The Richmond Register

Local News

February 26, 2013

Bi-partisan approach to pension reform may unravel

FRANKFORT — FRANKFORT – What began all dressed up as a bi-partisan approach to “the number-one issue facing the state” appears to be unraveling, perhaps pointing toward a special session on pension and tax reform.

Tuesday the Democratic-

controlled House “gutted” a bill passed by the Republican Senate based on a bi-partisan task force’s recommendations to reform the state’s badly underfunded employee pension fund and.

Senate Bill 2, sponsored by Sen. Damon Thayer, R-Georgetown, would move new employees into a hybrid, cash-balance plan and end cost-of-living adjustments while preserving current benefits for existing employees and retirees.

But the key provision of the bill is to fully fund the annually required contribution (ARC), and the Senate bill provides no way to pay for what is expected to be about $327 million in extra costs next year – with between $100 million to $120 million coming from the general fund. (Most of the remainder is paid through federal programs, local governments and other agencies whose employees are in the pension system and from the road fund for highway employees.)

The plan is also criticized by employee groups for changing the benefit structure for future employees, and some critics say it will cost more in the short term than the current system.

Tuesday, the House State Government Committee essentially re-wrote the bill.

A last-minute committee substitute by committee Chairman Brent Yonts, D-Greenville, would preserve defined benefits for all employees, current and future; preserve COLAs so long as they are pre-funded; try to bind future legislatures into having to make the ARC payment; and allow the legislature to amend benefits going forward for employees hired after July 1, 2013.

Any future changes would not affect benefits already accrued, Yonts said.

The reaction from Thayer and Senate President Robert Stivers, R-Manchester, was as swift as it was predictable.

“They have gutted the bill,” said Thayer.

“In four to five years, they’re desirous of going on a pay-as-you-go basis,” Stivers said. “In four years, (the system) will be insolvent,” Thayer chimed in.

And that was before the House budget committee heard a proposal from House Speaker Greg Stumbo, D-Prestonsburg, to increase lottery games and utilize a greater take from instant racing games to fund the ARC.

Just as happened in the state government committee earlier Tuesday, budget committee members got the committee substitute only when the committee convened. And just as occurred earlier in the day, the funding mechanism passed on a straight party-line vote, with Democrats voting yes and Republicans passing.

They said they passed because they’d not had time to read or analyze the two proposals.

Between the two committee meetings, House Minority Leader Jeff Hoover, R-Jamestown, complained on the House floor that it was unfair to lawmakers and to the public to have to vote on Yonts’ 53-page bill lawmakers hadn’t been given time to read.

He implored House Democratic leadership to provide bills in advance.

When Stumbo presented his funding plan an hour or so later, he jokingly apologized for the late committee substitute, but that didn’t appease the Republicans on the committee.

Stumbo’s plan would direct the Lottery Corporation to expand its offerings, perhaps including internet lotteries and KENO – a rapid-fire game on machines – and combine those extra revenues with a greater state take from instant racing games.

Lottery proceeds above current levels plus a two-percent a year growth would go to a “Pension Sustainability Trust Fund.” Lottery revenues currently finance KEES and needs-based college scholarship funds, growing at about 2 percent a year, Stumbo said.

That amount will be preserved for the scholarship funds, but anything above that would go to pensions.

Instant racing currently is offered at two of the state’s thoroughbred race tracks. It has been approved by the Racing Commission and upheld by Franklin Circuit Court but has been appealed by gambling opponents to the Kentucky Supreme Court which has not yet ruled on the question.

Stumbo said he believes the law will be upheld, and if instant racing is expanded to the other tracks, the two sources of revenue – lottery and instant racing – will produce about $105.5 in state revenues by the end of 2016 and as much as $183.7 by 2022. He said his estimates are more conservative than estimates by the racing industry.

The plan prompted numerous questions – and not just from Republicans. Bluegrass area lawmakers questioned its impact on the racing industry while others asked about its impact on KEES. Republicans questioned the reliability of the figures.

But Stumbo said every dollar gained by the state meant at least one dollar less from the general fund which must go to pensions.

He also said his proposal is only a first step.

But Stivers and Thayer didn’t seem interested in negotiating a compromise. So the question may become, will anything be any different in a special session.

Some lawmakers contend Gov. Steve Beshear wants to special session and to tie pension reform to tax reform which will produce more revenue. Stivers and Thayer have consistently said they state should not raise taxes.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at Follow CNHI News Service stories on Twitter at

Text Only
Local News
  • May 30 last school day for students

    After 16 snows days and two weather delays this winter, the Madison County School Board decided Thursday to end the school year on Friday, May 30.

