If Pension Overturn Sticks, Kentucky GOP Plans to Pass a Reform Anyway

As the state Supreme Court mulls whether to reinstate the new Republican pension law, the party’s lawmakers look for a Plan B if they lose.

Should the Kentucky Supreme Court strike down a controversial pension reform bill, Republican leaders are saying they will simply pass another one.

The bill seeks to change state employee retirement benefits, denying newly hired teachers enrollment in the traditional defined benefit pension program, and pushing them into a hybrid 401(k)-style plan. The bill also caps the number of sick days public workers can use toward retirement and compels workers hired between 2003 and 2008 to pay healthcare premiums. The measure was originally passed in the spring, tucked into a sewage bill during the last days of the 2018 legislative’s session.

A lower court then negated the reform over the summer, ruling in favor of a lawsuit led by Attorney General Andy Beshear, a Democrat. The Franklin Circuit Court overturned the law on procedural grounds since the bill was passed in a hurry and because it was an appropriations bill, and therefore needed a bigger majority than it gained.

Gov. Matt Bevin, the bill’s proponent and a Republican, appealed the court’s ruling to the state’s highest court.

The Supreme Court’s decision regarding the appeal is expected to come as early as next week, but should the bill stay dead, the legislature should start working on getting a new measure passed.

“If it is something we have to revisit and can be based on procedure, I think we can do that and I think we should because it is a problem that has not gone away,” Senate President Robert Stivers said at a Kentucky Chamber of Commerce event, reported by WVXU.org.

One possible other method of shoring up the state’s underfunded ($37 billion short of meeting obligations) public pension system is to legalize gambling and generate more tax revenue. New Jersey, another badly underfunded state, has been doing something similar with lottery money.

However, Stivers is not impressed with this concept, as he doesn’t think gambling is the “silver bullet.”

“Even if it [gambling] were to pass, it’s still only a drop in the bucket,” he said.

David Osborne, the incoming state House speaker, also thinks the Republican-led legislature would push another reform bill ahead in the event of the appeal’s dismissal, although he is unsure “that we would be passing the exact same piece of legislation this time around.”

“Quite frankly I’m not sure how we’re going to deal with it if it does get overturned,” said Osborne.

The state of Kentucky’s pension is 31% funded.

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