Public Pension Oversight Board co-chair says House votes aren't there to pass pension reform bill

11/02/2017 04:53 PM

FRANKFORT – Public Pension Oversight Board Co-Chair Rep. Brian Linder, R-Dry Ridge, says that there are not enough votes currently in the House to pass the pension reform proposal supported by Gov. Matt Bevin and House and Senate leaders.

Linder, made the comments after a meeting of the board who heard from State Budget Director John Chilton.

“The votes aren’t here for this bill, that’s what I’m hearing,” Linder said. “So, what we’ve got to do is, we’ve got to get to that point, to find out from members of our caucus what are their issues, what can we tweak, what can be changed, and how many votes do we pick up if we do that.”

Chilton warned lawmakers that if nothing is done, the full ARC will be included in the budget for FY 2019 which is $700 million more than in FY 2018.

Chilton estimates that revenue growth will be modest in 2019, which would set up a scenario where the state would need to free up an additional one billion dollars the state would need to raise beginning with FY 2019, by reducing spending, increasing revenue, and reducing the cost of pensions.

“We do have a real crisis,” Chilton said. “The financial obligations that we’re facing are huge. They’re some really tough policy decisions that are going to have to be made in all areas that are in consideration now and the specials session. The next budget is going to be brutal.”

Co-chair Sen. Joe Bowen, R-Owensboro, took issue with some who claimed that some pension funds such as the County Employees Retirement System (CERS), whose members wanted to separate from KERS because they were better funded and not in as dire a situation as KERS, saying that if it’s only 54 percent funded, it’s failing as well.

“If you have a plan which is funded at 54 percent, I would suggest you could look at it this way, if in fact, 2 people were in a plan that was funded at a 54 percent level, and they were having a conversation about pensions, what that actually means is that there would be a pension for one of them, and there wouldn’t be a pension for the other,” Bowen said. “I would suggest the one that wouldn’t get the pension that would be a crisis for them.”

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