The Richmond Register

Local News

March 8, 2013

State lawmakers seek compromise

Employee pension problems

FRANKFORT — By Ronnie Ellis

CNHI News Service

FRANKFORT — After a 90-minute meeting at the Governor’s Mansion Friday morning, Gov. Steve Beshear and the top two legislative leaders said they are committed to working out a compromise on solving Kentucky’s employee pension problems and avoiding a special session.

“I thought we got off to a great start,” Beshear said afterward. “I think everyone is participating in good faith and everybody is sincere in wanting to work through these issues and come to some acceptable conclusion.”

Finding a way to shore up Kentucky’s woefully underfunded employee pension system was everybody’s top priority when the 2013 General Assembly convened in January. But the Republican-controlled Senate and Democratic-controlled House took widely different approaches to a solution.

The Senate passed a bill based on a bi-partisan task force which would move future employees into a hybrid, cash-balance plan, end guaranteed cost of living adjustments and commit the legislature to making the full contribution to the system in future years. But the bill specifies no way to pay for the last piece.

The House rewrote the Senate bill to guarantee defined benefits even for new employees and retain COLAs so long as they are pre-funded. House Democrats also passed a complex funding plan, utilizing projected revenues from the lottery and an assumed expansion of instant racing.

Neither chamber would accept the other’s proposal. So Thursday, Beshear summoned both sides to try to get talks on a compromise going and leaders of both parties in each chamber agreed to Friday’s meeting.

And everyone seemed pleased, at least with the tone and the sincerity of all sides to work something out before the session ends on March 26.

“There was a good dialogue,” said Senate President Robert Stivers, R-Manchester, who said he is optimistic the various parties can work out an agreement on pensions.

House Speaker Greg Stumbo was similarly optimistic, saying the meeting “was a good start” and he remains optimistic a deal on pensions can be worked out over the veto-interim period between Tuesday and March 26.

“It will likely be that we will work through the veto recess — we’ve all committed to do that,” Stumbo said and both Stivers and Beshear later agreed.

“Everybody around that table was there because they want to avoid a special session and committed to work as hard as we could to avoid a special session,” Stumbo said.

Beshear said leaders of both majority and minority parties in both chambers attended the meeting which Stivers said covered in “a broad brush” the issues still to be resolved, including pensions. He said the two sides did not get down to any specifics on their positions.

Instead, they will continue to meet over the next two weeks. Lawmakers will return to Frankfort Monday and meet through Tuesday to determine whether to concur with the other chamber on other issues.

Stivers said he expects the two chambers to name conference committees to work out compromises on differences on issues other than pensions while their leaders work on that one over the veto recess.

He said the Senate has always been committed to funding the annually required contribution to the funding system, but stopped short of agreeing new revenues are needed to do that.

“Are you talking about finding a revenue stream within the current confines of the budget?” Stivers asked rhetorically. “Are you talking about creating a new revenue stream? (Those) are different things.”

But Stivers said everybody Republicans believe they should pass the structural reforms in the system and make sure it’s properly funded.

That might remain a sticking point but one they hope they can overcome.

Beshear said he understands some in the Senate think there are ways to fund the ARC from the current budget, but “I don’t feel that way and I don’t think the house feels that way.”

He said he is open to various suggestions on funding the ARC. And he remains optimistic.

“We may be up and down in that department over the next several days but I’m encouraged by the attitude everybody has,” Beshear said.

He also said he believes House Education Committee Chairman Rep. Carl Rollins, D-Midway, and Senate Education Committee Chairman Sen. Mike Wilson, R-Bowling Green, have worked out an agreement on a bill to raise the high school dropout age to 18 over time.

Beshear said the proposal would allow local school boards to adopt the policy change voluntarily but when 55 percent of school districts had done so, it would then become mandatory for remaining districts. They would be given four years to incrementally adopt the policy.

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.

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