Bluegrass Beacon – Fighting open-meetings offenses: Short-term pain, long-term gain

BluegrassBeaconLogoEditor’s note: The Bluegrass Beacon is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.

Getting sued and seeing the glass half full is an obvious oxymoron – unless the lawsuit leads to a court decision establishing judicial precedent ensconcing a more open, transparent and accountable government.

Kentucky House leaders’ determination to rebuff the attorney general’s decision that the House’s closed-door gathering last summer to discuss pension reform violated the commonwealth’s Open Meetings Act and instead take the issue to court – hence, the lawsuit against the Bluegrass Institute – brings the saga one step closer toward final rejection of using legislative maneuvers to avoid future secret meetings on politically difficult issues.

House Republican leaders are attempting to maneuver around open-meetings requirements by claiming the Aug. 29 assembly to discuss controversial recommendations released the previous day for reforming the state’s pension systems was just another one of their political caucus meetings open to the Democratic minority caucus as well.

House attorney Laura H. Hendrix responding to a complaint filed by the institute’s Center for Open Government defended the secret meeting, arguing that political caucus assemblies are “specifically exempt” from the Open Meetings Act.

This isn’t the first attempt by House leaders seeking a closed-door discussion about a politically thorny issue to claim the meetings are caucus gatherings exempt from sunshine laws.

Similar arguments were advanced by the House in 1993 when then-Speaker Joe Clark called members into a closed session regarding Gov. Brereton Jones’s proposed health care reform, also a highly contentious matter.

House leaders escaped further legal action that year with claims that a quorum of its members didn’t show up for the private discussion.

Otherwise, the attorney general ruled, it would have constituted an illegal meeting.

While House leaders argued this summer’s secret session was a caucus meeting, they haven’t even attempted to claim lack of an attendance quorum.

The Lexington Herald-Leader reported that a quorum of members attended the meeting. Louisville Democratic Rep. Jim Wayne was the only lawmaker who publicly objected to the secrecy and walked out in protest.

The attorney general’s ruling that a quorum would have made the 1993 closed-door meeting – which the then-Democratic leaders of the House also claimed was one big happy caucus event – illegal should make the current case a legal slam dunk against even attempting such maneuvers.

Yet while the legal outcome is by no means certain, it will be fascinating to witness House attorneys attempt to portray a meeting of nearly the entire legislative body as just a political caucus meeting.

Doing so will, I anticipate, resemble an attempt to make the argument that if it looks, walks, swims and quacks like a duck, then it’s probably a cat.

Center for Open Government director Amye Bensenhaver hoped the House would simply accept and acknowledge it violated the open-meetings law instead of wasting taxpayer money by suing the Bluegrass Institute “to justify excluding the public from its meetings, which is precisely what the Open Meetings Act was designed to prevent.”

It’s telling that longtime legislators who now are House leaders are driving this doubled-down attempt to protect the body’s ability to meet behind closed doors.

Perhaps a reminder is needed that part of being a policymaker is doing the hard work of conducting open discussions about tough issues and then being accountable not just for the final vote tally but also for how those decisions are reached throughout the legislative sequence.

It’s also important for them to keep in mind that the legislature itself has imposed the same open-meetings law the House skirted on other public entities.

Getting this issue into a courtroom, argued and resolved would represent the kind of gain on behalf of citizens that would be worth the pain of the process.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at He can be reached at and @bipps on Twitter.

Bluegrass Beacon: Keep making the General Assembly great again

BluegrassBeaconLogoEditor’s note: The Bluegrass Beacon is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide. Following original release of this column, Gov. Matt Bevin announced he will not call a special session of the Kentucky General Assembly. 

WLEX weather anchor Bill Meck was no doubt the most interesting speaker at this year’s Kentucky Public Retirees’ Annual Conference in Frankfort.

Since I didn’t receive an invitation to this glorious affair, I’m not privy to what Meck, a storm chaser who once created “Danger From the Sky,” an award-winning documentary on severe weather, said that might relate his illustrious career forecasting weather patterns to the clashing of budget realities with promises – real and perceived – made to Kentucky’s public pensioners.

Perhaps Meck warned his audience that allowing distractions like deceptively calm weather prior to a tornado to cause a delay in taking cover from a fast-arriving storm is akin to ignoring or downplaying the seriousness of situations, whether they involve storms or diminishing public-retirement plans.

