Judge rules Kentucky pension reform bill unconstitutional

Judge rules Kentucky pension reform bill unconstitutional
Judge Phillip Shepherd.
AG Beshear argued that the pension reform law is unconstitutional. (Source: WAVE 3 News)
AG Beshear argued that the pension reform law is unconstitutional. (Source: WAVE 3 News)
Governor Matthew Bevin (Source: WAVE 3 News)
Governor Matthew Bevin (Source: WAVE 3 News)

LOUISVILLE, KY (WAVE) - After a contentious court battle between Governor Matt Bevin and Attorney General Andy Beshear, a judge has ruled that Kentucky's pension reform law, Senate Bill 151, is unconstitutional.

The decision was made in Franklin Circuit Court by Judge Phillip Shepherd on Wednesday.

Earlier this month, Beshear, along with the Kentucky Education Association and the State Lodge of the Fraternal Order of Police, appeared before the same judge and claimed the bill was voided when many lawmakers didn't even get a chance to read it before it was pushed through to passage inside a nearly 300 page sewer bill. Beshear also told the judge the passage equaled a reduction of benefits that violates the teacher contract.

"These public servants have been disrespected. These public servants have been called names," Beshear said, speaking to reporters after the ruling. "And they were betrayed by their government who acted behind closed doors and in the dark of night."

Elizabeth Kuhn, spokesperson for the Governor's office, released this statement to WAVE 3 News:

"Today's ruling from Judge Shepherd was expected in light of his inherent conflict in deciding the validity of SB 151, and an appeal from our legal team is imminent. Judge Shepherd refused to consider whether or not the bill violates the inviolable contract when issuing his ruling, and he invalidated the bill based, in part, on a procedural argument not even raised by AG Beshear.  The consequences of this ruling are tremendous for Kentucky because hundreds, if not thousands, of bills have previously been passed by the General Assembly using the exact same process as Senate Bill 151. If all of these bills are now invalidated based on Judge Shepherd's ruling, our legal system will descend into chaos.  For example, cities and counties will go bankrupt without pension phase-in funding, and programs to combat the drug epidemic will be negatively impacted."

Republican House Speaker Pro Tempore David Osborn had similar comments:

"We are disappointed by today's Franklin Circuit Court ruling on the pension reforms that improve the solvency of public employee pensions. Our attorneys are reviewing the 34-page ruling, and at first blush it appears that this ruling puts in jeopardy decades of enacted revisions to Kentucky statutes that have followed the same process as Senate Bill 151. If this ruling is allowed to stand as a landmark decision, Judge Shepherd may have just voided the inviolable contract itself, much of which was passed into law without three readings on three separate days."

Democrats called the decision a victory for teachers, state employees and transparency.

"I think it's our hope that this will create better government," Beshear said. "An 11-page sewer bill should never turn into a 291 page pension bill and be passed in six hours."

The lawsuit challenging the pension bill was not only filed by Beshear, but also the Kentucky Education Association and the Fraternal Order of Police.

The River City FOP President said they're happy with the judge's ruling, though they are expecting an appeal. Nicolai Jilek said officers have been worried about losing benefits -- with some considering early retirement.

"For now at least I'll let folks know that there won't be any significant changes, for now," he said. "So hopefully those folks -- that you know over time we've built up into these veteran officers with great experience -- hopefully they'll stay and hopefully we'll be able to benefit from them a bit longer."

Jilek admitted changes need to be made to Kentucky's pension system, but he said Senate Bill 151 was not the right solution.

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