Gov. Bevin says he and others "determined to save" state pension systems

08/24/2017 11:31 AM

Gov. Matt Bevin and legislative leaders “are determined to save our pension system” that is facing “dire straits” financially, the governor said Thursday during remarks at the 54th annual Kentucky Farm Bureau Country Ham Breakfast.

Bevin has said he will call lawmakers back to Frankfort for a special session, and House Speaker Jeff Hoover told reporters before Thursday’s breakfast that he expects that will occur in October, according to the Lexington Herald-Leader.

The governor did not give specifics on what he wants to see in a pension reform package, but he laid out the need to address one of, if not the, worst funded public retirement systems in the country as he spoke to 1,500 gathered at the ham breakfast.

Bevin’s office has estimated the state’s unfunded pension liabilities at $64 billion plus $6 billion in unfunded insurance liabilities while state estimates place the figure at $37 billion. A report by PFM Consulting Group puts the pension shortfall at $33 billion and the insurance shortfall at $6 billion.

“The reality is we do have, as was noted, a pension issue that needs to be addressed,” Bevin said. “It affects everyone in this room. You may not think it affects everyone in this room, but every dollar that does not become available to a school system or a law enforcement opportunity or a road is not made available because it’s having to shore up a sagging pension system.

“We have a system that had it been taken over, had it been a private-sector pension system would have been taken over decades ago, a long time ago. We are in dire straits, but we are determined to save our pension system.”

The Herald-Leader also reported that Hoover, R-Jamestown, has asked members of the state’s House of Representatives, where Republicans hold a 64-36 supermajority, to a closed meeting at the Capitol on Tuesday to talk pension reform.

Senate President Robert Stivers said Thursday that he’s not planning to call the entire Senate, which has a 27-11 GOP supermajority, together to discuss pension reform, but he has allowed the two caucuses to meet at the Capitol with groups involved in the effort and review pension-related reports ahead of a special session.

“I’m not going to bring them in as a whole because I want the two caucuses to be able to sit down, discuss and listen and then have their own internal discussions without wondering what I’m thinking so it’s free and open,” Stivers, R-Manchester, told reporters before the breakfast.

Stivers said it would be “premature” to discuss potential structural changes to retirement benefits for government workers that are under consideration by lawmakers.

House Minority Floor Leader Rocky Adkins, D-Sandy Hook, says he’s in the dark on what pension reform will look like when Bevin calls a special session.

“I think pension reform is a serious issue that all of us are very concerned about and how we’re going to address the unfunded liability moving forward,” Adkins said.

“I think we have to see the bill first, though, and we have to see what parts of pension reform that are going to try to be addressed. I think things like the inviolable contract are important to us, and I think the statute is pretty clear on how the inviolable contract reads.”

Lawmakers won’t be dealing with pension reform while rewriting the state’s tax code in a special session. Stivers said pension changes will drive the biennial budget in next year’s legislative session and, in turn, the “extent” of tax reform in Kentucky.

“There’s some people who say we need additional revenue,” Stivers said. “Some say we don’t. I think we need to create a different tax code to create a more competitive situation in this state and attract more businesses and more jobs and expand the base.”


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