Opponents of proposals containing meaningful changes in the manner and level at which benefits are awarded by Kentucky’s retirement systems appear only too eager to allow distractions to result in more of the same kind of timid legislation passed in recent years and inaccurately labeled “substantive pension reform.”

Had such measures been sufficient, we wouldn’t find ourselves with a $65 billion-and-growing unfunded liability and retirement systems sliding toward the precipice of insolvency.

Nothing, including the ongoing sexual-harassment scandal, should waylay Frankfort from tackling this crisis.

In fact, failing to do so will only darken the black cloud hanging over the Capitol.

An unwillingness to create a fairer, properly prefunded and more sustainable retirement-benefits structure cannot in any sense be considered consequential progress.

We’ve seen too many fluffy proposals in recent history epitomizing little more than whistling Dixie past Kentucky’s economic graveyard as communities scrape for dollars to pay ballooning pension bills while still funding services citizens expect from local governments.

It’s substantially affecting taxpayers in places like Hopkins County, where in just the past few years, workers from outside Madisonville who work in the county seat were hit with an occupational tax while payroll taxes on employees in the city increased, property taxes rose by maximum-allowable rates and diners began forking over a supersized 3 percent restaurant tax.

Taxpayers across the commonwealth facing similar predicaments want such whistling to end.

But it doesn’t have to end with a forced special legislative session in December.

Successful special sessions require a ton of solid agreement among legislators before the opening gavel falls.

Excessive debate in such a session likely would cause it to either run too long or shut down without a decision, which would be an unmitigated political disaster for the GOP.

Gov. Bevin’s intentions are right in his desire to call the legislature back to Frankfort during the interim to address the pension predicament.

However, using his considerable leadership skills to make 2018 the most productive legislative session in Kentucky’s history would in no way diminish his standing.

For years, House Democratic leaders enabled by their party’s governor wasted time during regular gatherings of the legislature with frivolous bills, ensuring that General Assembly sessions – especially in earlier weeks – moved lethargically and avoided any real meaningful reforms in most policy areas.

Hitting the ground running on pension reform during the regular budget session in early January would allow for the quantity and quality of debate in a Republican-led House that creates room for fresh ideas, including a new paradigm for retirement systems protecting taxpayers, benefitting beneficiaries, offering real changes and garnering enough votes to pass.

Republicans’ greatest accomplishment during the 2017 General Assembly was their impressive focus, boldness and work ethic during the first week of the session.

The results added up to possibly the most-productive week in Kentucky’s 225-year legislative history.

For an encore, why not spend the first 30 days of the 2018 session fully debating and fixing the pension systems with politically successful legislation and the second half passing a tough, conservative budget, making it Kentucky’s most momentous legislative session in history?

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Reach him at and @bipps on Twitter.

News Release: AG supports Center for Open Government’s claim that House’s secret meeting violated Open Meetings Act

BIPPS Logo_pickCOG LOGOFor Immediate Release: November 6, 2017

(FRANKFORT, Ky.) — The Kentucky Office of the Attorney General in response to a complaint filed by the Bluegrass Institute Center for Open Government has ruled that the House of Representatives violated the Open Meetings Act when it met “with a quorum present” behind closed doors to discuss a consultant’s controversial recommendations for addressing the commonwealth’s public-pension crisis.

Former House Speaker Jeff Hoover argued in his response to the Center’s complaint that the gathering was not subject to the Open Meetings Act since it was held by the Majority Caucus but was also open to the Minority Caucus, and that both caucuses are exempt from the law.

Closed-caucus meetings are held in separate locations by the respective political parties’ legislators in the House and Senate during General Assembly sessions to choose leaders and plan the flow and strategy of legislation.

However, the Center for Open Government in its complaint noted the gathering was not a permissible closed-caucus meeting since a quorum of all House members were present.

“The presence of members of the minority party at a meeting of the Majority Caucus is factually antithetical to Speaker Hoover’s characterization of that meeting as a majority caucus meeting,” the complaint stated.

Center for Open Government Director Amye Bensenhaver praised the Attorney General’s office for its ruling.

“Our purpose in bringing this legal challenge was to ensure that House members were held to the same standard of accountability they have required of all other state and local agencies since the Open Meetings Law was passed,” Bensenhaver said. “The attorney general’s decision secures the public’s rights under the act and confirms that the act must be applied even-handedly to those at every level of government.”

