Senate President and House Speaker say much work is to be done as special session on tax and pension reform nears later this summer/fall

06/07/2017 05:46 PM

COVINGTON – Both House Speaker Jeff Hoover, R-Jamestown, and Senate President Robert Stivers, R-Manchester, addressed the topic of a special session on tax and pension reform on Wednesday in Covington where they were speaking at a Northern Kentucky Chamber of Commerce luncheon.

Hoover told the audience that he feels that most people don’t realize how serious the pension situation really is.

“I think we all have a duty and responsibility to educate citizens as to just how dire this situation is,” Hoover said. “We’re anywhere from $35 billion to $85 billion unfunded liability in our pension system. It has the real potential to bankrupt this state.”

Stivers said that for the past 20 years that he has been in the General Assembly, the legislature has funded the pension system at the level that have been requested through the budget process to protect the integrity of the pensions, and he said that integrity has not been maintained.

“We did it based on the expertise of the respective boards, and that what was sent to us by both Republican and Democrat governors,” Stivers said.

Many lawmakers have expressed concern that they’re not sure if an effective plan can be put together for a special session this year. Many are concerned over the political ramifications of raising revenue through tax increases.

Most Republican legislators favor a consumption based tax and a lowering of income tax.

Don Weber

Don Weber is a Video Journalist for Spectrum News and covers politics and education on Pure Politics, Kentucky’s only nightly program dedicated to state politics. Don is a lifelong Kentuckian and a graduate of Northern Kentucky University. He spent many years covering sports in the Northern Kentucky area before shifting primarily to politics. You can watch Don’s work weeknights at 7:00 and 11:30 on Pure Politics, available exclusively on Spectrum News, HD Channels 403 and 715. If you have a story idea you can reach Don at donald.weber@charter.com.

4 Comments

Comments

  • Cicero wrote on June 08, 2017 10:14 AM :

    This is the most serious issue impacting our state that most people have never heard of before. We are a rural Illinois when it comes to pension problems and they just got their credit rating downgraded to junk. Think about it, if we don’t reform our state pension plan all we are going to be able to pay for is state employees’ pensions and Medicaid. For years we pretended that the KY pension board could deliver 7%+ growth when even Berkshire Hathaway doesn’t project that on a yearly basis – does anyone really believe they were better stock pickers than Warren Buffet? To get nearly double digit yields you have to put what is supposed to be “ultra safe” pension funds into junk bonds and higher risk assets. What’s amazing to me is the people who seem to be okay with that idea are also the most rabidly opposed to letting individuals use their own Social Security money to invest in the stock market. These previous growth projections were all make-believe and exercises in can kicking to avoid hard conversations with the public and interest groups. Why on earth can’t we just put state employees under 40 on a 401k like the rest of America? Gaming revenue is not going to fix this mess – you have to reform the system.

  • Tom Coe wrote on June 08, 2017 02:19 PM :

    Shame on Stivers. The legislature has, for around 20 years now, not fully-funded the pension system. Year after year they would pay less, much less, than what the acturials determined was needed. His comment about the amount requested through the “budget process” is bull-hockey. Last I checked, the legislature had a small role in the budget process. They took money needed for the pension system and used it elsewhere for other things again, year after year. Every elected rep and senator are aware of this. Hoover and Stivers have been there for all of it – since the pension system was fully funded around 18 years ago. The fault for the pension situation lies fully on those legislative members that have been in office for more than 8 years!

  • Tom Coe wrote on June 08, 2017 02:19 PM :

    Shame on Stivers. The legislature has, for around 20 years now, not fully-funded the pension system. Year after year they would pay less, much less, than what the acturials determined was needed. His comment about the amount requested through the “budget process” is bull-hockey. Last I checked, the legislature had a small role in the budget process. They took money needed for the pension system and used it elsewhere for other things again, year after year. Every elected rep and senator are aware of this. Hoover and Stivers have been there for all of it – since the pension system was fully funded around 18 years ago. The fault for the pension situation lies fully on those legislative members that have been in office for more than 8 years!

  • Charlie wrote on June 09, 2017 11:32 AM :

    Let’s clear the air and admit that every Pension Board Trustee, Governor and Legislator who has served over the last 20 years has some responsibility for the pension mess. Pointing fingers is not going to solve the problem. We must develop our plan for pension solvency going forward. 1st we need transparency in the system. How much money is actually in the pension portfolios, who is managing them and how much are those managers being paid. Then those deals need to be renegotiated to reflect the availability of funds after which the managers need to project out the available pension funds vs the amount required to meet obligations. The legislature must fund the difference. It might mean raising taxes, it might mean current employees making larger contributions, it might mean fewer road and bridge projects, it might mean cuts to education but something has to give. We can argue the merits of defined contributions versus defined benefit plans but the fact is these retirees were given a promise and we must meet that obligation. Now that the pension fund crisis has been exposed means the Governor, Legislators and pension board members can no longer hide the problem or kick the can down the road. The problem will not solve itself, we elected these folks to lead and administer – it is time for them to step up or step down.

What do you have to say?





SUBSCRIBE NOW

Subscribe to email updates.

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

TWEETS ABOUT KY POLITICS