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Mon January 7, 2013
Lexington And Louisville Mayors Push For Pension Reform
FRANKFORT, Ky. - State and local officials, including Lexington Mayor Jim Gray, came together in Frankfort today to press for action to address rising pension costs.
It’s a problem speakers at Monday’s press conference described as solvable, but fast approaching unsolvable.
"Without real reform, rising pension costs are going to threaten key public investments in things like education, public safety, and infrastructure," says David Draine, a senior researcher with the Pew Center on the States.
Draine, along with a panel of state officials, made the case for adopting some or all of the recommendations made by a state Pension Task Force. They include the elimination of automatic Cost of Living Adjustments and placing new employees in what’s called a hybrid cash balance plan, which would ensure a 4 percent annual return for employees but also have them assume some of the risk for market downturns.
Mayor Gray said Lexington’s pension system currently accounts for 20 percent of the annual budget.
"It's presenting a financial nightmare for Lexington," Gray said.
Among the efforts endorsed by Gray was an option explained by Louisville mayor Greg Fischer during an impromptu meeting of mayors after the conference: a local sales tax option, which would allow citizens to vote on temporary tax increases to fund specific local programs and projects.
"I think it's the right thing to do... 70 percent of the cities in America have this opportunity. Some of them have done extraordinarily successful initiatives and projects as a result," Gray argued.
The officials hope events like Monday’s press conference will put more pressure on the General Assembly to act during this year’s legislative session.