The decision listed as 17-OMD-228 was written by Assistant Attorney General Matt James, who quotes from a previous decision involving similar complaints by noting the fact that state law differentiates between standing legislative committees and all other committees when it comes to open-meetings requirements.

In that decision, which involved a closed meeting by the House to consider health-care reform, the Attorney General’s office noted: “If the House of Representatives was, generally, excluded from the coverage of the Open Meetings act, then the law would not make a distinction as to what kinds of House Committees are excluded from the provisions of the Act.”

House leaders will have 30 days to appeal or discuss with the Bluegrass Institute Center for Open Government the following proposed remedies, including that the House leadership should:

• Acknowledge it violated the statute requiring the challenged meeting be open to the public.

• Release to the public any written record or audio or video recording of the closed meeting.

• Issue a resolution committing to future compliance with the requirements of the Open Meetings Act.
Hoover claims the meeting on Aug. 29 – the day following the release of PFM Consulting’s contentious recommendations calling for cutting retirees’ cost-of-living benefits and freezing benefits for current public workers and moving them into a 401(k)-style plan – allowed lawmakers to question the consultant and state budget Director John Chilton “without the media there and to make it a more comfortable setting for them to ask questions.”

“Comfort and convenience cannot be the determinants in whether transparency laws are followed,” Bluegrass Institute president and CEO Jim Waters said. “These laws exist to ensure that the formation of public policy – the discussion, debate and disagreement of proposed reforms – is just as much a part of the public’s business as the final vote tallies on bills.”

James also rejected Hoover’s claim that applying the Open Meetings Act to such gatherings “would violate separation of powers,” noting the legislature hasn’t exempted itself and has specifically directed the attorney general to issue decisions on these disputes.

Waters said the ruling rightly rejects claims the public can be denied access to this assembly involving an overwhelming quorum of the entire House of Representatives concerning the most significant threat to Kentucky’s future economic security and well-being “because this was just a big political caucus meeting.”

“To support such an approach would allow – perhaps even encourage – the entire House to close its doors to any meeting involving difficult discussions,” Waters said.

For more information, contact Amye Bensenhaver at or 502.330.1816 (cell).

Bluegrass Beacon: Pension plan cools, but freeze still needed

BluegrassBeaconLogoEditor’s note: The Bluegrass Beacon is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.  

While waiting this past summer for the release of a consulting group’s recommendations on addressing Kentucky’s worst-in-the-nation public-pension crisis, the question arose in this column: Will there be a pension freeze?

That previous column asserted: “the only way Kentucky will survive this fiscal storm is by freezing benefit-accrual rates for all members of every system, and resetting the pension plans” so that in the future “benefits are awarded based on their relationship with investment returns and payroll contributions rather than the warm, but deceptive, weather of political palatability.”

The answer has been delivered in the Bevin administration’s proposal: there’s not a freeze but things are cooling down a bit, but at the rate of a worn-out air conditioner in an old car on a blistering hot day.

Still, get up close and there could be some measure of relief, depending, of course, on what cuts from this latest pension proposal get left on the legislature’s floor.

The plan proposes ending the defined-benefits plan for all current and future legislators, putting them into a 401k-style plan, just as new employees in all plans will be offered beginning on July 1, 2018.

While Frankfort’s politicians have been falling all over themselves to make sure retirees know they won’t lose benefits already granted, they’ve also been acutely aware of the ongoing unpopularity of their own gold rush-like pension plan and agreed to take steps to claw back grossly lavish benefits handed out to retired lawmakers.

“Existing defined benefit members and current retirees will have their benefit calculation based on their legislative salary,” said the document handed out Wednesday.

Does this mean that former big-spending Democratic House budget chairman Harry Moberly will be forced to give up a substantial portion of his $154,912 public pension?

Let’s hope so.

Moberly’s pension was greatly padded thanks to legislation passed in 2005 allowing part-time lawmakers to apply their three highest years of salary in another plum government position to the retirement checks they draw on the legislative pension system.

If Moberly and other self-serving political retirees want to fight that claw-back provision in court, I’m getting my reservation in now for a front-row seat in a Frankfort courtroom.

I can hardly wait to hear them defend keeping their extravagant benefits, which are based on their own personal votes for bills creating such opulence.

Bring it on, Harry.