    April 19, 2014

  • 4-19 TechExtra1.jpg Students showcase projects in Technology Extravaganza

    Madison County School students showed off just how tech savvy they can be during the district’s sixth annual Technology Extravaganza on Thursday at Madison Central High School. After the showcase, more than 350 students were honored for their work.

    April 19, 2014 7 Photos

  • 4-19 SchoolBoardJesseWard.jpg Ward honored for service; tech center named after him

    Retired Madison County educator Jesse Ward was recognized Thursday for his many years of service. To honor him, Superintendent Elmer Thomas announced the board’s decision to rename the district’s technology training center on North Second Street in Richmond the Jesse P. Ward Technology and Training Center.

    April 19, 2014 1 Photo

  • 4-19 Brian Smith.jpg Berea man indicted on 24 child porn counts

    A Madison grand jury has indicted a Berea man on 24 counts related to child pornography.

    Brian J. Smith, 26, is charged with four counts of distribution and 20 counts of possession of matter portraying sexual performances by a minor.

    April 19, 2014 1 Photo

  • 4-19 Gregory Powell.jpg Police apprehend burglary suspect

    An observant witness was able to help Richmond police catch a burglary suspect shortly after a break-in Thursday afternoon on Savanna Drive off Berea Road.

    April 19, 2014 1 Photo

  • 4-18 PackTrack1a.jpg Walkers, runners of every age ‘Pack the Track’

    Waco Elementary and Model Laboratory schools students raised more than $8,000 (and counting) for the annual Pack the Track event at Eastern Kentucky University’s Tom Samuels Track Thursday, said Kim DeCoste of the Madison County Diabetes Coalition.

    April 18, 2014 14 Photos

  • 4-18 George WilliamsWEB.jpg Suicide attempt fatal for inmate

    A Todd County man died Tuesday at a Lexington hospital following a suicide attempt at the Madison County Detention Center, according to Madison and Fayette county officials.
    George Kenneth Williams, 50, of Allensville, was transported Monday afternoon by Madison County EMS to Baptist Health Richmond, according to EMS Director Jimmy Cornelison. He was then transferred to Baptist Health in Lexington where he died Tuesday, according to the Fayette County Coroner’s Office.

    April 17, 2014 1 Photo

  • CCDW instructor indicted on charges of failing to provide training

    A Madison County grand jury has indicted a carry-concealed weapons permit instructor on charges he falsely claimed to have provided instruction to one person for a CCDW permit and provided incomplete training to three others.
    Christopher D. Fins was indicted April 9 on one count of CCDW instructor not providing firearms training and three counts of providing incomplete firearms training.
    Fins faces up to 20 years in prison if convicted of all four felony charges.

    April 17, 2014

  • EKU dorm sprinklers may have been activated maliciously

    Fire-suppression sprinklers went off about 2:30 a.m. Thursday in Eastern Kentucky University’s Martin Hall dormitory, prompting its evacuation.
    Fluctuating pressure then caused a campus water main to break, according to EKU spokesperson Mark Whitt.
    The cause is uncertain, but university officials are investigating to determine if the sprinklers were activated maliciously, Whitt said.
    The residence hall houses 260 students who were placed in other university housing or stayed with friends. All were able to move back in later in the day, he said.

    April 17, 2014

  • Sixth person charged in motel meth bust

    A sixth person has been charged in connection with a methamphetamine-making operation discovered last week at the Bel Air Motel in Richmond.
    Roger M. Million, 24, Moberly Road, was charged Wednesday with manufacturing methamphetamine.

    April 17, 2014

AP Video
Raw: Orthodox Christians Observe Easter Rite Ceremony Marks 19th Anniversary of OKC Bombing Raw: Four French Journalists Freed From Syria Raw: Massive 7.2 Earthquake Rocks Mexico Captain of Sunken SKorean Ferry Arrested Raw: Fire Destroys 3 N.J. Beachfront Homes Raw: Pope Presides Over Good Friday Mass Raw: Space X Launches to Space Station Superheroes Descend on Capitol Mall Man Charged in Kansas City Highway Shootings Obama Awards Navy Football Trophy Anti-semitic Leaflets Posted in Eastern Ukraine Raw: Magnitude-7.2 Earthquake Shakes Mexico City Ceremony at MIT Remembers One of Boston's Finest Raw: Students Hurt in Colo. School Bus Crash Raw: Church Tries for Record With Chalk Jesus Raw: Faithful Celebrate Good Friday Worldwide Deadly Avalanche Sweeps Slopes of Mount Everest Police Arrest Suspect in Highway Shootings Drought Concerns May Hurt Lake Tourism
Hyperlocal Search
Premier Guide
Find a business

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

Should the Richmond City Commission stop rezoning property to allow construction of apartments?

     View Results