ASHLAND Local legislators have mixed opinions about a pension-relief bill that Gov. Matt Bevin vetoed on Tuesday.
House Bill 358 passed on March 28 giving regional universities, local health departments and other quasi-governmental agencies relief from the rise in pension costs they will have to deal with at the start of the new fiscal year on July 1.
The Associated Press reported that Bevin said he appreciated lawmakers’ work but said parts of the final product in House Bill 358 “violate both the moral and legal obligation” to retirees. In his veto message, Bevin said: “HB 358 will very likely result in a suspension of pension and health insurance benefits already earned by retired employees of quasi-government agencies.” He said he’s confident lawmakers will “make the needed corrections” in a special session that he intends to call in the coming months.
The proposal would have let the state’s 118 quasi-governmental agencies — which include rape crisis centers, public health departments and some universities — leave the state’s troubled pension system. But they would have exited by paying less than what they owe. The concession was designed to save them from bankruptcy, but it could cost the already struggling system as much as $799 million.
Sen. Robin Webb, D-Grayson, voted against SB 358, noting it was presented in the eleventh hour on the last day of the regular session. She said she feels the bill was “wrong on several different levels.”
“I thought the bill was illegal under current law and I don’t think it’s a viable option to protect state employees’ retirement,” she said.
Webb said she feels a lot of time was wasted in the session not talking about coming to a bipartisan solution on the matter. She said there needs to be an agreement made before entering a special session, explaining it would be a waste of taxpayer money.
Rep. Danny Bentley, R-Russell, was one of 58 legislators who voted for SB 358. He said he feels the bill was good legislation, noting his fellow legislators sat down with every stakeholder involved and did their research.
“There’s 118 agencies involved with that and they have to pay 84 percent of their pension contribution so a lot of them couldn’t afford that,” he said.
Rep. Terri Branham Clark, D-Ashland, said she voted against the bill because she felt like it was going to have a devastating impact to Kentucky retirees. She said a solid actuarial analysis was not presented on allowing the 118 agencies to exit, pointing out the legislatures were being asked to pass a bill on hypothetical analysis.
Branham Clark said there were other options for legislators throughout the session that were not called on the last day. She said she was in support of SB 41 that would freeze pension contribution rates for regional universities and quasi-governmental agencies for one more year.
During this time she said a bi-partisan pension working group would have until December to come up with recommendations for a comprehensive solution to the pension crisis. Branham Clark said the group was suspended mid-session.
“I don’t understand why we would form a working pension group and then not give them the opportunity to conduct their hearings and give us a recommendation,” she said.
Branham Clark said she also doesn’t consider it to be fiscally responsible to call a special session when there were options available that legislators were asking for in the regular session.