The new pension proposal also takes a small step toward getting the cost of health-care benefits under control by requiring all employees to contribute an additional 3 percent of their salaries toward retiree health care benefits.

However, a full blast of cool requires replacing one of the main elements of this plan, which still allows beneficiaries in the systems to “continue to accrue full unreduced retirement eligibility” until they reach 27 years of service.

But who in their right mind would agree to any pension plan that adds more unfunded liabilities to Kentucky’s worst-in-the-nation pension crisis, which has been pegged with being as deep as $85 billion in the hole?

This is where I barely feel any cold air.

At the very least, we must reset the system for current beneficiaries, recalibrating pension-benefit factors based on actuarially sound assumptions, not just what they were last year.

We’re facing the stark possibility that Frankfort will need to find an additional $2 billion in future budgets to effectively address the liability.

Where will this money come from?

Before taxpayers let Frankfort anywhere near our wallets and purses, there must be a breaking of the silence concerning how irresponsible retroactive benefit enhancements in the past and promises of future such enrichments have been a primary contributor to Kentucky’s unfunded pension liabilities.

By refusing to acknowledge that failure, the new proposal neglects to include safeguards to ensure Kentucky’s dark pension history doesn’t repeat itself.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at He can be reached at and @bipps on Twitter.

Bluegrass Beacon: Legislators boost, judge busts liberty

BluegrassBeaconLogoEditor’s note: The Bluegrass Beacon column is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.


This edition of “Liberty Boosters and Busters” is brought to you by reasonable Kentuckians who reject racism, bigotry and censorship with every fiber of their freedom-loving beings.

Liberty Booster: The attorney general’s office decided in favor of the Bluegrass Institute Center for Open Government in its appeal challenging a Jefferson County school board meeting at a private law firm on the 28th floor of an office building in downtown Louisville on a Sunday afternoon in April.

Assistant Attorney General James Herrick ruled the meeting – held to discuss applicants for the district’s then-vacant interim superintendent’s position – violated the law requiring public agencies to conduct meetings “at specified times and places convenient to the public.”

It’s also likely the building was locked that day as it was on a subsequent Sunday when some of my colleagues at the institute tried to enter – an experience Herrick referenced in his ruling.

Liberty Buster: U.S. District Judge Danny Reeves allowed Eric Conn, the eastern Kentucky lawyer who pleaded guilty to engineering one of history’s largest Social Security fraud campaigns, to remain free on home incarceration – despite warnings against doing so by an FBI agent and witnesses claiming Conn had crossed 140 borders in eight years and had vowed to run before going to jail.

Conn ran, and likely is now sipping martinis and hanging out on the beach of some country with women for whom he previously claimed to have provided “English lessons,” and with whom the U.S. has no extradition treaty.

Yet Reeves, the judge, forced Sam Girod, an Amish farmer from rural Bath County, to remain in jail for months without bond while awaiting trial before handing him a harsh six-year prison sentence for the “crime” of mislabeling homemade herbal skin salves containing such dangerous (sarcasm dripping here) ingredients as chickweed and peppermint and not acquiescing to the Food and Drug Administration’s ideological thuggery.

Prosecutors, gung-ho though they were to destroy this man and ridicule his way of life, failed to produce a single victim harmed by Girod’s concoctions.

Yet Reeves permitted Conn, a wealthy white-collar criminal whose fraud resulted in 1,500 people losing their benefits and at least one person committing suicide, to remain out of jail.

He also handed a weak six-month sentence to Charlie Andrus, a former chief regional Social Security judge who pleaded guilty to conspiring with Conn to retaliate against the whistleblower in the campaign defrauding the program of $550 million.

Reeves in an unrelated case allowed a former University of Kentucky employee who swindled the school out of $200,000 to avoid prison altogether with a sentence of probation, calling it “sufficient punishment.”

Yet farmer Girod, who’s harmed no one and had no criminal record when his nightmare began, languishes in a Pennsylvania prison more than 400 miles away from his home.

An appeals-court reversal or presidential pardon would go a long way toward highlighting the insufficiency of this judge’s contemptible inconsistency.

Liberty Boosters: Gov. Bevin and Frankfort’s Republican legislative leaders for planning to tackle pension and tax reforms separately.

Claims that tax reform is critical to generating revenue wrongly blame Kentucky’s public pension woes on insufficient support from taxpayers or poor returns on investments or, at the very least, station the cart before the horse.

