The Richmond Register

Local News

March 26, 2013

Pension reform package passes

FRANKFORT — It went down to the wire and a lot of people didn’t like either the final product or the process.

But Kentucky’s General Assembly managed to pass a pension reform package on the final night of the 2013 session.

The last-minute compromise package made some changes in the bill originally passed by the Republican-controlled Senate, but it retained, at least in philosophy, most of the features of the Senate bill.

After July 2014 new state employees will be placed into a half-defined benefit, half-cash balance plan. After Jan. 1, 2014, all new legislators and judges will be placed into the same kind of system. The plan will guarantee a minimum of a 4 percent investment return and none of it will affect existing employees or retirees.

Nor does it affect teachers. But it does apply to classified employees in the school system who are represented by the Kentucky Education Association.

All day Tuesday, lobbyists on both sides of the issue thronged the capitol and rank-and-file lawmakers wondered if there would be a vote and, if there were one, would the measure pass?

No one seemed pleased with the state of things on the final day of the 2013 General Assembly – but then not much had happened by dinner time Tuesday night.

Just as happened Monday, leaders of both chambers shuttled back and forth from their respective chambers to Gov. Steve Beshear’s office. Each time House Speaker Greg Stumbo, D-Prestonsburg, emerged he seemed to be carrying a slightly different plan to fund the annually required contribution to the pension system.

Gone was a 2-cent reduction in the gasoline tax – an idea which House Democrats refused to go along with Monday night. Monday’s plan, including the change in the gas tax in 2014 and some other minor tax changes, was supposed to produce about $110 million.

That’s roughly the amount the General Fund must provide for lawmakers next year to make what is expected to be a $325 million contribution to the pension system. (The rest comes from road fund salaries, federal programs and agency “employers.”)

But no one seemed to like the gas tax idea: local officials said it would cost them money they needed for local roads. Paving and construction companies didn’t like it either.

The latest plan reduces the personal credit on income taxes to $10, allows purchasers of new cars to get credit against sales taxes on the value of their used trade-in (money which would also be lost to the Road Fund); and a number of technical and compliance changes to the tax code.

That bill passed the House 82-17 with 10 Republicans and seven Democrats voting no.

The structural change in the benefit package is not supported by public employees or KEA, which represents classified employees. Both groups, and labor representatives, objected to moving new employees into any type of cash balance and complained bitterly they were locked out of negotiations.

That troubled many House Democrats.

Stumbo said the plan honors the “inviolable contract” with present employees and retirees.

“You honor that contract, ladies and gentlemen,” Stumbo said. “You honor the promise. You ought to feel good about that.”

But Rep. Jim Wayne, D-Louisville, said those current employees worried as well about future employees and the promise made by lawmakers – in his mind – was to past, current and future employees.

He, like others, complained the deal had been cobbled together “behind closed doors without (employee groups’) participation.”

Before the vote, Rep. Johnny Bell, D-Glasgow, objected to having to vote on a bill he hadn’t seen.

“It’s a 228-page bill I’m told,” Bell said. “I’ve not even seen it and I’ve got to go in there and vote on it.”

 But Minority Leader Jeff Hoover, R-Jamestown, said passage of the bill represented “a monumental day in the General Assembly and a monumental day in the commonwealth of Kentucky.”

He said it represented the best of bipartisanship and commended Beshear for his leadership and his efforts to bring the various parties together.

In the end, the bill passed 70-28 in the House after passing earlier in the Senate along with the companion funding bill.

There, Sen. Damon Thayer, R-Georgetown, the structural bill’s original sponsor, said it was necessary “to avert a fiscal crisis that looms in only four years in the future.” He said without action, the pension system would be broke by then and said the plan contained in the bill would save $10 billion over 20 years.

KEA President Sharron Oxendine and Steve Barger, who represents a coalition of state employees, criticized the cash balance plan for new employees and said they were especially unhappy they were locked out of negotiations “which affect thousands of Kentuckians,” according to Oxendine.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

 

1
Text Only
Local News
  • 8-2 Quilt Extravaganza 1.jpg Quilting stitches history, friendships together

    Within the first two hours of the 10th annual Quilt Extravaganza at Berea Community School, more than 200 people had already signed the guestbook.

    Colorful displays of quilt collections lined the school’s gymnasium.

    August 1, 2014 6 Photos

  • 8-2 EKU gift.jpg Dizney gift lets EKU begin $15 stadium addition

    Eastern Kentucky University athletics has received its largest-ever single gift.

    President Michael Benson announced Friday that Donald R. and Irene Dizney, of Ocala, Fla., have committed a lead cash gift toward a $15 million multi-purpose facility to replace the grandstands on the east side of Roy Kidd Stadium.

    August 1, 2014 1 Photo

  • 8-1 St. Mark door.jpg Arabic letter N painted on church door

    Throughout its history the Roman Catholic Church has been associated with Latin language and lettering, so passersby on West Main Street were surprised Thursday to see a strange symbol emblazoned on the church’s door.
    Some were even more surprised to learn it was an Arabic character.

    August 1, 2014 1 Photo

  • Fire damages Southern Hills building

    A building in the Southern Hills shopping center at the corner of Commercial Drive and Gibson Bay Drive was damaged by a Thursday afternoon fire.
    Contractors had been working to update the vacant building but were probably not the cause of the fire that began in the bathroom, Richmond Fire Chief Buzzy Campbell said after the fire was extinguished.

    August 1, 2014

  • 8-1 demo derby 1.jpg Demolition derby at the county fair

    The emcee, firefighters and paramedics race to help the driver of an over-turned car in Wednesday night’s Madison County Fair demolition derby. The driver was unhurt and the vehicle was quickly righted.

    August 1, 2014 3 Photos

  • 8-1 fair pageants 3.jpg Royalty crowned at Madison County Fair

      

    August 1, 2014 3 Photos

  • 8-1 Bees 2.jpg Bee-ing in the know

    Bee lovers were buzzing around Eastern Kentucky University this week for the Eastern Apicultural Society’s 2014 conference.
    Hobbyists, scientists and apiarists traveled from as far as Canada, France and New Zealand, as well as many states, to spend the week exploring numerous aspects of bees.

    July 31, 2014 8 Photos

  • 8-1 Tanya R. Horn.jpg Store employee charged with taking $10,000

    Tanya R. Horn, 33, of Darlene Court, pilfered $10,196 in cash from Posh Tots on Meridian Way over the course of two years, according to a Richmond Police report.

    July 31, 2014 1 Photo

  • 7-30 Candids 1.jpg Madison County Fair paid admissions total 10,000 by Tuesday

    Approximately 10,000 people had purchased tickets to the Madison County Fair by Tuesday evening, Billy Tudor, fair board president said Wednesday morning.
    The count does not include Sunday’s Family Fun Day, which offered free admission, Tudor said.

    July 31, 2014 10 Photos

  • 7-31 Pageant Toddler Girl Winners.jpg Babies, toddlers crowned at Madison County Fair

      

    July 31, 2014 4 Photos