NKY Chamber applauds General Assembly for work on pension and tax reform

04/05/2018 02:59 PM

FORT MITCHELL – With the Kentucky General Assembly passing bills related to pension and tax reform, as well as the the budget, organizations like the Northern Kentucky Chamber of Commerce see the 2018 session as a successful one.

Before the session started, chamber officials highlighted the importance of dealing with the states pension crisis and tax reform which needed to be addressed for Kentucky to remain competitive from a business standpoint with other states.

Northern Kentucky Chamber of Commerce Vice President of Public Affairs and Communications Kristin Baldwin admits that dealing with the states pension crisis had to be done to stop the growing unfunded liability crisis.

“Pension reform is something that the chamber has been championing for many years now, there’s always been a huge unfunded liability and the chamber’s always said that we have to do something, doing nothing is not an option,” Baldwin said. “They’ve done a lot of what we’ve asked them to do. It’s a tough vote, it’s a tough issue as emotions are very high, but from a business perspective and the chambers perspective, we’re pleased of what came out of that pension reform last week.”

Baldwin admits that the completed pension bill came about as a result of lawmakers listening to many stakeholders including the most vocal stakeholders, the public school teachers.

“Both House and Senate members heard from the education community over and over again, and we saw those changes, again, there was a big change from what was proposed back in the fall to what was passed last week,” Baldwin said. “They listened to them, they made a lot of changes, COLAs was one big issue.”

Baldwin also praised the General Assembly for passing House Bill 362, which allows the CERS pension payment increases for school districts and local government to be phased in over 10 years and caps the hikes at 12 percent per year.

Many school districts and local municipalities admitted that with no phase-in plan, many would not have the funds to make such payments.

Gov. Matt Bevin vetoed HB 362 on Thursday because he was concerned about the “buy-out” provision of the bill which created a way for entities to withdraw from the pension system through “buy-outs” which he said was “very problematic”.

In vetoing the bill, Bevin encouraged the legislature to restore only the phase-in provision during the remaining days of the session.

“That’s going to save a lot on money, not only with our city and county governments, but again, those school boards, all of these different people who have these non-classified employees that are part of the CERS system,” Baldwin said.

Another area Baldwin and the chamber feel good about is additional funding for Northern Kentucky University.

While the university is still stuck with a 6.25 budget cut like all other state universities, other provisions allow NKU to be more competitive financially with the other state universities than ever before with the addition of performance-based funding.

“What the legislature decided to do this year was to put $31 million into that performance-based funding, and then they would go through that formula, and then allocated back to those universities, so they can compete for that equally,” Baldwin said. “NKU, as we have seen, have been graduating in record numbers, they have a great performance rate to go with that, I think they will perform well in that new model.”

One of the surprises of the session was the passing of House Bill 366, the tax modernization plan, which was passed on the final day before the veto break.

Baldwin says that the plan will improve Kentucky’s business climate significantly.

“We quote in our legislative agenda about the Tax Foundation that we’re currently 33rd in the nation in terms of competitiveness,” Baldwin said. The Tax Foundation then came out and analyzed House Bill 366, the tax modernization plan, and said that if adopted and put into law, we would go from 33rd to 18th, that’s all we can ask for the legislature to do. “We want to be able to compete on a level playing field.”

Another item in the budget Baldwin praised was the $196 million over the biennium allocated improve major interstates and other roadways across Boone, Kenton and Campbell counties.

“We’re seeing a lot of money being invested near the airport, we’re going to see a new interstate exchange at 275 and Graves Road, which is a big deal,” Baldwin said. “there’s some money in there for the Brent Spence Bridge for repair, maintenance and painting which is a big deal for us.”

Another piece of legislation passed in 2018 which Baldwin sees as important in improving the business climate in the state is House Bill 2, the worker’s comp reform bill which was sponsored by Rep. Adam Koenig, R-Erlanger.

The legislation, which has already been signed by Gov. Matt Bevin, would prevent workers compensation cases from being reopened more than four years after a claim is made and workers would have to file claims for cumulative trauma, which would be injuries that build up over time, within five years of the most recent injury.

HB 2 would only require employers to pay benefits to workers with “permanent-partial disabilities” for 15 years, after which injured workers would be able to reapply for two-year extensions.

The bill would apply only to future workers compensation claims and would not apply to workers with permanent-total disabilities like amputations, blindness or loss of hearing.

The General Assembly reconvenes for the final 2 days of the session on Friday, April 13 and Saturday, April 14.


Subscribe to email updates.

Subscribe and get the latest political intelligence delivered to your inbox.