The retirement systems’ funding levels continue to fall even though the commonwealth’s current budget poured an additional $1.2 billion into them.

Also, investment returns for the past 30 years have, on average, exceeded more than 9 percent in the Kentucky Retirement Systems and 8 percent in the Teachers’ Retirement Systems.

At the core of the pension crisis is a structural weakness rather than lack of dollars.

Stop the digging by fixing the systems’ benefit structures.

Then, looking for more dirt to fill the hole becomes an exercise in productivity rather than futility.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at He can be reached at and @bipps on Twitter.

Bluegrass Beacon — Change the culture of secrecy: Pledge transparency

BluegrassBeaconLogoA recent S&P Global Ratings survey declares that the commonwealth where Lincoln was born now has the nation’s worst pension crisis, a distinction previously held by neighboring Illinois, known as the Land of Lincoln.

The only ones who can ultimately apply the prescription needed to fix what S&P describes as a $31.2 billion shortfall will be the 138 members of the Kentucky General Assembly, which makes addressing the pension deficit the numero uno issue in the current political campaign.

Using S&P’s numbers, eliminating the pension deficit today would require $7,349 dollars from the piggy banks of every single one of the 4.3 million men, women and children in Kentucky.

Yet while it’s the greatest threat to Kentucky’s economic vitality and jeopardizes funding of every other government program – as well as casting doubt on the availability of future retirement benefits themselves – most Kentuckians don’t know much about the public-pension plans.

While current ongoing audits should reveal important information about how the Kentucky Employees’ Retirement System – the largest of those plans – arrived at the point of near-insolvency, which should lead to ideas about possible solutions, more of the commonwealth’s elected officials need a stronger level of commitment to transparency.

This government that Lincoln reminded is of, by and for the people cannot conduct its business behind a cloak of secrecy while entrenched in a culture that denies those very citizens access to information needed to hold their representatives accountable.

The consequences of creating such a culture includes quiet passage of several bills in recent decades allowing politicians to pad their costly pensions and ensure the healthiness of their own retirement system while revealing even less about personal benefits than state workers and teachers offer regarding the plans in which they are enrolled.

Some politicians have hypocritically called for even greater transparency from those other systems while failing to support more openness for their own system.

Unfortunately, too many of these calls have been about reaping political benefits from talking transparency rather than a rock-solid commitment to changing Frankfort’s culture of secrecy.

Fortunately, an increasing number of state legislators and a healthy segment of candidates running for office this year are demonstrating genuine support for changing that culture by signing the Bluegrass Institute’s pledge to support making the part-time politicians’ pension system transparent.

This narrowly focused 67-word statement vows support for allowing access to the “name, status and projected actual retirement benefits and benefit payments” of both current and retired legislators.

Knowing that transparency is not only sound policy but also politically popular, some incumbents agreed to sign the pledge when pressured by opposing candidates yet have failed to follow through.

For instance, Rep. Jeff Taylor, D-Hopkinsville, promised to sign when challenged by his Republican political opponent Walker Thomas – one of the 70 pledge-signers – but hasn’t done so.

However, the pledge is more than just about good politics or the right vote on specific bills.

It’s about making transparency Frankfort’s default position so that Kentucky’s tallest Goliaths – including its pension crisis – can be brought down.

House State Government Committee chairman Brent Yonts, D-Greenville, returned his unsigned pledge with a note claiming support for revealing current legislators’ benefits but not for “making a pledge of my vote to issues until I see the issue presented in a bill which I read.”

But the pledge isn’t just about a particular bill or voting a certain way. It’s about policymakers agreeing to lead in changing the current environment of state government from one of secrecy to openness and giving citizens a tool to hold them accountable.

If, as Scripture states, “the time is come that judgment must begin at the house of God,” then making decision-makers’ benefits available represents the first pull of Kentucky’s pension blinds, which have been closed for far too long.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at Read previously published columns at

Bluegrass Beacon: Teachers’ pensions and their sick-day pay

BluegrassBeaconLogoTeachers’ retirement-system bureaucrats who stand guard over the commonwealth’s unsustainable public pension gold mine would have us believe that retirement policies are too obscure and mysterious for taxpayers to grasp.

Rather, the real concern of these guardians of our public-pension system is that enough taxpayers will grasp the full extent of the generosity of these benefits and conclude: “we simply cannot afford such luscious benefits.”

