One 'bold' idea? Wealthier pensioners could pay more in taxes, Stumbo suggests
12/04/2012 06:23 PM
House Speaker Greg Stumbo told Pure Politics on Tuesday that one potential “bold” idea to addressing Kentucky’s pension system debt would be to require retirees who receive the most lucrative pensions to pay more in taxes.
It was one suggestion Stumbo used as an example after saying he wasn’t impressed with the results so far of two key government task forces — one dealing with the state’s tax system and the other suggesting reforms to the retirement system.
Stumbo said the guiding principle he’s looking for in any reforms is that those with more means take on a greater share of the burden than middle or low income Kentuckians.
The legislative task force on pensions didn’t include that in its package of suggested reforms on Nov. 20.
Instead, the centerpiece of the group’s recommendations, which were reached by consensus, was to fully fund the state’s payment into the retirement system fund, which would require bumping that payment in 2015 from more than $500 million to more than $800 million. Stumbo said that was hardly a revolutionary suggestion and failed to even hint at where the extra money would come from. Here’s what he said:
Stumbo has not ruled out the possibility of requiring existing state workers to contribute more into the funds under the Kentucky Retirement System, which collectively has $19 billion less than its obligations for current and future pension checks and $14 billion less that what is needed to cover retirees’ health care.
But going down that road would require more legal study, Stumbo’s spokesman Brian Wilkerson told Pure Politics, because workers and retirees say the pension benefits are part of an inviolable contract between them and their employer — the state.
Politically, Stumbo said he didn’t believe his remarks about the pension task force — or the governor’s commission on tax reform that meets again on Thursday — will undermine efforts to get something done on both fronts.
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