LOUISVILLE, KY (WAVE) - The President of the Kentucky State Senate stated this week that he agrees with statements made by the Fitch Ratings agency that Kentucky’s pension crisis might not crater the state’s credit rating, as Governor Bevin feared, following a Kentucky Supreme Court decision to strike down a pension bill it considered to be passed unconstitutionally during the 2019 legislative session.
When asked about his thoughts on the one of the country’s “Big Three” credit agencies saying proposed changes so far wouldn’t affect Kentucky’s rating, President Robert Stivers said that he agreed.
The ratings agency said the proposed pension changes aren't the most critical factor in grading the state's credit.
The governor justified December's special session by claiming a failure to act would trigger a credit downgrade for the state’s bond ratings.
The Fitch report said the pension bill would only save Kentucky 300 million dollars over the next 30 years, which is less than one percent of the state’s pension liability.
In December, Moody’s called legal challenges to that bill a “credit negative”, but did not lower the state’s rating.
Stivers said he agrees with what Fitch said, and echoed the previous comments from Moody’s.
“This is something that has to move in increments," Stivers said. "One of the increments funding is a part of it. A new plan is a part of it. Things like that have to be taken into conjunction with each other.”
No major pension legislation was brought to the floor during the first part of the 2019 regular session of the Kentucky legislature.
Lawmakers on both sides of the aisle noted Friday that a fix to the pension crisis might not even come this session. They also floated the possibility of using a special session to tackle the issue this year.
It was announced Friday that a bipartisan working group has been developed to come up with a solution by an initial deadline of Mid-February.