Considering pension payments are determined in large part by salaries, such will likely be the response of many Louisville taxpayers in light of a recent survey released by the Jefferson County Public Schools (JCPS) showing its teachers are among the nation’s highest-paid instructors.

The JCPS salary schedule reveals that Rank One teachers with 25 years’ experience pulled in $81,887 during the 2015-16 school year, up from $80,256 in 2014-15 and $79,462 in 2013-14.

Teachers who want to use their three highest annual salaries in determining the size of their pension checks must be at least 55 years old and have taught for a minimum of 27 years.

Many teachers retire after 30 to 33 years in the classroom, allowing them to boost their pensions by including their three highest annual salaries as well as taking full advantage of a service-credit rating that increases after working for three decades.

While the salaries in JCPS are higher – much higher, in many cases – than those for teachers in other parts of the commonwealth, the salaries for Louisville’s teachers do reflect the type pay – and thus level of pensions – amassed by many administrators across the state.

Using the legislatively approved formula, a Rank One teacher in Louisville who retires after 33 years can expect an annual pension of $67,649, or $5,637 monthly.

I reached that retirement amount simply by multiplying the average of those three highest years of salary mentioned for JCPS’ Rank One teachers by the service credit that all Kentucky teachers get – 2.5 percent for the first 30 years and 3 percent for each additional year.

It adds up to an 84 percent service credit and a bountiful pension for a retiree who works for less than 190 days annually for 33 years, with the bounty coming from taxpayers, many of whom work many more days per year yet cannot even afford their own retirement plans, or certainly not benefits as rich as Kentucky Teachers’ Retirement System (KTRS) pensions.

Add in the value of unused sick days – which is not included in that $5,637 monthly check for the JCPS Rank One retiree I mentioned earlier – and teachers’ pension checks grow like Jack’s beanstalk.

State law allows teachers to embed 30 percent of the total value of all unused sick days throughout their career – a maximum of 10 days per year and 300 per career – into the formula determining their pensions.

Applying state law, the value of each sick day is determined by taking KTRS retirees’ final annual salary – $81,887 in the case of JCPS – and dividing it by 185 days, which in the case of Louisville’s veteran instructors equals $442.63. The law allows retirees to apply 30 percent of the total value of their unused sick days to determine their lifetime pensions.

If this veteran JCPS teacher accumulates 150 – or half – of the unused sick days allowed by law, she not only gets a check for $17,358 when she retires (30 percent of the value of those unused sick days minus 12.855 percent that goes into the KTRS), she also gets to apply that amount to her retirement in a way that expands the size of those pension checks for a lifetime.

In the end, our JCPS retiree’s annual pension will jump an additional $5,577 each year to more than $73,000 (not including a 1.5 percent annual cost-of-living increase) for the rest of her life just for – as the late Yogi Berra might have said – doing what she’s already paid to do.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Lowell D. Reese: A true Kentucky hero

Lowell D. Reese250px-FutureShockSquareThe Bluegrass Institute is saddened at the death of one of our commonwealth’s –   and country’s – fallen heroes.

Lowell D. Reese, a Kentucky native and founder of Kentucky Roll Call, a public-affairs publishing company in Frankfort, passed away on April 15.

Reese, who fought for his country as a battalion commander on the front lines in Vietnam, served the commonwealth passionately and faithfully — particularly in efforts to advance sound policies that would bring badly needed reforms, change the trajectory of Kentucky’s future and improve the lives of his fellow Kentuckians.

He helped spur efforts in recent years to shine the light on Kentucky’s public-pension system, taking particular aim at House Bill 299, which he labeled the “Pension Greed Act” because it lets legislators calculate their legislative pensions using their full-time salaries in another state or local government job rather than their part-time lawmaker salaries.

“This practice allows part-time legislators to convert their normal pension to super-sized pensions,” Reese wrote in Future Shock Solutions: 16 steps to treat Kentucky’s public pension ailment, the final in a series of Bluegrass Institute policy reports he authored on the state’s retirement plans.   

Reese often stated that the first and most-important of those steps was making the commonwealth’s retirement plans transparent, allowing taxpayers – especially retirees who depend on state-funded pensions for their livelihoods and economic security — access to information needed to hold Frankfort’s politicians accountable and achieve challenging reforms.

