Legislative limbo: Gas tax, teachers’ pensions among issues still hanging as veto recess begins

03/12/2015 08:55 PM

FRANKFORT — Lawmakers advanced a number of bills to Gov. Steve Beshear’s desk before adjourning for the veto recess on Wednesday, but a number of high-profile measures remained unresolved after midnight struck.

Addressing the Kentucky’s heroin epidemic remains chief among legislators’ priorities, yet others have had their share of the limelight this session. Lawmakers have tussled over bills on bonding for the Kentucky Teachers’ Retirement System and whether the General Assembly should freeze the floor on the wholesale price of motor fuel ahead of an expected 5.1-cent drop in the gas tax April 1.

Winter weather also stalled the General Assembly and delayed votes on bills like House Bill 8, a compromise between the chambers on protective orders for dating partners.

As Beshear ponders uncapping his veto pen, here’s a look at what will greet legislators once the session resumes March 23:

KTRS funding

House Speaker Greg Stumbo’s proposal in House Bill 4 to pump $3.3 billion in bonds into KTRS as a means to shore up its funded status and give the state time to develop a long-term financing plan met a cool reception once it reached the Senate, which instead offered to study the agency during the interim in a process similar to one prior to reforms for the Kentucky Retirement Systems in 2013.

Stumbo and KTRS officials face the challenge of convincing senators to OK the bond sales despite the Senate’s resolve to examine the system before enacting any funding or reforms.

Beau Barnes, KTRS’s deputy executive secretary and general counsel, said studying the system will only reveal the need for additional funding.

The bond sales would increase the pension system’s funded ratio from 51.9 percent to 72.4 percent by 2035, Barnes has said in his testimony for the bond sale.

They would also prevent hefty employer contribution requests in the near future. Barnes said in drafting its budget request, KTRS has estimated its actuarially required contributions will increase by $510 million in fiscal year 2017 and $470 million in 2018.

“These numbers are getting bigger, and when the governor and his budget staff are looking at the General Fund revenues nine months from now, I just can’t see them finding those size dollars coming from the General Fund,” he said in a phone interview. “So there’s a question it would seem: Do we just not fund it again or do we issue a bond?”

Stumbo, calling himself “an eternal optimist,” said he hopes the General Assembly will take on KTRS’s funding woes before adjourning sine die March 24.

“It needs to be addressed now,” Stumbo, D-Prestonsburg, told reporters Wednesday. “The window of opportunity to issue bonds and to shore up that system is going to grow narrower and narrower, and action needs to be taken in my judgement.”

Gas tax

The General Assembly may act on the state’s shrinking gas tax this session, but legislative leaders were noncommittal about such a proposal’s prospects late Wednesday.

“I will give you a good estimation on heroin and the dating violence bill, but I would not in any way want to give odds on the gas tax,” Senate President Robert Stivers told reporters.

Stumbo reiterated that he expects the Senate to act first on the issue, if at all, after the House passed their unsuccessful proposal to shore up the Road Fund by raising the tax’s floor last year.

The Road Fund faces a stiff hit come April 1, when the gas tax will drop 5.1 cents per gallon and create a $250.4 million hole in the current two-year budget.

And the longer the tax rate flirts with its statutory floor, the harder its climb to past levels. Chuck Wolfe, spokesman for the Transportation Cabinet, said if the April 1 rate of 21.1 cents per gallon remains in place for a year, the tax rate will need to hit its 10 percent annual growth limit early for six consecutive years to reach its high-water mark of 31.1 cents per gallon, set July 1, 2014.

Sen. Ernie Harris, R-Prospect, has floated a proposal freezing the floor on wholesale gas prices, on which the gas tax is set, at its current rate.

The Senate has kept House leaders abreast of possible proposals, Stumbo said, and Beshear is helping craft a compromise.“He’s sort of keeping us appraised,” he said of the governor.

“It appears from all the projections that it will continue to drop, and that means that local governments who’ve been stressed during this bad winter will be stressed even further with the lack of adequate funding to repair and replace their roads,” he said.

Dating violence

House Bill 8, which would create civil protective orders for dating partners, appeared to hit a snag when it didn’t earn final passage Wednesday, but Stivers said the bill was a victim of snow delays and other pieces of legislation taking precedence before the veto recess.

He said the bill will get a vote when the legislature reconvenes March 23, noting a number of measures had to be sent to the House for action by midnight Wednesday.

“We’ve done that by 10 minutes,” said Stivers, R-Manchester.

Advocates for the bill don’t expect it to die at the 11th hour.

Sen. Whitney Westerfield, who moved HB 8 through the Senate Judiciary Committee, said he was “disappointed it didn’t already happen, but I’m not worried about it.”

“There’s plenty of support for it, and I’ve heard no indication that there’s any lack of support or if there’s any issue with the bill,” said Westerfield, R-Hopkinsville.

Pure Politics reporter Don Weber contributed to this report.


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