You are here: Home / Archives for Gold Rush

Make Kentucky public pensions transparent now

January 9, 2013 By Leave a Comment

Public pension debt is sinking Kentucky and it is being done behind closed doors.

 

Demand that legislators make the public pension system transparent!

Included in KRS 61.661 is language that ensures public pension disbursements are not subject to open records laws.Kentucky has been broken by a $34 billion unfunded public pension liability and taxpayers don’t have a chance of holding their government accountable without transparency.

Contact your legislator (call toll-free (800) 372-7181) and tell them you want to know how your tax dollars are being spent in the Kentucky Retirement System.

You can learn more here and here.

Filed Under: Smaller Government, Transparency and Accountability Tagged With: , , ,

Editorial echoes Bluegrass Institute’s call for reforming corrupt pension system

November 4, 2012 By Leave a Comment

The Lexington Herald-Leader today joined the Bluegrass Institute in calling for reforming the state’s corrupt legislative pension system. The editorial stated:

“Kentucky’s public pension systems have myriad problems, including a collective unfunded liability exceeding $30 billion. By comparison, the cost of this loophole is miniscule (sic). But the principle is huge. Even without this reciprocity, the rules lawmakers have created for computing their own pensions are more generous than the rules used to determine the benefits of rank-and-file public employees. The reciprocity loophole just rubs the faces of those rank-and-file workers — and of taxpayers — deeper in the dirt. It must end as part of pension reform.”

The pension-reform banner is being carried during the current election by many House candidates challenging incumbents who have kicked the can down the road, resulting in an out-of-control pension system that threatens to crowd out essential services, threaten retirees’ pensions and decimate the commonwealth’s entire economy.

Read the Bluegrass Institute’s latest report on the state’s retirement-system crisis entitled “Future Shock: Kentucky Politicians’ Opulent Pensions Have Become a Modern-Day Gold Rush.”

Filed Under: Reduce Government Spending, Uncategorized Tagged With: ,

Prefiled bills seek to end legislator pensions

September 5, 2012 By 1 Comment

In a recent press release, state representative David Floyd, R-Bardstown made it known that he has prefiled legislation for the 2013 General Assembly session that would end the practice of bestowing lucrative public pension benefits to Kentucky’s part-time legislators.

That is certainly one way to attack the state’s egregious unfunded public pension liability.

The proposed legislation would see the end of enrollment in the system in August 2013 and would also allow current legislators to opt out of the system.

Kentucky’s public pension system is out of control. The Bluegrass Institute’s recent Gold Rush exposé outlines many of the ways that legislators have worked to enhance their pensions through legislation over the past 50 years. This type of abuse has contributed to a $34 billion unfunded liability that is  financially breaking the state.

It is past time to take a serious look at reforming the current system. Hopefully legislation of this nature being proposed indicates the willingness of Kentucky’s leadership to finally address what has become what Lowell Reese, author of Future Shock: Kentucky Politicians’ Opulent Pensions Have Become A Modern-Day Gold Rush, calls a “societal issue.”

 

Filed Under: Reduce Government Spending, Smaller Government, Transparency and Accountability Tagged With: , , , ,

What is the ‘full price’ for Lexington taxpayers?

July 16, 2012 By Leave a Comment

With pension systems at all levels of government across the nation experiencing difficult times, I believe we can expect to see more conversations like the one in a recent Lexington Herald-Leader editorial:

…it’s so hard to find a solution for Lexington’s underfunded police and fire pension system. Through multiple mayors and council members, two task forces and endless computations, the facts have remained stubbornly stark, changing only for the worse.

The editorial goes on to paint a bleak picture for the city’s police and fire protection pensions pointing out that the unfunded liability is nearly half a billion dollars. After setting the stage, a solution to the problem is suggested: mutual sacrifice for taxpayers, police and firefighters, and legislators.

