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Kentucky House OKs pension overhaul bill, sends it to Senate

Posted at 4:11 PM, Mar 29, 2018

FRANKFORT, Ky. (AP) — Republican lawmakers in Kentucky have resurrected a bill to overhaul one of the nation's worst-funded pension systems, passing it Thursday evening while overriding the recent protests of thousands of teachers.

The 291-page bill re-emerged suddenly Thursday afternoon in place of a sewage bill that had passed the Senate weeks earlier. It seeks to preserve most benefits for public employees. Retired teachers, who are not eligible for Social Security benefits, would still get a raise of 1.5 percent each year. And it would not change how long current teachers must work before being eligible for full retirement benefits.

Soon after House passage, the state Senate immediately began debating it. Republican Senate President Robert Stivers told reporters the Senate would vote on it later Thursday and it was likely to pass and be sent to GOP Gov. Matt Bevin for his consideration.

"I would assume that we will accept it as is," Stivers said.

Sudden movement on the bill at the state Capitol drew immediate protests as opponents gathered outside Senate chambers, chanting loudly: "We will remember in November!"

The bill came up so quickly that some lawmakers signaled that they didn't know how it would financially impact the system. Republican Rep. John "Bam" Carney said lawmakers expect it to save $300 million over the next 30 years. But Kentucky is at least $41 billion short of the money it needs to pay retirement benefits over that same time.

Still, Carney told lawmakers, "this solution will ensure the solvency of our pension system in years to come."

The GOP-controlled House of Representatives approved the bill Thursday night by a 49-46 vote. Eleven Republicans joined 35 Democrats in opposing the measure.

Democratic Rep. Tom Burch, reflecting the impassioned debate stirring among teachers and public workers, called the bill "garbage" as he slammed it on the table during a hastily called committee meeting Thursday. He called Republicans "a bunch of cowards" for not voting to legalize marijuana and casino gambling, revenues he said could be used to help pay down the pension debt.

Shoring up the pension system has been a priority of Bevin's since taking office in 2015. But his efforts have met with difficulties. His first proposal, unveiled last year, would have closed the pension system and eventually moved everyone into a 401(k)-style plan.

Thousands of teachers and public workers marched recently at the Capitol, and lawmakers balked under the pressure. Frustrated, Bevin was interviewed on conservative talk radio shows calling teachers who opposed his plan "selfish" and "willfully ill-informed." His comments earned rebukes from Republican legislative leaders and galvanized opposition to his plan.

Opponents have threatened lawsuits or even a possible strike if the plan gains final passage.

Nonetheless, as the legislative session began winding down in recent days, it became clear lawmakers would need to pass a pension bill if they had any hope of approving a two-year operating budget. With time running out, Republicans turned to Carney, one of the few teachers in the state legislature, to sponsor the bill and advocate for its passage.

"This directly affects me. And that's why I have chosen to take this stance today to try to help calm our educators and others to say this is necessary to solidify your future pension," Carney said. As he was speaking, someone yelled from the gallery that he was a "scab" and teachers who gathered outside the chamber chanted for Carney to go.

Carlotta Abbot, a retired occupational therapist in the Fayette County School System, said she was most concerned about the bill removing the "inviolable contract" for all new teachers hired into the system, meaning they would have no protection from future benefit changes.

"I have a 19-year-old granddaughter who wants to become an educator, and I cannot in good faith encourage her to become a teacher now," she said.

The House vote came after a lengthy debate in which Democrats questioned the legality of passing a pension bill so quickly without an analysis of how it would affect the system. Republicans, however, touted the bill saying it would help new teachers by guaranteeing they would keep 85 percent of the gains made in their retirement accounts — even if the stock market crashes.

"Think about that. That's insane," Republican Rep. Chad McCoy said. "The very first question I asked is can I move my personal money there? I love that deal."