FRANKFORT, Ky. (AP) The Kentucky House of Representatives has rejected a bill that would let some entities leave the struggling pension system while paying less than they owe.
House Bill 358 would let quasi-governmental entities like universities and public health departments leave the Kentucky Employees Retirement System without full payment.
State officials said it could cost the already underfunded system as much as $1 billion.
The state Senate approved the bill by a vote of 25-12 on Wednesday, arguing it would protect the entities that cannot afford skyrocketing retirement contributions for their employees.
Thursday, the House rejected the bill, sending it back to the Senate.
Lawmakers have to reach a compromise by midnight or they will lose the ability to override a potential veto by the governor.
Kentucky's legislative leaders have agreed to borrow $75 million to fix up the park system and bolster its efforts to attract businesses to the state.
House Bill 268 would borrow $50 million for the park system and $25 million for economic development.
It would cost taxpayers $3.1 million in payments next year, money that would come from the state's $130 million in reserves.
The House and Senate are scheduled to vote on the proposal by midnight on Thursday.
The deal comes one day after lawmakers voted to reduce revenue by $105 million a year to give a tax break to locally owned banks and exempt some nonprofits from sales taxes.
House lawmakers are also considering letting some entities leave the pension system while paying less than they owe.