believe, I do not have authority to draft, sponsor or pass the legislation necessary to address our failing pension system. The General Assembly is the only branch of government with the constitutional authority to stop the financial bleeding and save our pension plans. I made it crystal clear that the executive branch stood ready to assist any legislative effort to move pension reform forward.
It was with this mutually acknowledged understanding of responsibilities, that I convened the special session the following Monday. The legislation read in the House chamber that first evening, House Bill 1, was a trimmed-down version of SB 151; the very bill passed earlier this year by the same legislators.
HB 1 simply removed the provisions of SB 151 that were most likely to be challenged in court, which would only result in many wasted months of further litigation. It had been drafted by legislative staff based on specific input from legislative leadership
The bill did not fail due to a lack of planning but, rather, due to a lack of legislative will. The weak excuse that there was not enough understanding among legislators about the contents of HB 1, reflects poorly on the legislative leadership’s ability to communicate with their own members.
Kentucky taxpayers should rightfully be offended by the hollow excuse that the General Assembly adjourned simply because of the minor differences between HB 1 and SB 151.
In a letter dated Dec. 18, the morning after the special session began, my General Counsel Steve Pitt, sent every legislator a letter stating that while our administration was confident in the legal right of the legislature to pass SB 151, the slimmed down version known as HB 1, would lessen the chance of litigation that could slow down meaningful reforms.
It was Pitt and his team who defended in court (on behalf of the legislators who chose not to defend themselves), the legislative process used in the passage of SB 151. If SB 151 truly had more support among legislators, it was their sole prerogative and responsibility to introduce and pass that exact bill back into law. Instead, they chose to continue kicking the proverbial pension can down the road.
In conclusion, and contrary to the myth perpetuated by many members of the media and legislature, the special session was not abruptly called with no warning to, or input from, the legislative leaders. The exact opposite is true. HB 1 was not a surprise to those who were elected to lead on this issue.
The only surprise was the lack of legislative ability to solve the problem during a 2018 special session. I am expectantly hopeful that the General Assembly will return to Frankfort in January with a renewed sense of purpose to address the pension crisis, because continued waffling, punting and excuses are not going to fix anything.
It will take the right combination of knowledge, courage and leadership by a majority of the 138 men and women with the responsibility to save our pensions.