Reese in the Future Shock series of reports put the unfunded pension-liability crisis in perspective:

Kentucky’s public servants and retirees are increasingly and rightfully concerned about the security of their retirement livelihood. But towering above that, funding their pensions has become a societal issue.

The standard of living of all Kentuckians is at stake. How is that, you ask?

Human progress depends on economic progress, and economic progress depends on laws that favor it — and on education. Two-thirds of the state’s budget, the General Fund, goes to education. When public employee pensions compete with other government programs for funding, pensions will come first.

Following the minor pension-policy changes enacted in 2013 by the Kentucky General Assembly, Reese pointedly chastised the legislature for failing to address “benefit creep.” He called tackling the expenditures in the system “the other third rail in politics,” in part “because it would draw attention to the legislators’ role in creating the crisis.”

His prophetic analysis of the impact that the public-pension crisis was having on the entire economic vitality of the commonwealth in a Courier-Journal op-ed in January 2014 rings just as true – perhaps even truer – in April 2016 with recent passage of a budget that cuts higher-education funding in order to increase payments to the retirement systems but does nothing to address the plans’ expenditures:

Pensions are dipping into the budget of the commonwealth as never before. Pensions are crowding out education. They are crowding out infrastructure. They are crowding out programs that affect the lives of all Kentuckians.

Lowell Reese was a man who served his country in the fight against communism in Vietnam and his commonwealth in a campaign to address the most challenging issues of our day. He is a true Kentucky hero.

The Bluegrass Institute sends our deepest condolences to his wife, Carol, and the entire Reese family.

A celebration of life gathering will be held at a future date.

Bluegrass Beacon – Teachers and their pensions: Doing the math

BluegrassBeaconLogoLots of retired teachers bared their angry fists at me following my recent column about the soon-to-retire public school administrator who will, if he fulfills life expectancy, collect pension checks for longer than he worked, enjoy annual cost-of-living increases and amass a KTRS-funded $5.6 million fortune by retiring at 49 years of age after working 27 years.

“Please be accurate rather than (highlight) one exceptional pensioner!” one retired emailer scolded.

However, it behooves all of my retired-teacher friends to remember: the same shrinking KTRS kitty that’s billions upside down yet which they depend upon for their own pensions is the very same plan struggling to fork over the money for that administrator’s lavish benefits.

Yet while highly paid superintendents and principals have both hands in Kentucky’s pension pot, some basic mathematics reveals that many retired teachers overdo it with claims of humble pensions.

According to Daviess County Public Schools’ published certified salary schedules for the past three years:

  • Rank 1 teachers with at least 21 years of experience earned gross salaries of $62,364, $62,988 and $64,248, respectively, during the three most recent years – presumably their three highest annual salaries – for a total of $189,600 and an average of $63,200.
  • Daviess County teachers who spend 33 years in the classroom and retire in their mid-fifties with those three highest years of salary will, according to the KTRS website’s own “Benefit Estimator,” receive a total service credit – a complicated part of the pension formula used to determine retirees’ benefits – of 84 percent. (The total service credit is established through multiplying the first 30 years by a 2.5 percent per-year service credit and the final three years by an enhanced annual 3-percent credit and combining those totals.)
  • The average salary of $63,200 multiplied by the 84 percent service credit results in a $53,088 gross annual – or $4,424 monthly – pension check.

Sounds reasonable so far, right?

Let the unreasonableness begin:

  • According to KRS 161.155, 33-year employees are allowed 10 sick days a year and can count up to 300 unused ones toward their annual salaries used to determine their retirements.
  • State law requires that 30 percent of the total amount of the average daily salary of these 300 days be incorporated to decide a retiring teacher’s final annual salary. KRS 161.623 dictates this be done by dividing the teacher’s salary in the final year he or she worked “by one hundred eighty-five (185) days.”
  • The final year’s salary in Daviess County of $64,248 divided by 185 days reveals per-day pay of $347.29. Teachers who accumulate half – or 150 – of those days at the end of their career boost their pensions by $15,628, giving them annual retirement payments of $68,409, or $5,701 monthly.
  • None of this even includes the annual cost-of-living increases (COLAs) and rich, but nearly free, health-care benefits KTRS recipients receive.
  • “But we don’t get Social Security,” I can hear even now as fists shake faster and angrier. True. I will have some thoughts in a future column on how to remedy that policy in favor of KTRS and the taxpayers.

