Kentucky's Pension Problems
Wed February 27, 2013
Kentucky House Passes Two Pension Bills But Controversy Over Vote Looms
The Kentucky House has narrowly passed two bills dealing with the state's underfunded pension system, but not without controversy.
The House passed an amended version of Senate Bill 2, which keeps the pension systems as a defined benefit and creates a new oversight panel for Kentucky's many pension plans. It passed on party lines 55-45, with Democrats favoring.
It also passed House Bill 416, which takes revenues from the potential expansion and legalization of Instant Racing, from online lottery sales and a new Keno game.
That bill passed with 52 votes, but many Republican members argued that the action was illegal, since revenue bills take a House supermajority of 60 votes to pass in odd-year session.
House Speaker Greg Stumbo disagreed with that notion. He argued that it wasn't the bill's final passage but only the start of the debate.
"Here's the point, if you want to address this session, and not have a special session, the only way to do that is to move a bill that is a revenue bill to the Senate," Stumbo said.
State Rep. Brad Montell, a Shelbyville Republican, also warned his peers not to pass the amended Senate Bill 2. He said the original plan with a hybrid 401K-style plan for new hires took taxpayers off the hook for bad investments.
"So it's very important as we go forward that we can say to our constituents, we're not going to be here 20 or 30 or 40 years from now with the same problems that we have today," Montell said.
The Senate has signaled it does not support either the revenue bill or the changes to Senate Bill 2.
Meanwhile, a Different Bill Deals with Lawmaker Pensions
Senate Bill 7 would keep new legislators from participating in the Kentucky Employees Retirement System. It is aimed at preventing the addition of new burdens to Kentucky's pension system, despite the fact that legislator's pensions are generally well-funded.
Senate President Robert Stivers praised the bipartisan effort in his chamber to solve Kentucky's underfunded pension problem.
"So when people criticize us, members of the senate, Republican or Democrat, that we have done something and not tried to correct it, that's false. That's totally false," said the Manchester Republican.
The bill passed out of the Senate on a 37-0 vote. It now moves to the state House.