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Beshear Vetoes Tax-Credit Scholarship Bill, Teacher Pension Reform

Stephanie Wolf

Gov. Andy Beshear has vetoed two controversial education bills: One would create a $25 million tax-credit program to fund private school tuition; another would add a less-costly tier to the state’s teacher pension program for new hires. 

During a Wednesday press conference, Beshear said the measures “represent a direct attack on public education.”

The most divisive bill is House Bill 536, the tax-credit scholarship measure, which Beshear called “unconstitutional,” saying it diverts tax dollars to private schools.

“This measure would greatly harm public education in Kentucky by taking money away from public schools and sending it to unaccountable, private organizations with little oversight,” Beshear said. 

Many public education advocates worry the program is the beginning of a larger effort to privatize public education in the state. A tax-credit scholarship proposal in 2019 was one of several bills that prompted mass teacher “sick-outs” and demonstrations at the state capitol in Frankfort. This legislative session, the capitol was closed to most visitors because of the coronavirus pandemic.

Public education leaders from across the state joined Beshear Wednesday to condemn the tax-credit program. Kentucky Education Commissioner Jason Glass called the bill a “poorly constructed and half-baked piece of legislation.”

Fayette County Public Schools teacher Jennifer Bolander also spoke out against what she sees as a diversion of tax dollars from public schools. 

“This money is desperately needed in our public schools to pay for things the legislature has not, like funding for full-day kindergarten, fully-funded transportation, textbooks, after-school programs or early childhood education,” said Bolander, speaking on behalf of KY 120 United, the public education advocacy group that led the mass sickouts in 2019.

When adjusted for for inflation, the General Assembly’s per-student allocations for public schools have declined as costs and needs rise among students, shifting the burden onto local school districts. Beshear suggested it borders on a violation of the landmark 1989 Rose v. Council for Better Education decision, which requires the General Assembly to provide adequate funding for public schools.

Vocal critics of the tax-credit bill include leaders of the Kentucky Association of School Superintendents, Kentucky Association of School Administrators, Kentucky Education Association (KEA) and Jefferson County Teachers Association, along with a member of the state’s Student Voice Team.

It’s not clear if supporters will have the votes needed in the House to override Beshear’s veto. The bill passed 48 to 47 but needs a constitutional majority of 51 votes to survive.

Charles Leis, president of the pro-education privatization group EdChoice KY, denounced Beshear’s veto.

“Governor Beshear is wrong to veto House Bill 563. By doing so, he chose to listen to special interests like the KEA over the voice of Kentucky parents who are begging for help. For too long, families in Kentucky who aren’t wealthy have been left with no choice when it comes to education,” he wrote in an emailed statement.

Governor Says Pension Bill Cuts Crucial Benefits

Beshear also vetoed a bill that aims to reduce the financial burden of the teacher pension program by adding a new, less-expensive tier for teachers hired after Jan. 1, 2022. Beshear said the reduction in benefits would make it harder to recruit teachers amid a teacher shortage already troubling the state.

“For new teachers, the most important, most lucrative benefit is being slashed. Yet there is no increase in salary, there is no increase in other benefits,” Beshear said.

For new hires, teachers would have a “hybrid” pension plan with a smaller defined benefit plan, plus a defined contribution plan. Teachers would have to pay in slightly more and work longer to receive their benefits. 

The bill’s sponsor, Republican Rep. Ed Massey, says it will save the state $3.57 billion over the next 30 years. Republicans have been eager to reform the Teacher Retirement System to address a massive unfunded liability, which ballooned after several years of underfunding by the General Assembly.

Many education groups worked with Massey in crafting the bill, including the Jefferson County Teachers Association and KEA.

Beshear also signed a number of education-related bills, including Senate Bill 128, which lets school districts give students a “do-over” year to make up for learning lost during the pandemic. The bill gives districts flexibility in how they design that program, and options could range from repeating a grade to simply offering supplementary instruction. 

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