Lawmakers "still talking" about bonds for Ky. Teachers' Retirement System
03/20/2015 07:14 PM
FRANKFORT — When lawmakers adjourned negotiations on a proposal to pump $3.3 billion in bonds into the Kentucky Teachers’ Retirement System on Friday evening they said progress was made on the negotiations, but no agreement had yet been reached.
The House and Senate start off far apart in their approach to the Kentucky Teachers’ Retirement System, which faces nearly $14 billion in unfunded liabilities. Senate Republicans prefer to study the system in the interim and come back to the table next year with a resolution.
House Democrats passed a $3.3 billion bond — the single largest bonding measure in state history.
Lawmakers started their talks Friday morning. Taking several breaks and eventually meeting behind closed doors, lawmakers emerged with what they’re calling some progress.
“I think we’ve had a very good discussion — a very candid discussion,” Senate President Robert Stivers, R-Manchester, told reporters after the talks concluded.
“Moving the football down the field,” he said, saying lawmakers had a collegial discussion.
House Speaker Greg Stumbo, D-Prestonsburg, told reporters there had been some movement between the sides for an influx of cash into the system.
“There’s been recognition that there needs to be an influx of new monies to stabilize the system,” he said.
Stumbo told reporters after the meeting that he offered to split the bond to $1.9 billion and include the study requested by the Senate in the interim. The idea being that lawmakers could come back with the study next session, institute reforms and perhaps another bond in 2016.
Stivers wasn’t willing to go as far in his remarks but did say that “we’re not ruling anything out.”
State Auditor Adam Edelen and his staff spent a year poring over financial statements at the KTRS and found the problems facing the pension system are rooted in money, not mismanagement.
New federal accounting standards will force KTRS to report a 45.6 percent funding ratio next fiscal year — an erosion from the previous fiscal year, when KTRS calculated its funded status at about 52 percent.
For now “everyone is still talking,” Stumbo said, and sometimes all it takes is for the conversation to continue to reach an agreement.
Lawmakers are expected to meet in conference committee again on the issue Monday morning. The General Assembly is set to adjourn sine die on Tuesday.
Pure Politics reporter Don Weber contributed to this report.
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