Local lawmakers share reasoning behind votes on new pension-relief law
On Wednesday, the 2019 Special Session concluded with the signing of House Bill 1 into law by Governor Matt Bevin.
The law took effect immediately through an emergency clause.
It affects Kentuckians receiving retirement benefits through Kentucky Retirement System's KERS Nonhazardous employer contribution rate.
This includes quasi-governmental agencies like child advocacy centers and health departments, and regional universities, like WKU.
"They were facing, literally facing, a doubling in their pension cost. Would've easily put them out of business, or at least put them in a situation where they would had to lay off a lot of people immediately," said State Representative Steve Sheldon, (R), who voted for the bill. "It would have been a very difficult situation for them had we not just passed this bill."
WKU had gone ahead and budgeted for an increased pension obligation of $4.5 million, but the news changes things.
"This helps our budget quite a bit. It gives us the freedom to actually put money back into what really matters and that's our students and our faculty and staff," explained the university's media relations director, Bob Skipper.
The new law gives employers involved multiple options for exiting KERS.
"I know there is concern that they did not want to lose any of their benefits, so that's why we have to be careful and consider all of our options to make sure that whatever option we take is in the best interest of these employees. We want to make sure that they're not losing anything that they were expecting to in retirement," Skipper said.
For others who've opposed the bill -- they worry this decision creates a slippery slope.
"The Fraternal Order of Police is concerned greatly about the bill and how it passed. We are struggling with recruiting and retaining good, qualified law enforcement officers. This is one more attempt to reduce benefits for existing employees, and when you reduce benefits we can't keep officers doing the job, protecting the public, and doing the things they need to do," said Shawn Helbig, president of the local Fraternal Order of Police.
"This is a manufactured crisis by Governor Bevin that harms public institutions and public employees and it held our regional universities and our community mental health centers, rape crisis centers, domestic violence centers -- held them hostage, so that they have to make difficult decisions now about what they do for their employees retirement," said Representative Patti Minter, (D), who voted against the piece of legislation.
Solutions are hoped by one side to be on deck.
"If they're worried about a slippery slope, or that this is going to bleed off into some other -- there's no reality to that, because this was the worst-funded pension. This is why we had to address it this way. We don't have to go back and address --- others are in better shape. We still have to work on some things. But this was addressing the very worst-funded pension, and why wouldn't we have started with them and come up with an answer for them separately than everybody else," said Sheldon.
For others, legal trouble is believed to be on its way.
"The groups that represent government retirees have already made lots of comments about a pending lawsuit. So we'll see what happens," Minter said. "As a legislator, this is now out of my hands until the 2020 session begins. But it's very, very likely that there will be a lawsuit, and again, I believe this is an illegal bill that violates the inviolable contract. I also think the governor had made several legal mistakes calling the session and defining the terms of what we could pass in the way that he did."