Bevin: Pension Fix To Be Announced Soon

Oct 17, 2017

After months of private negotiations, Kentucky's Republican governor says he is close to calling state lawmakers back into session so they can make changes to one of the country's worst-funded public pension systems.

Credit Associated Press

Gov. Matt Bevin told reporters Tuesday that an agreement with state lawmakers just needs "a bit of i-dotting and t-crossing." He said the proposal is more than 400 pages long, but said "it's going to be easy for people to understand." He promised that the public would have "ample opportunity" to read the proposal, understand it and ask questions about it.

But Bevin would not say when the public would have something to look at.

"It's going to be very soon. We're going to have this resolved," he said.

Kentucky officials are at least $33 billion short of the money required to pay retirement benefits over the next 30 years to state workers, teachers, police officers, firefighters and other local government employees. The Republican majorities of the House and Senate say they won't raise taxes, leaving them with few options to pay down the debt. Kentucky finished the 2017 fiscal year with a $138 million shortfall last year and state economists say taxpayers are headed toward a $155 million shortfall this year.

As governor, Bevin can call the legislature back into session whenever he wants. But lawmakers don't have to pass a bill. If lawmakers don't agree on what to do, they could cost taxpayers hundreds of thousands of dollars to argue for a few days and then adjourn.

That's why Bevin and top legislative leaders have been meeting in secret for months trying to craft a proposal that has enough votes to pass. But the uncertainty has prompted fear among the more than 400,000 active, inactive and retired members of the state's various public pension systems.

But at least one worried teacher has seen the plan: Republican state Rep. Bam Carney. A former social studies teacher, Carney still works for his local school district and is a member of the Kentucky Teachers Retirement System. He said people will be surprised with the proposal, adding it meets all the moral and legal obligations to state workers.

"Obviously there is going to be some sacrifices for everybody across the board," he said. "I feel like I'm getting what was promised to me when I signed my contract years ago. I think that's part of this deal."

But Carney acknowledged the state's revenue problem, adding, "If we don't increase revenue in Kentucky, we've got some serious issues."

Lawmakers have been proposing several new ideas for the state to make more money. Republican state Sen. Dan Seum proposed legalizing marijuana and then taxing it, saying it could generate $100 million a year in revenue for the state.

But Bevin dismissed that idea on Tuesday, noting the state's pension debt could be as high as $60 billion according to some estimates.

"That's 600 years of smoking pot to fix the pension crisis. I don't think that's the solution for Kentucky," Bevin said. "We're going to fix it with constructive changes and not with delusional ideas like that."