Bluegrass Beacon: Dodging pension crisis won’t fix it

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

Opponents of reforming Kentucky’s public pension system and addressing its $60 billion worth of liabilities are attacking the process by which pension-reform legislation was passed during this year’s General Assembly.

Franklin Circuit Judge Phillip Shepherd became their ally by striking down Senate Bill 151 (SB 151) because of the manner in which the bill was passed.

Shepherd’s bias notwithstanding – he recently “liked” a Facebook announcement publicizing an event by protesters in denial over the pension crisis – passing SB 151 as a substitute for a sewage-and-wastewater bill is, shall we say, putrid.

The GOP genius who proposed such a malodorous idea apparently doesn’t have a clue about optics or an ounce of understanding regarding how political opponents exploit such schemes.

Still, the unseemliness of the process offers a convenient cover for opponents who want nothing to change regarding how retirement benefits are determined and paid. Like Judge Brett Kavanaugh’s Supreme Court nomination hearings for his opponents weren’t about reaching the truth, so anti-reformers’ opposition to SB 151 don’t reflect a sincere desire to fix our broken pension system. Rather, it’s simply a convenient scenario for obstructionists opposing change, defending the status quo while weaving a narrative that conservatives don’t care about teachers, schools or public education in general.

This observation was confirmed while watching progressives rail against SB 151 during the House floor debate this spring during which they attacked reasonable education reforms, including school choice and objective accountability measures even though the bill included nothing about these issues. It’s also a delay tactic.

Senate Bill 1 (SB 1), very similar to SB 151 and not a substitute bill, was introduced as original pension legislation around the midway point of this year’s legislative session, offering plenty of time for debate and the necessary number of readings.

SB 1 made it through the entire committee process and was scheduled for a vote on March 9. However, it was sent back to committee as a result of anti-reformers showing up at committee hearings shouting “tax the rich” – their sophisticated and well-thought-out solution to Kentucky’s pension crisis and its future growth.

Just like progressives hope to win back Congress, which would allow them to shield their radical political causes by preventing a conservative like Kavanaugh from being appointed to the high court – though, thankfully, their efforts failed – so Kentucky progressives want to protect the current failed pension system at all costs. They’re counting on voters making emotional rather than rational decisions, which could return Kentucky to the days of frittering around the edges of pension reform but doing nothing to remove the threat posed by retirement-system liabilities to our commonwealth’s entire economy.

No matter how arbitrarily high and unaffordable past benefits have been, opponents of reform continue to delude themselves and, unfortunately, too many unwary citizens and even legislators into believing benefit levels can always be increased but never lowered.

Otherwise, they claim, Kentucky isn’t keeping promises made to public workers and retirees.

Y et while there’s severe disagreement about what has – or at least should have – been promised, there ought to be widespread concurrence that creating a new, portable, stable and secure cash-balance system for teachers similar to the plan state workers already have and which was included in both Senate bills is an urgent necessity.

Since the plan was to take effect when the calendar flips to 2019, perhaps a good use of time between the election and next legislative session – provided the state Supreme Court doesn’t overturn Shepherd’s decision in the meantime – would be for Gov. Matt Bevin to call a special session dealing with the crumbling pension pyramids. Lawmakers could pass a clean, original reform bill that helps new teachers, 

protects taxpayers and takes a big step toward ending the current disastrous and declining system.

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