Some elected officals in N.Ky. are concerned that plan to fix state pension system could have unintended consequences

10/19/2017 10:08 AM

Since Gov. Matt Bevin and Senate and House leadership unveiled their proposed solution to the pension crisis, speculation is taking place around the state whether the plan is a viable solution that will do what it is intended to do.

One fear for many local municipalities is the fact that they will be responsible for significantly more payments into the system, possibly a lot more than they can afford.

While Florence Mayor Diane Whalen applauds Bevin for bringing attention to the issue, she is concerned about the increased financial contributions that cities like hers will be forced to make.

“It’s a big bite to throw at city and county governments in one piece,” Whalen said. “Our costs next year are estimated to go up nearly two million dollars.”

Whalen acknowledges the fact that the ARC would be fully funded each year by the state legislature under the proposal, but she questions how those increased contributions will be funded and how those payments will affect other state projects.

“I mean, are they going to cut projects? Are they going to cut programs? Does the highway budgets suffer?” Whalen asked.

Count Whalen among a number of northern Kentucky mayors who favored allowing the well funded County Employees Retirement System to separate from the Kentucky Retirement System.

“We’re better funded. We may not be perfectly funded and it’s also an issue, but all of the actuary numbers that have been done say it will be funded if we can so that by ourselves by 2035,” Whalen said. “Locally we’re contributing to it. There’s not a nickel of state dollars that goes into it. Let us manage it.”

Rep. Dennis Keene, D-Wilder, has concerns that there’s no solid plan in the proposal for a revenue stream to fund the various pension programs.

“There’s no system for a revenue stream. That’s never talked about,” Keene said. “That’s the 300-pound gorilla in the room, and we going around and around it.”

Keene also believes that the proposal was rushed along without being carefully thought out.

The northern Kentucky representative says that because of that, there could be a lot of negatives despite good intentions.

“My fear is that there will be unintended consequences and cuts to people that don’t need cuts,” Keene said. “I think we need to slow the process down and vet this thing properly through the committee system and I think we can come up with a logical good sound decision on how to get this done.”

Keene doesn’t believe that there are enough Republican votes in the House to pass the proposal.

“These are tough votes for rural legislators because they’ve got to go back home,” Keene said. “When you get in east Kentucky, they’ve lost coal, they’re losing jobs, their education system is their economic development engine, and when you go in there and start saying that you’re going to have to start laying off people, you’re going to have a tough time with (Democrats) and (Republicans) in the rural areas voting for this legislation.”


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