FRANKFORT, Ky. — Kentucky’s Republican leaders announced Tuesday that they have agreed on a plan to change one of the nation’s worst-funded public pension systems.
Gov. Matt Bevin has scheduled a 9 a.m. news conference Wednesday in the state Capitol along with fellow Republicans House Speaker Jeff Hoover and Senate President Robert Stivers to unveil a proposal the trio has named “Keeping the Promise.”
“This is a bill that every single legislator will vote for if they are doing what’s right for retirees and for state workers,” Bevin said in a video posted to his Twitter account announcing the news conference. “I’m confident in our ability to solve this problem and to be an example for the nation in what good fiscal responsibility looks like.”
Earlier in the day, Bevin told reporters the proposal is more than 400 pages long, but said “it’s going to be easy for people to understand.” He promised the public would have “ample opportunity” to read the proposal, understand it and ask questions about it.
Kentucky officials are at least $33 billion short of the money required to pay retirement benefits over the next 30 years to state workers, teachers, police officers, firefighters and other local government employees. The Republican majorities of the House and Senate say they won’t raise taxes, leaving them with few options to pay down the debt. Kentucky finished the 2017 fiscal year with a $138 million shortfall last year and state economists say taxpayers are headed toward a $155 million shortfall this year.
The state legislature is not scheduled to reconvene until Jan. 2. But Bevin has said he will call lawmakers back to Frankfort for a special session to vote on the bill. It’s unclear when that session would take place. Hoover, the House speaker, has said he wants state lawmakers to have at least 30 days to study the plan before voting on it.
As governor, Bevin can call the legislature back into session whenever he wants. But lawmakers don’t have to pass a bill. If lawmakers don’t agree on what to do, they could cost taxpayers hundreds of thousands of dollars to argue for a few days and then adjourn.
That’s why Bevin and top legislative leaders have been meeting in secret for months trying to craft a proposal that has enough votes to pass. But the uncertainty has prompted fear among the more than 400,000 active, inactive and retired members of the state’s various public pension systems.
But at least one worried teacher has seen the plan: Republican state Rep. Bam Carney. A former social studies teacher, Carney still works for his local school district and is a member of the Kentucky Teachers Retirement System. He said people will be surprised with the proposal, adding it meets all the moral and legal obligations to state workers.
“Obviously there is going to be some sacrifices for everybody across the board,” he said. “I feel like I’m getting what was promised to me when I signed my contract years ago. I think that’s part of this deal.”
But Carney acknowledged the state’s revenue problem, adding, “If we don’t increase revenue in Kentucky, we’ve got some serious issues.”
Lawmakers have been proposing several new ideas for the state to make more money. Republican state Sen. Dan Seum proposed legalizing marijuana and then taxing it, saying it could generate $100 million a year in revenue for the state.
But Bevin dismissed that idea on Tuesday, noting the state’s pension debt could be as high as $60 billion according to some estimates.
“That’s 600 years of smoking pot to fix the pension crisis. I don’t think that’s the solution for Kentucky,” Bevin said. “We’re going to fix it with constructive changes and not with delusional ideas like that.”