A New Year's resolution for Kentucky and some Ky. politicos to watch in 2013

01/03/2013 08:30 AM

If Kentucky leaders resolve to do one thing in 2013 it should be to get the state’s financial house in order by fixing the public pension systems, said Trey Grayson, the former Kentucky secretary of state who is now director of the Harvard Institute of Politics.

The Kentucky Retirement System, which covers the pensions for retired state and county workers and state police, has seen its funds dwindle as the state shorted its payments into the fund, investments didn’t keep up with expectations and automatic cost of living increases ate away at the funds.

Now, Kentucky must come up with more money each year to make its full payment (as the employer) into those funds.

“It means less for higher education, less for early childhood, less for health care … roads — everything that we like that government provides for us is going to get pinched by this because we’ve been putting this off for so long,” Grayson said (1:00).

Grayson, who keeps up with Kentucky politics, also said he’s most interested to seeing what two lawmakers — one Democrat and one Republican — can manage to get accomplished in 2013. (That part of the discussion starts at 6:15 of the video).

About Ryan Alessi

Ryan Alessi joined cn|2 in May 2010 as senior managing editor and host of Pure Politics. He has covered politics for more than 10 years, including 7 years as a reporter for the Lexington Herald-Leader. Follow Ryan on Twitter @cn2Alessi. Ryan can be reached at 502-792-1135 or ryan.alessi@twcnews.com.

Comments

  • Jim Carroll wrote on January 03, 2013 11:13 AM :

    It’s a foregone conclusion, Ryan, that the defined benefit system should be abandoned for the the future? Why? Responsible states are doing perfectly well in supporting DB plans. We are all familiar with gloom-and-doom studies that claim that states will be “burdened” by huge pension liabilities. But when you dig deeper, those studies make questionable economic assumptions.
    One factor that doesn’t get mentioned is the economic benefit of such plans. Here in Kentucky, the state pension plan contributes $3.5 billion annually to the economy.

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