The paper rightfully points out that:

  • police officers and fire fighters put their lives on the line each and every day,
  • that police and fire protection have lobbied for very generous benefits,
  • a stock market crash has muddied the waters of appropriately funding pensions,
  • the state legislature needs to step up and help solve this problem
I do believe though, that the Lexington Herald-Leader needs to qualify their final point:
For Lexington taxpayers: You’ve enjoyed the security of excellent police and fire protection but you haven’t paid the full price for it.
When a statement like that is thrown out, it begs the question: what would be the full price? How much more do taxpayers need to fork over before they have fully paid for police and fire protection?

Unemployment in Kentucky is currently at 8.2%, businesses are leaving the state due to an unfriendly business climate, the nation is in a precarious financial state and Kentucky’s families are bracing themselves for huge tax increases already. On top of this, Lexington citizens may also shoulder the burden of tax increases to resolve the state pension problem and the unknown effects of “Obamacare” loom large. It is difficult to tap a well that is already running dry.

What say you, Lexington Herald-Leader? How much more do Lexington taxpayers need to contribute before they have paid the full price?
Filed Under: Reduce Government Spending, Smaller Government Tagged With: , , , , ,

Lexington mayor talks “unsustainable” pensions

July 2, 2012 By Leave a Comment

“Thorny” and “out of control” are the words that Lexington Mayor Jim Gray used to describe the city’s pension situation. Uh oh.

In a recent interview with WUKY, Gray explains how the city’s annual required contribution to the pension system has increased by 400% over the past decade and describes this is as “unsustainable”. He goes on to say that if this continues it will threaten the city’s competitiveness. Unfortunately, he is correct. In fact, Lexington’s pension woes mirror those of the state.

Gray also correctly points out that the taxpayers are footing the bill and deserve a chance to resolve this problem.

I appreciate the mayor recognizing the severity of the problem as it most certainly will not solve itself, as some seem to think it will.

I do hope that something is done quickly. It seems that Kentucky is digging deeper and deeper into debt and the longer we wait to fix the problem, the worse it will get. You can read more about Kentucky’s pension crisis here.

Filed Under: Reduce Government Spending, Transparency and Accountability, Uncategorized Tagged With: , , , , ,

Bluegrass Bullet: Pension double-dipping

July 2, 2012 By Leave a Comment

Double-dipping is not only repugnant at parties. It’s unacceptable for politicians in Kentucky’s pension system, too.

Filed Under: Reduce Government Spending, Transparency and Accountability Tagged With: , , , ,

History repeats: pension funding potentially even worse

June 27, 2012 By Leave a Comment

Is Kentucky’s public pension mess even worse than we thought…again?

A recent New York Times article by Mary Williams Walsh discusses how the Government Accounting Standards Board (GASB) has revamped the rules for reporting the health of public pension systems. It boils down to this: the new rules require more disclosure and as more information about these pension systems is brought to light, we will find that they are in even worse shape than we already thought.

No piece about poorly funded pension systems would be complete without mentioning Kentucky and so the article does with reference to Robert Attmore, chairman of the GASB, being asked about which municipalities will be impacted the most:

Mr. Attmore declined to predict which states and cities would bear the brunt of the board’s rule changes, but said that, in general, it would be those that had failed, year after year, to set aside as much money as their actuaries instructed. Such plans include those operated by Illinois, New Jersey and Kentucky.

That is bad news.

Kentucky’s public pension debt is almost four times the size of the state’s General Fund budget. FOUR TIMES! There is also no question that the Commonwealth qualifies as an entity that has not set aside enough money. Ten years ago the Kentucky Employee Retirement System was almost fully funded and today is closer to 30%. That is a huge difference in a very short amount of time.

The Bluegrass Institute’s recent series of reports on Kentucky’s pension crisis certainly presents the severity of the state’s situation but with these new  accounting standards in place, will we find that the situation is even more grave than we thought? I certainly hope not. As author Lowell Reese points out in Future Shock: Kentucky Politicians’ Opulent Pensions Have Become A Modern Day Gold Rush:

Public employee pension are now a societal issue: the standard of living of all Kentuckians is at stake. The state’s public servants and retirees are increasingly concerned about the security of their retirement accounts, and rightfully so.