This brief mathematical study shows that Daviess County teachers who save even half of their sick days will receive more in gross pension benefits during their first year of retirement than in the final year they worked.

If they fulfill their life expectancy, they will amass more than $2.1 million in taxpayer-backed retirement bucks – plus tens of thousands of additional dollars in the form of health-insurance benefits and COLAs for a lifetime. (Those benefits are not even included in the above numbers.)

The burden of a system allowing teachers – or any public worker, for that matter – to retire in their mid-fifties and collect hefty public-pension, health care and cost-of-living checks is funded by taxpayers struggling to make ends meet in their own homes, and who, if they even have a retirement plan, are largely funding it themselves.

Plus, they’re certainly working more than 185 days a year.

Who should be angry here?

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Bluegrass Beacon: Pension Grinch likely to pilfer more from taxpayers

BluegrassBeaconLogoThe more we hear from experts on Kentucky’s pension crisis, the clearer it becomes: no Black-Friday-type-of-deal exists to bail out the state’s retirement systems, which face a nearly $40 billion unfunded liability.

But Santa made an early visit this year to Kentucky Retirement Systems’ executive director Bill Thielen, whose board paid $38,500 to a Colorado search firm to find a replacement for Thielen, who previously announced he would retire at the end of 2015.

Not only were none – none – of the 20 applicants interviewed, the board decided in October to offer Thielen a contract extension, keeping him on the job until June 30, 2018, and hiking his salary by more than $43,000 a year.

There’s more irony in this situation than snow at the North Pole.

Thielen gets a 25-percent raise to lead a system that includes the Kentucky Employees Retirement System, which has only 17 percent of the funding needed to meet its future obligations to pensioners.

Thielen’s mammoth pay hike also stands in stark contrast to state workers who received a 1-percent raise this year.

Despite the fact that KERS is drowning to the point that it’s now cashing out investments to pay its pensioners, Thielen gets an extra present – a big increase in his own pension.

Kentucky Roll Call’s Lowell Reese estimates that considering Thielen’s age, life expectancy and long tenure in government, the KRS board not only gave Thielen a hefty raise, it essentially awarded him a quarter-million dollar bonus over his lifetime by spiking his pension.

So basically, he’ll get an additional $250,000 for two and a half years of work. Not a bad gig, if you can land it, or – as in Thielen’s case – hold onto it.

Along with that “bonus,” Reese notes that Thielen’s a double-dipper who’s cashing an estimated $66,000 pension check each year from his previous position with the Kentucky League of Cities and will get a projected $49,155 annual pension from his KRS tenure.

It all adds up to $115,000 a year in taxpayer-funded pension payments to the man who leads a secretive operation and who’s made little effort to bring accountability to a system now so out-of-control that it won’t be long before you will hear talk of a tax increase the size of which will dwarf the jolliest Santa or the positive hopes many have for the incoming Bevin administration.

More than $20 billion is needed just to raise all state retirement plans to the 80-percent funding level actuaries claim is healthy.

“Where are you going to get that kind of money?” Reese asks. “You can’t even borrow that. To really fix the problem, it’s going to take a mammoth tax increase unless they come up with a magic plan.”

Representatives of both the state workers’ and teachers’ plans have said they cannot invest their way out of the crisis.

What about growing our way out of it?

The Lexington Herald-Leader’s John Cheves reported during the recent gubernatorial campaign that the additional $579 million in tax revenue that Frankfort is forecast to receive through 2018 “is already more than spoken for.”

How can Kentucky’s economy grow big – and fast – enough to bring in sufficient revenue to rescue our pension system when there already are so many hands out clamoring for more funding that the surplus revenue will disappear faster than the Freedom From Religion Foundation can say “Merry Christmas?”

“Public pensions for state workers and school teachers might need a stepped-up $2 billion just to stay afloat,” Cheves reported. “And Kentucky will have to begin paying its share of expanded Medicaid, starting with an estimated $247 million.”

Taxpayers should dare Speaker Greg Stumbo or his fellow dinosaur-ic Democrats who still control the Kentucky House to talk taxes and new programs while at the same time opposing Bevin’s plan to shine the bright light of transparency on pension spending and investment practices along with implementing business-friendly policies like right-to-work and real tax reform to attract job creators who could provide at least some of that needed magic.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at