Lawmakers Look For Common Ground On Pension Issue

Mar 7, 2013

FRANKFORT, Ky. -- House and Senate leaders were optimistic Thursday that they could find common ground on government pension reforms as they move into the final days of a legislative session.

One of the major sticking points is a Senate proposal to create a 401(k)-like retirement plan for new employees. The House adamantly opposes it.

Sen. Joe Bowen, the Owensboro Republican who chairs the Senate State and Local Government Committee that crafted the pension bill, said reaching an accord depends on the willingness of House Democrats to compromise in the final four working days of the session.

"There's always hope because there is still plenty of time left, but we're not going to concede to a position that we deem irresponsible," Bowen said.

Gov. Steve Beshear has said he intends to call lawmakers back into special session if they can't agree this time around on pensions. The governor met with legislative leaders about the issue Thursday.

The Democratic-controlled House and the Republican-led Senate are at odds over several provisions aimed at restoring solvency to the pension system, which has a $33 billion unfunded liability. The House wants to generate money for pensions from the state lottery and from horse racing tracks. But the Senate is balking at that proposal.

A proposal passed by the House and now stalled in the Senate calls for the state lottery to add Keno and some new online games to generate revenue for the pensions. It also calls for tax revenue from slot-like devices, called Instant Racing machines, at horse tracks to be designated for pensions.

House Speaker Greg Stumbo said that could net $100 million a year, roughly the amount of additional money Kentucky needs to make its annual pension contribution.

In Kentucky, actual slots are banned, but two horse tracks have installed the Instant Racing machines. Players wager on the outcomes of past horse races, without knowing who won. The machines spawned a legal challenge that is now pending before the Kentucky Supreme Court.

Stumbo said Thursday afternoon there had been no headway on the issue over the past week.

"We're open to doing whatever it takes to address any issues that will avoid a special session," Stumbo said.

The Legislative Research Commission estimates the cost of a special session at $300,000 a week.

Stumbo said House leaders intend to remain in Frankfort during a recess that begins Tuesday so that talks can be held with Senate negotiators on pensions.

"That's actually the prime issue to avoid a special session," he said.