Kentucky lawmakers called into special session for pension relief bill

The Kentucky State Capitol in Frankfort. (Source: WAVE 3 News)
The Kentucky State Capitol in Frankfort. (Source: WAVE 3 News)
Updated: Jul. 15, 2019 at 7:55 PM CDT
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FRANKFORT, Ky. (WAVE) - Gov. Matt Bevin has set the start date for a special session aimed at tackling the pension crisis.

The Kentucky General Assembly will be called to order at 8 a.m. on Friday, July 19.

The special session will deal with providing relief to Kentucky's quasi-agencies -- including regional universities, health departments, domestic violence centers, and community health centers -- from the financial stress caused by the state’s looming public pension crisis.

In May, Bevin said he wouldn't call a special session unless the votes needed to pass legislation to give immediate relief and provide long-term options were available.

Bevin said the bill that is being presented "has been thoroughly vetted and improved with input from legislators" and "is the only fiscally responsible plan that provides our regional universities and quasi-governmental agencies with a path to a sustainable future."

The governor said it “will offer these organizations the ability to continue operation and save critical community services.”

Bevin first announced this special session would happen during an April veto message. The original goal mapped out by many lawmakers was to re-draft a passable relief bill by July 1.

That deadline has come and gone. So for quasi-government agencies, the amount employers will have to pay to provide a pension is now equal to 84 percent of payroll. Before this month, it was just 49 percent.

"That's a very significant jump and wipes out some of their budgets," Eileen Recktenwald, Executive Director of the Kentucky Association of Sexual Assault Programs, said.

Representative Jason Nemes, (R) District 33, was at a family baseball game Monday night. But he had Friday in mind after weeks of working with the executive branch and both legislative chambers.

Nemes said Republicans now have at least a majority of votes in both the House and Senate. That’s what he said they need to pass the bill.

“They’re not governmental agencies, they’re quasi-governmental agencies, private employers,” Nemes said. “So, they need to pay their own way. We’re going to help them, but in the end they have to pay their own way.”

Nemes said under the bill crafted for the special session, the employer contribution rate will freeze in the forties for a year.

During that time, agencies would have to decide between five choices.

One will be to stay in the pension system and face higher future contribution rates. Other options would involve agencies paying their way out of the system up front or in differing installment plans.

Many Democrats agree with the rate freezing, but are concerned about finding new funding and what groups exiting the pension system will mean for its ability to provide benefits.

“We need to have a productive session not an ideological fight,” Sen. Morgan McGarvey, (D) Minority Floor Leader, said. “Democrats have put forward plans and those need to be considered in the governor’s call for a special session.”

Nemes said the session would begin with a first reading Friday, a committee hearing and additional reading Saturday, and a House vote Monday. That process would continue in the Senate concluding the following Wednesday.

Nemes said the quasi-government pension system is important to those it provides benefits to, but also other Kentuckians, because its health affects the state’s credit rating.

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