The Richmond Register

Local News

February 7, 2013

Senate passes bill to rein in pension costs

FRANKFORT — The day after Gov. Steve Beshear told a joint session of the Kentucky General Assembly he won’t support pension reform without reforming the tax code to provide more money for education, the Republican-controlled Senate passed a bill to try to rein in pension costs.

The bill, sponsored by majority leader Damon Thayer, R-Georgetown, would end cost-of-living increases for pensioners, move new hires into a hybrid, cash-balance plan; and declares the legislature’s “intent” to fully fund annually required contributions to the funds.

Kentucky maintains multiple pension plans — for state and county employees, for teachers, and for Kentucky State Police. Additionally, some quasi-government agency employees are allowed to participate. In total, the plans face a $30 billion unfunded liability.

Thayer’s bill and its provisions are based on the recommendations of a bi-partisan Senate and House task force that studied the issue and recommended the changes. It addresses the Kentucky Employees Retirement System (KERS) that has an $18 billion unfunded liability but does not affect the teachers’ plan.

Several factors over a couple of decades led to the problem. In flush times during the 1990s, lawmakers enriched retiree benefits and then, in tight times, lawmakers deferred making the annual payments in order to fund other services.

In that time, the plans also suffered investment losses during two recessions as well.

That makes the recommendation to begin fully funding the system beginning with next year’s budget critical. Next year’s cost is estimated to be about $327 million, although not all of that will have to come from the General Fund. Some funds will be paid from the road fund and federal funds for employees paid by those sources.

But the Democratic-controlled House and Speaker Greg Stumbo, D-Prestonsburg, are hesitant to approve the changes without a predetermined plan to fund the ARC.

And Beshear wants lawmakers to pass some form of tax reform to generate more revenues before taking on pension reform. So even though the measure passed the Senate 33-5 with four Democrats and one Republican voting no, it faces an uncertain future in the House.

Those were reasons given for “no” votes by Sen. Tom Buford, R-Nicholasville, and two of the Democrats, Walter Blevins, Morehead, and Robin Webb of Grayson.

“You’ve got to show how you’re going to pay for this,” Buford said on the floor. “You’ve got to show a little backbone.”

Buford reminded his colleagues that Beshear, on Wednesday night during the annual State of the Commonwealth Speech, wants pension reform and tax reform to be linked. The governor also vowed not to allow education to go further underfunded to pay for a pension fix.

“We should do the funding at the same time to show the will to do it,” Blevins said after the vote.

Webb recalled for colleagues that she was once a $16,000 a year attorney for the state and that employees “work hard and they’ve earned their benefits.” She conceded her vote was largely “a symbolic one.”

Even supporters of the measure expressed reservations about not coming up with the money.

“We’re not directly dealing with the underfunded portion of our system for us to truly succeed at this task before us,” minority leader R.J. Palmer, D-Winchester, said during a floor speech, although he voted for the bill. “But it’s a very positive first step, and it’s worthy of our support today.”

Thayer said he and some Republicans wanted to go farther — moving new hires into a 401-K style plan — but he said “politics is the art of the possible, and it is possible for the General Assembly to pass this bill.”

He said lawmakers have put off action on the problem for too long already and pointed out the plan does not change benefits for current employees or retirees.

“We must do something and act now,” Thayer said. Otherwise the state faces “fiscal calamity.”

Jim Carroll, spokesperson for a state employee retiree group, said the group is “bitterly disappointed” the Senate passed the bill.

He said the bill’s call for implementation of the cash-balance plan by July 1 is impractical and the bill “utterly fails to address the massive unfunded liability.”

Carroll endorsed Stumbo’s idea of a dedicated funding source.

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
  • 2-11 Mangan.jpeg Man indicted in I-75 wreck that killed two

    A man who police believe started the chain of events that led to the deaths of two people on Interstate 75 in February was indicted on several felony charges Wednesday in Madison Circuit Court.
    Bryan M. Mangan, 56, of South Bend, Ind., was indicted on six counts of first-degree wanton endangerment, tampering with physical evidence and operating on a suspended license.

    April 24, 2014 2 Photos

  • Man charged with reselling employer’s equipment

    A man who worked for a local satellite TV company has been charged with ordering extra equipment and selling it online.
    Charles William Hensley, 39, of Manchester, worked for the Multiband Corporation at its Richmond office, according to a Richmond police report.
    Multiband maintains DIRECTV’s installations, service and upgrades for single-family homes in 20 states and commercial sites nationwide.

