Gov. Matt Bevin and leaders of Kentucky’s legislature are going back and forth over who’s in charge of rallying support for a new pension bill.
Bevin vetoed an earlier version of the legislation, which seeks to provide relief to regional universities and “quasi” state agencies like health departments that are facing a massive increase in pension costs starting next month.
According to the Associated Press, last week Bevin said the “onus” was on lawmakers to muster support for his new proposal, but legislative leaders have maintained that the ball is in Bevin’s court.
Senate budget committee chair Chris McDaniel said Monday that he isn’t sure where the vote total stands, but that it’s up to the governor to build support for his proposal.
“As we’ve made pretty clear, the governor had specific actions he wanted to see taken and so it’s up to his office to get and count the votes,” McDaniel said.
The amount of money that state employers are required to put into the pension system increased from 49 percent of their payrolls to 83 percent last year after the board that manages Kentucky’s main pension fund adopted more pessimistic assumptions for how well their investments would perform and other factors.
But the legislature granted a one-year reprieve from the spike to regional universities and the “quasi” agencies.
That reprieve is set to expire on July 1. Regional universities say they will have to cut programs if the spike goes into effect. Many “quasi” agencies say they would have to cut services or even close.
Lawmakers passed a bill earlier this year that would have allowed the agencies to buy out of the pension system in order to avoid the spike, either by paying a lump sum of their share of the pension debt or through an installment plan.
Bevin vetoed the bill, saying that it wasn’t financially sound and that parts of the bill would have been illegal.
But Bevin has had trouble assembling support for his bill. Some lawmakers are concerned because Bevin’s proposal would encourage employers to freeze pension benefits for their employees and move them into 401k-type retirement plans.
House budget committee chair Steve Rudy said he also wasn’t sure how much support there is for Bevin’s bill.
“He’s the only one that can call a special session,” Rudy said. “I haven’t been involved in a whip count on the House side, I don’t know exactly where we stand on it. I know one thing: if called into extraordinary session, we’ll show up and do our job.”
Some lawmakers and advocates have called for Bevin and lawmakers to freeze the agencies’ pension payment rate for another year and address the issue during next year’s legislative session.
Both McDaniel and Rudy said they wouldn’t support that.
“I don’t support a freeze without a fix at this point,” McDaniel said. “A freeze is just doing the same thing we said we were going to do a year ago.”