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New Kentucky lawmakers watch pension debate from sidelines

Posted: 5:05 PM, Dec 18, 2018
Updated: 2018-12-18 22:05:19Z
Kentucky capitol

FRANKFORT, Ky. (AP) — Travis Brenda, a high school math teacher in Kentucky, was pleased when the state Supreme Court struck down a law that would have made changes to his pension.

Several months earlier, Brenda had ousted the Republican House majority floor leader in a GOP primary and won a seat in the state legislature in November. He is scheduled to take his seat in three weeks when the legislature convenes for the 2019 session. But before he could do that, Republican Gov. Matt Bevin called the old legislature back to Frankfort to pass a pension law again.

Each day they are in session costs taxpayers nearly $66,000.

"That's more than the households in district 71 are making in a year," Brenda said. "We could handle this problem in three weeks."

Brenda is one of 32 newly elected Kentucky House members who are watching from the sidelines as lawmakers debate changes to one of the country's worst funded pension systems. Many have protested, saying Bevin is trying to bypass the will of the voters by not including the new members in the vote. While Republicans still have super majorities in both chambers of the legislature regardless, the 32 new members in the House could have made a difference on a proposal that originally passed 49-46.

"I think they are absolutely trying to push this through before the new crew comes in," said Cherlynn Stevenson, a Democrat who is replacing a Republican that voted for the original pension proposal. "The voters of the 8th district just voted for change and their voices are effectively being silenced."

Bevin says he can't afford to wait for the new legislature. Kentucky has one of the worst-funded public pension systems in the country. The state is at least $38 billion short of the money required to pay retirement benefits over the next 30 years. Two major ratings agencies recently lowered Kentucky's credit rating, with one citing the state's massive pension debt as a factor.

Tuesday, state Budget Director John Chilton sent a letter to every member of the state legislature telling them two credit ratings agencies "have contacted us with questions that could lead to a downgrade of our credit rating due to the Supreme Court decision." A downgrade would mean it would cost Kentucky taxpayers more to borrow money in the future.

That's why Bevin says lawmakers need to pass a pension bill now.

The state Supreme Court struck down the first pension law on procedural grounds. The court did not rule on the substance of the law itself. But Bevin is afraid if lawmakers pass the same pension law again, it will spawn another lawsuit that could keep the state in court for a year.

That's why Bevin's pension proposal removes most of the items that were challenged in the previous bill in an effort to avoid a lawsuit.

"I am confident the Commonwealth would win (in a lawsuit,)" Chilton wrote in the letter to lawmakers. "But the problem with that approach is that the credit markets need certainty now, not a year from now."

But Republican lawmakers are hesitating. Republican Rep. Jerry Miller, chairman of the committee that must vet the pension proposal, said the current members of the GOP caucus are proud of the previous bill, known as Senate bill 151.

"The current (caucus) members, all but four of which were re-elected, campaigned on 151, were proud of 151 and want to defend 151," Miller said. "So we have a difference with the governor from the standpoint of defending our work as opposed to winding up in court."

Not all incoming House members are upset with Bevin's attempt to pass a new pension law. Republican Larry Elkins, who was elected in House district 5, said the special session surprised him, but he's comfortable with what they are doing.

"The people voting on it now were also elected by the people. Their terms end at the end of this year," Elkins said. "If the governor and leadership think this this is the way that we should proceed, it's OK."