Ky. mayors urge lawmakers to act quickly on pension reform before local services suffer

Lawmakers must increase funding for the public employee pensions and make long-term changes to ensure current city and county services — and their workforces — don’t decline, said Kentucky mayors on Monday.

The mayors of Kentucky’s largest cities underscored the urgency for action at a press conference in Frankfort on Monday, the day before the first day of the 30-day legislative session. Louisville Mayor Greg Fischer said the desire seems to be there among legislators. And Sen. Dan Seum, R-Louisville, who attended the press conference, agreed with that.

But Fischer added that he’s still concerned there’s not enough agreement about how to shore up the Kentucky Retirement Systems, which covers state, city and county workers and the state police. Potential remedies proposed by the Pension Task Force include coming up with an additional $300 million dollars to start making the state’s full required payments into the pension funds.

Fischer said Louisville pension obligations have ballooned and now account for 15 percent of the city’s general fund — up from 6 percent seven years ago. To meet the obligation, the city has laid off employees and searched for creative solutions to become better at providing services.

Fischer said the city still faces a shortage of revenue to provide basic services.

Lexington Mayor Jim Gray said that city’s obligations make up 20 percent of the annual budget. “Our pension costs have spiraled out of control. It is the biggest financial issue our city faces,” Gray said.

Lexington is the only city in Kentucky whose firefighters and police have their own pension fund, but the fund is overseen by the legislature. The General Assembly would have to make changes to how Lexington’s retirement fund is administered.

But pension funding wasn’t the only issue on Fischer’s mind Monday.

At the end of the press conference, Fischer also corralled officials from the Kentucky League of Cities and other mayors into a circle in the conference room to discuss a need for a local option sales tax. Under the local option plan, a mayor could propose a small tax to fund local projects – projects would be voted on through referendum. The earliest citizens could vote on amending the constitution would be in 2014.

That would require amending the constitution, which would mean approval by three-fifths of each legislative chamber and the ratification of voters.