Filed Under: Increase Free Markets, Transparency and Accountability Tagged With: , , , ,

Bluegrass Bullet: How much can one vote cost?

June 21, 2012 By Leave a Comment

How much can one vote cost? One way to find out is to examine how a single vote by politicians to change their pension formulas in 2005 is costing taxpayers big-time in 2012.

Filed Under: Reduce Government Spending, Smaller Government, Transparency and Accountability Tagged With: , , ,

Why the pension-debt explosion?

June 15, 2012 By 1 Comment

It’s no secret that Kentucky’s pension system is in trouble. But it has not always been this way.

In fact, back in 2000, the commonwealth’s pension debt was a meager $960 million. Five of Kentucky’s six public pension systems were running generous surpluses. The Kentucky pension system was among the nation’s strongest.

A dozen short years later, unfunded pension debt has erupted to more than $34 billion, swelling the state’s debt burden and threatening to crowd out other government services like education and public safety.

Funding for pensions fell below 50 percent in 2010 and continues to fall. The Kentucky Employee Retirement System (KERS) has fallen especially low. While it once ran surpluses, the KERS is now only about 30-percent funded — one of the worst funded in the nation. (For a comparative chart of 126 pension systems funding ratios, click here)

What happened?!

Debt apologists will point to poor economic conditions to explain Kentucky’s pensions woes. Obviously, this is part of the problem. As asset values fall, so do funding ratios for state pension plans across the board.

What makes Kentucky exceptional is that it went from being one of the best-funded nationwide to one of the worst in a decade.

If the stock market was the only reason for the pension debt explosion than we would expect Kentucky’s pensions to remain among the best funded. But they are not.

The question we are asking is not “why have unfunded liabilities increased?” but “why have Kentucky’s unfunded liabilities increased so much more than everyone else’s?”

The answer is now obvious thanks to “Future Shock: Kentucky Politicians’ Opulent Pensions Have Become A Modern-Day Gold Rush.”

Poor economic performance is not the only culprit behind Kentucky’s wildfire of unfunded pension debt. Lavish pensions and a generous basket of benefits share the blame.

House Bill 299, which is discussed in the report, illustrates how greedy legislators have voted themselves generous pensions. However, the abuse of the system does not end there. A collection of other perks have been accumulating for years:

* Legislators’ automatic enrollment in the KERS after maxing out their legislative pensions.  “Future Shock” also shines the light on politicians whose retirements have doubled or tripled as a result of HB 299.

* State employees’ ability to buy “air time” — years of service not actually worked — to beef up their pension calculations.

* State legislators also receive full health care compensation … and they are better benefits than most of their constituents can afford.

Kentucky’s pension problem is not the result of poor foresight alone. Greedy politicians and benefit-creep are obvious contributors to the problem.

Filed Under: Reduce Government Spending, Transparency and Accountability Tagged With: , ,

‘Gold Rush’ author Lowell Reese interviewed

June 13, 2012 By Leave a Comment

Radio talk show host Joe Elliot at 970 WGTK interviewed Bluegrass Institute scholar Lowell Reese recently about the Institute’s new policy report “Future Shock: Kentucky Politician’s Opulent Pensions have become a Modern Day Gold Rush. ” The interview is the report in micro: Reese tells all the shocking numbers, obscene abuses, and conclusions the report offers.

Reese pulls no punches on the commonwealth’s retirement services “The Kentucky Employee Retirement System is virtually broke.” In the interview, Reese explains point by point how legislators are responsible for creating a public pension system which is not only in putting every Kentuckian deeper into debt, but also opens the door to new political leveraging.

In this respect, Reese responds to what the report cannot by discussing recent attempts and promises to fix the system.  “What they [the Kentucky Legislature] did in the summer of 2008 with what they called the reforms of the pension system was very, very cosmetic” says Reese.

The interview (and report) makes it obvious that the taxpayers of Kentucky are being duped by their representatives, Republican and Democrat alike, into paying for one of the nation’s most lavish public pensions programs.

The interview can be found here.

Filed Under: Reduce Government Spending, Transparency and Accountability Tagged With: , , ,
« Older Posts