    April 24, 2014

  • Saturday is National Drug Take-Back Day

    A nationwide initiative to dispose of prescription drugs in a safe manner will take place Saturday.
    Three Madison County sites are available for residents to get rid of their unused, unneeded or expired prescription drugs as part of the eighth annual National Prescription Drug Take-Back Day:
    • Richmond Police Department, 1721 Lexington Road, box is outside by the front door.
    • Kentucky State Police Post 7, 699 Eastern Bypass, across from the EKU stadium, box is inside at the front door.

    April 24, 2014

  • 4-25 Revue 1.JPG Retro Radio Revue

    “Stan O’Donnell’s Retro Radio Revue,” presented by Rose Barn Theatre, will be performed at 7:30 p.m. Friday and Saturday at Gillum’s Sports Lounge in the Richmond Mall.
    The production focuses on the performers of the show and the follies and chaos that take place as the unexpected ensues. Local musical performers from Madison County will be showcased throughout the production.
    Gillum’s will provide a full menu service and cash bar beginning at 5:30 p.m.
    Tickets for the show are $15 and available at the door or in advance at www.rosebarntheatre.org.
    The event is a fundraiser for the nonprofit arts organization.

    April 24, 2014 3 Photos

  • 4-25 Crit Luallen.jpg Luallen says no to 2015 governor’s race

    After months of deliberation, former state Auditor of Public Accounts Crit Luallen announced Thursday she will sit out the 2015 race for governor.
    The announcement disappointed friends and associates who see Luallen as an able and experienced administrator — she served in six gubernatorial administrations — but also someone with the character and integrity to restore confidence in government.

    April 24, 2014 1 Photo

  • Blue Grass Army Depot sponsors 5K

    The Blue Grass Army Depot is hosting a 5K run/walk Saturday in support of National Sexual Assault Awareness Month.
    The no-entry-fee event will begin and end at the depot’s new sports complex ball fields, according to a news release from the installation. Preregistration is available online at www.bluegrass.army.mil or starting at 9 a.m. the day of the event.

    April 24, 2014

  • 4-24 UKatWaco1.jpg Wildcats encourage Cardinals to work hard in school

    University of Kentucky student athletes Kastine Evans, a guard on the women’s basketball team, and Jon Hood, a guard on the men’s team, stopped by Waco Elementary School on Wednesday to talk about the benefits of working hard in school.

    April 23, 2014 4 Photos

  • Mayor, commissioner pay changed

    The Richmond City Commission approved 4-1 a new pay scale for the mayor and commissioners at a special-called meeting Wednesday morning.

    April 23, 2014

  • 4-24 Lorenzo McWilliams.jpg Harrodsburg to get old Richmond police mobile computers

    Richmond is donating to the city of Harrodsburg eight of 39 old computers formerly used in police cruisers.

    April 23, 2014 1 Photo

  • 4-24 HOSAblooddrive.jpg Health science students organize blood drive

    Aside from the gift cards and free snacks, 50 Madison County high school students have other reasons for donating 35 pints of blood Wednesday to the Kentucky Blood Center at Madison Central High School.

    April 23, 2014 1 Photo

AP Video
Raw: Obama Tours Gyeongbok Palace Swimmer Michael Phelps Back in Competition Raw: Obama Lays Korean War Memorial Wreath Obama Leads Naturalization Ceremony in Seoul Calif. School Bus Crash Hurts Driver, 11 Kids Country Club for Exotic Cars Little Science Behind 'Pollen Vortex' Prediction US Proposes Pay-for-priority Internet Standards Wife Mourns Chicago Doctor Killed in Afghanistan FDA Proposes Regulations on E-cigarettes Kerry Warns Russia of Expensive New Sanctions Mideast Peace Talks Stall on Hamas Deal Cody Walker Remembers His Late Brother Paul Grieving South Korea Puts Up Yellow Ribbons Raw: Kerry Brings His Dog to Work Raw: Girls Survive Car Crash Into Their Bedroom Three U.S. Doctors Killed by Afghan Security Yankees' Pineda Suspended 10 Games for Pine Tar Colleagues Mourn Death of Doctors in Afghanistan Ukraine Launches Operation Against Insurgents
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Poll

Should Richmond rezone the southwest corner of Main Street and Tates Creek Avenue to B-1 (Neighborhood Business) with restrictions to allow construction of a financial services office?

Yes
No
     View Results