Still no Kentucky pension bill in sight

By RONNIE ELLIS
CNHI/Raycom Kentucky

FRANKFORT, KY (CNHI) - The plan was for the Kentucky General Assembly to have pension reform passed and out of the way long before now.

Instead, we're 12 days into the 2018 session and no bill has yet seen the light of the day.

Last Tuesday, Governor Matt Bevin revealed his budget proposals to the legislature, a budget that calls for spending $3.3 billion over the next two years in order to shore up Kentucky's badly underfunded public pension systems.

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That budget also calls for cuts throughout most of state government, including in education from kindergarten through college, to pay for those larger pension contributions.

Bevin, Senate President Robert Stivers, R-Manchester, and then House Speaker Jeff Hoover, R-Jamestown, unveiled a draft pension bill in October, but the reaction opposing some cutback of benefits was swift and loud.

House Republicans began working on changes to the bill, but they were sidetracked by a sexual harassment scandal which brought about Hoover's resignation as Speaker and divided House Republicans -- both among themselves and for some with Bevin.

That scuttled a planned end of the year special session to enact pension reform so it wouldn't bog down the regular session which must address a new budget.

Friday, no bill had been filed, and Speaker Pro Tem David Osborne, R-Prospect, who has taken over operation of the House from Hoover, said he doesn't know when a bill will be filed.

Osborne said House Republican leaders "have met with the Senate and had several conversations about different scenarios. We've requested some new information from the (pension) systems and we hope that will be back in a couple of days."

There's a growing sense that as the Republican House leaders have weakened or removed some of the provisions in the original October draft bill which angered teachers, state workers and retirees, they've also reduced the cost savings which those provisions offered.

Earlier this week, Osborne declined to speculate on savings from any proposed changes, but he said Wednesday rumors the latest version offers no savings "are inaccurate."

Minority Leader Rocky Adkins, D-Sandy Hook, thinks Republicans are in too much of a rush to reform a system which was "reformed" in 2008 and again in 2013 and which hasn't been given sufficient time to work.

Adkins commended Bevin for budgeting the full contributions (called the ARC or actuarially required contributions) to pensions in his budget proposal, but the Democrat says there seems little advantage to moving new hires to 401(k) type plans rather than defined benefit or the cash-hybrid plans now employed.

He points to other states which switched to such defined contribution plans but failed to see much savings, prompting a couple of states to reverse course.

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"I think if we fully fund the ARC, and if we continue the reforms of 2008 and 2013, those reforms will pay off," Adkins said. "My recommendation is that we fully fund the ARC but stick to what we've got."

While Osborne remains committed to passing a pension bill, he's also on board with Bevin and Adkins about fully funding the cost of the pension systems. He also is keenly aware of the need to find that money elsewhere in the budget because he doesn't think it's likely lawmakers can successfully address pension reform, a new state budget, and tax reform in one session.

"The cuts are severe, and they're difficult," Osborne said. "We're trying to manage those as thoughtfully as we can. But not funding the pension system is just not an option."

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow him on Twitter @cnhifrankfort.

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