The Kentucky Supreme Court on Thursday struck down a law that made changes to one of the country’s worst-funded public pension systems. The state’s Democratic attorney general called it a "landmark win for all our public servants" while the Republican governor warned the ruling would "destroy the financial condition of Kentucky."
In a 7-0 decision, justices found that me manner in which the General Assembly passed pension reform legislation this year violated the state Constitution.
Flanked by leaders of the Kentucky Education Association and state Fraternal Order of Police, Attorney General Andy Beshear quickly assembled a news conference from his Frankfort office. Beshear, who filed the lawsuit challenging the pension law, called the ruling an important win for good government and transparency.
"An 11-page sewer bill can never again be turned into a 291-page pension bill and passed in just six hours without legislators even having the opportunity to read it," stated Beshear. "From this day forward, the legislature has to act in the light of day and never under the cover of night.”
Governor Bevin, who warns the pension plans are on the brink of bankruptcy without reforms, called it a sad day. In a separate news conference, he said the decision by the high court was "an unprecedented power grab by activist judges.”
"This is a poke in the eye, a kick in the teeth, and a stab in the back to our legislature, the men and women who are elected by the people to make the laws of this commonwealth," Bevin remarked.
State lawmakers introduced and passed the pension bill in one day near the end of this year’s legislative session, and without taking public comment. Beshear sued, arguing the legislature violated the state Constitution by not voting on the proposal three times over three separate days. Bevin argued lawmakers didn’t need to do that because they had substituted the bill for an unrelated one that already had the required votes.
The state’s high court sided with the attorney general in a unanimous decision. The ruling could have political consequences. Bevin is up for re-election next year, and Beshear is one of the Democratic candidates vying to replace him. The GOP governor on Thursday called Beshear’s lawsuit self-serving and political.
“This problem still exists. It’s now worse than it was a few hours ago," commented Bevin. "It’s no cause for celebration. It may, in someone’s estimation, help them politically, but it’s screwing Kentucky. If you want to build your political career based on sticking it to Kentucky, giddy up! But that’s a sad, pathetic way to go about the political process.”
Attorney General Andy Beshear, the son of former Governor Steve Beshear, rejected the notion that his lawsuit was political.
“Everyone seems to view our world right now as right versus left, but this is right versus wrong," he said. "We have hundreds of thousands of state employees who come from all political parties and they dedicate their life to public service. They live up to their side of the bargain, and this legislature and the governor tried to break the state side of that bargain. At the end of the day, this is just right versus wrong and I’m glad the side of right won.”
The controversial pension legislation moved all new teacher hires into a hybrid plan, similar to a 401-k. The law also restricted how teachers used sick days to calculate their retirement benefits. Teachers responded by shutting down schools across the state and travelling to the State Capitol by busloads to protest. Educator Kim Coomer responded to the ruling from her classroom at the Warren County Area Technology Center.
“I think it’s a great day for public servants, and hopefully, this sent a messages to legislators loud and clear that you cannot do backdoor deals and do things in the dark because eventually they’re all going to come to light," Coomer told WKU Public Radio.
Coomer is president of the Warren County Education Association. With more than two decades in the classroom, Coomer wants her retirement benefits untouched, knowing how little her paycheck is and how she and other teachers aren’t eligible for social security benefits. She’s also concerned about reduced benefits affecting Kentucky’s ability to attract and retain the best educators.
The retirement systems for teachers and other public sector workers went under-funded for decades, coupled with poor investments and returns. The state is now at least $38 billion short of the money it needs to pay future benefits. Governor Bevin says the plans can’t return to solvency without structural changes, but as lawmakers go back to the drawing board next month when the 2019 session begins, Coomer thinks the solution is new sources of revenue.
“They need to continue to fully fund like they did this last session, our pensions," she stated. "I’m not exactly sure where they’re going to find it, but we’re going to have to put our heads together and come up with some things.”
It's unclear how the legislature will respond when the session opens in early January. They could try to pass the bill again without using the legislative maneuver the court ruled unconstitutional. Coomer says she and fellow teachers are ready to organize again.
“They’ll be a strong presence in Frankfort again. Even though it’s not a budget session, we’ll be watching what they’re doing, the legislation," Coomer said. "The teachers are alert. They woke a sleeping lion.”