FRANKFORT, Ky. (KT) – Republicans in the Kentucky Senate expect to pass the hotly debated public pension reform bill on Friday.
Senate President Robert Stivers, R-Manchester, was asked Thursday if he had the votes to pass the bill and said: “I’ve got the votes, or I wouldn’t be putting it on the floor.”
Sen. Joe Bowen, R-Owensboro, the bill’s sponsor, will file an amendment technical in nature, Stivers said. Democrats have filed three floor amendments and will likely oppose the bill during Friday’s morning session but they can’t defeat it without unexpected Republican defections.
If approved by the Senate and House of Representatives, retired teachers would see their annual cost-of-living raises cut by 33 percent for the next 12 years or until the system is at least 90 percent funded.
A consulting firm hired by the state says the changes would save taxpayers roughly $3.2 billion over the next 20 years. Most of those savings would come from changes to the Kentucky Teachers Retirement System.
Other changes include not letting teachers accumulate sick days past July 1, meaning they can't use them to boost their benefits when they retire. The bill would change the formula for teachers who have worked less than 20 years, encouraging them to work longer to get more generous benefits.
The bill also saves money by shifting some of the costs to local school districts. The change would come at a time when some districts are dangerously close to insolvency because of other funding issues.
Stivers says SB 1 ends the practice of allowing state lawmakers in the future to “supersize” their pensions with other higher-paying state jobs they take after leaving office, while those who have already engaged in the practice would be grandfathered in.
“We felt, looking at the legal analysis, that we could not maintain a viable legal justification for retroactively clawing back those monies. Did we want to do it? Without a doubt.”
The state's Republican leaders say the pension systems would likely fail without the changes. Kentucky has one of the worst-funded public pension systems in the country. The state is at least $41 billion short of the money required to pay benefits over the next 30 years.
Last week, the House of Representatives approved a two-year budget that would put more than $3.3 billion into the pension system, or nearly 15 percent of all state spending.
"If we miss this opportunity to save the systems, we may not get another chance before it is too late," said Bowen.
State workers and teachers say the measure breaks the promise of a secure retirement made when they were employed and doesn’t follow the “inviolable contract,” a guarantee that existing benefits would not be taken back which lawmakers made a statute years ago.
Democratic Attorney General Andy Beshear reiterated this week that the rollback in some benefits is unlawful and that the state will lose in court if the law is challenged.
The Senate convenes at 9 a.m. Friday.
The Associate Press contributed to this story.