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Kentucky lawmakers convene for session on pensions

Kentucky capitol
Posted at 10:33 AM, Jul 19, 2019
and last updated 2019-07-19 16:15:32-04

FRANKFORT, Ky. (AP) — For the second time in seven months, Kentucky’s Republican governor called lawmakers back into a special session Friday to deal with the state’s pension problems.

The GOP-dominated legislature convened to consider Gov. Matt Bevin’s pension-relief plan for regional universities and quasi-governmental entities, which include public health departments, community mental health centers and domestic violence shelters. The schools and agencies were hit by sharply higher retirement costs starting this month.

A Republican-sponsored bill reflecting Bevin’s plan was introduced in the House, as were two alternatives offered by Democratic lawmakers. All three bills were assigned to a committee scheduled to meet Saturday. It will be the first test of strength for Bevin’s plan.

House Speaker David Osborne said he’s confident that pension-relief legislation will pass during the midsummer session, which is expected to stretch into the middle of next week. It takes at least five days to get a bill through the legislature. Special sessions cost taxpayers about $66,000 per day from when the sessions begin to the day lawmakers adjourn.

In his proclamation calling lawmakers back into session, the governor limited the agenda to pension-relief legislation. In December, Bevin called a special session to pass a more comprehensive pension law, but lawmakers went home without taking action.

This time, Bevin spent weeks building support for his pension proposal, which would replace a measure he vetoed in April after lawmakers had ended their regular session. The governor has touted his proposal as “the only fiscally responsible plan” to put the regional universities and quasi-public agencies on a path toward “a sustainable future.”

Without pension relief, state leaders worry that some quasi-public agencies would be strained to the point of bankruptcy, causing people to lose their jobs or critical services.

House Minority Floor Leader Rocky Adkins said Democrats offered a “sound” solution and called on Republican legislative leaders to consider their suggestions in crafting a bill. He praised GOP leaders for referring the Democratic bills to committee along with the GOP-sponsored one. Republicans hold commanding majorities in the House and Senate.

“I believe this is not a Democrat or Republican issue,” Adkins told reporters. “I think this is a real-people issue that needs to be worked on ... in a bipartisan way.”

Adkins raised concerns that the governor’s proclamation calling lawmakers into session was so narrowly written that it could prevent consideration of alternatives to Bevin’s proposal. He urged Republicans to resist that in order to preserve legislative independence.

Asked about the Democratic bills, Osborne said: “Certainly we’re open to all thoughts and ideas.” He added that Bevin’s proclamation “is going to limit us, to some degree.”

The governor’s proposal would allow the agencies to stay with the Kentucky Retirement Systems at full cost; leave the retirement system by paying a lump sum equal to future projected benefits payments; or buy their way out in installment payments over decades. It extends a freeze on pension costs for another year for the regional universities and quasi-public agencies.

His plan pushes back the deadline for agencies to decide until next spring, after the 2020 legislative session concludes. That would give lawmakers time to make any necessary changes.

Democrats propose freezing retirement payments paid by the agencies and redirecting tens of millions in retiree health insurance payments to pension liabilities for five years. The plan has drawn sharp criticism from Bevin.

The first day’s proceedings in the House took a partisan turn when Adkins criticized Bevin for his proclamation calling lawmakers into session.

“There’s no question the way the governor has written this call, he’s trying to restrict the debate, the bills, the ideas that could come forward,” Adkins said later.

House Speaker Pro Tem David Meade responded that former Democratic Gov. Steve Beshear included bill language in his official notice calling lawmakers into a special session. Adkins was a sponsor of the measure, Meade noted.

Adkins said the two situations were completely different. During Beshear’s tenure, he said, there was bipartisan support for the measure backed by the governor.