The state pension issue IS important, but . . .

September/October 2018

Some are using our significant crisis as a political weapon rather than truly working to find the solution.

The 600-pound gorilla in the room this Fall is the question of state pensions. Clearly, just as bread has two sides, there are naturally two sides in this debate. Unfortunately, BOTH sides are credible. On one hand, Kentucky’s financial future is in serious jeopardy with the state’s massive pension liability – at $60 billion, it is the worst in the nation. Without a good solution, Kentucky could go into bankruptcy, impacting both pension recipients AND every other Kentuckian.

On the other hand, when you promise a workforce retirement benefits, you cannot leave them high and dry – Period! Especially when removing those benefits when they are in retirement or approaching retirement.

It’s more than a matter of policy, it’s the foundation of integrity and credibility of state government. How can government ask its citizens to follow the law when it does not?

Without doubt, this is a MAJOR issue with HUGE ramifications. Both sides have valid concerns.

But the problem is actually getting even worse—far worse; there are those who, in the midst of this course-changing crisis, are turning it into a political issue rather than a fiscal and moral one. In other words, it’s being made into a political weapon to get “this” person elected over “that” one and to un-elect “those” persons in order to elect “this” slate. This practice is tantamount to price-gouging basic supplies after a natural disaster – a political party profiteering from a genuine crisis.

Literally, bold-faced lies have been spread. For instance, some teachers have actually been told that legislators have used pension money for something other than the pension, in essence, “raiding” the pension fund. That’s just a classic vilification of a group on the basis of a falsehood. It’s not true; the pensions are in trouble for two key reasons: 1) Legislators from both Parties ignored a warning by an independent actuary concerning enhanced benefits passed in 1998; and, in addition 2) some of the benefits that were expanded included medical benefits for life.

Does anything rise more rapidly than medical costs?

Last Spring, the House and Senate passed Senate Bill 151, albeit in a very clumsy way. (It was heard by the Kentucky Supreme Court on Sept. 20; the court is expected to expedite its decision.) But it gave teachers and those with pensions about 98 percent of what they were asking for. Yes, it did change what will happen to new hires, without a doubt, but the benefits were made secure for those already employed. And some have pointed out that the new hires may actually make out better with the new plan set up for them.

So adequate were the provisions in SB151 that in April the Jefferson County Teachers Association asked teachers NOT to consider a work stoppage; rather, just accept the new arrangements because they couldn’t get any better: “Consequently, the Association does not believe this is adequate rationale to maintain the support needed to be successful in an extended work stoppage, and such, it would be irresponsible and ultimately extremely counterproductive to attempt to do so.”

Now, Frankfort observers are watching Attorney General Andy Beshear’s “fight in court” against the bill that passed, but many are wondering if he’s just trying to rev-up the teacher’s union for the Nov. 6 election and get them on his side for the elections of 2019.

ANY WAY you look at it, Kentucky and all Kentucky state workers deserve better.

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