FRANKFORT, Ky. — Kentucky’s Republican House speaker says it is “highly unlikely” lawmakers would approve a pay cut for some of the state’s more than 165,000 retired public workers as part of a proposal to rescue the troubled public pension plan.
Speaker Jeff Hoover said he has not seen any support among lawmakers for eliminating 16 years’ worth of cost-of-living adjustments as a way to save one of the country’s worst-funded public pension systems from insolvency. Hoover said “there may be some variation” of the proposal, but said lawmakers would most likely not consider getting rid of the raises.
Last week, a state-funded analysis of the pension systems by PFM Group Consulting recommended eliminating the raises and freezing benefits for current workers. On Wednesday, the state’s top two legislative leaders tried to distance themselves from that report, which has prompted widespread criticism among public employees.
“Recommendations are just that,” Republican Senate President Robert Stivers told reporters following a brief meeting of the Legislative Research Commission. “The final say so in what will be presented to a governor at some point in time will be done by the General Assembly. And I have yet to see that the PFM has a seat in any chamber.”
Kentucky taxpayers are at least $33 billion short of the money required to pay pension benefits over the next 30 years to state workers, police officers, firefighters, teachers and other local government employees. State Budget Director John Chilton has said if the pension system is left unchanged, the state must find an extra $1 billion a year to keep it afloat. Without a tax increase, that would require budget cuts of at least 34 percent across most of state government.
Republican Gov. Matt Bevin has vowed to call a special session of the state legislature later this year to make changes to the pension system. But Bevin and lawmakers have not said what changes they would make. The report from PFM Group Consulting was the first glimpse the public received of any potential changes, and it spurred retiree and state worker groups to threaten lawsuits if lawmakers should approve them.
Some public employees have rushed to retire ahead of the changes. Retirements on Sept. 1 were up 37 percent compared to last year, the largest increase in the past five years. Bevin has attempted to soften some of the panic by posting videos to his social media accounts and hosting a Facebook Live event to take questions from state workers. Wednesday, Bevin heard from one angry state worker who called in to a local radio show where the governor was being interviewed.
“You want to demonize state employees and you want to put them in the crosshairs for a system that they are required to contribute to and lawmakers have not,” said the caller who identified himself as Brian on WKYX Radio.
The man was referring to comments Bevin made during a previous radio interview where he said some state workers “hoard” sick days to inflate their pension benefits and “stick it to the taxpayer.”
Bevin thanked the caller for his service to state government, telling him “I am truly grateful to you, it’s what makes the system work.” He encouraged him to “watch the things that I actually put out there, not what other people report about what I said.”
“Some of the comments you make are just plain false. I have not denigrated anybody who is a public employee, that’s what’s been written by others,” Bevin said. “There is a lot of fear, a lot of rumor, a lot of misrepresentation that are being said. But I am going to save this pension system along with our legislature.”
Asked by the host if Bevin’s comments made him feel better, Brian said he would “wait and see.”