March 21, 2013 — FRANKFORT Gov. Steve Beshear, the Democratic House and Republican Senate apparently are no closer to agreement on how to fund changes to the state pension system, a key difference on perhaps the most important issue still facing the 2013 General Assembly.
Beshear sidestepped the question Wednesday when he was asked by a reporter if the Senate had offered a way to pay for proposed changes to the underfunded state employee pension system.
“What I can say to you is the Senate and the House and I are discussing both pension reform and possible options for funding it,” Beshear answered.
But Senate President Robert Stivers, R-Manchester, later said there has been no funding proposal offered by the Senate.
“The Governor has discussed a menu of items with us but there has been no proposal presented by the Senate.”
Kentucky’s employee pension systems are badly underfunded and Moody’s recently downgraded the state’s credit ratings until it shores up those systems. The Republican Senate passed a package of reforms based on recommendations of a task force which would move new employees into a hybrid, cash-balance plan but maintain current defined benefits for existing employees and retirees.
The bill states the General Assembly’s “intent” to begin fully funding the system — but it provides no defined source of revenues to do that.
The House rewrote the bill to maintain defined benefits even for new employees and passed a companion bill which calls for using revenues from expanded lottery games and instant racing to pay for the annual contributions. But the Senate refused to consider either bill.
House Speaker Greg Stumbo, D-Prestonsburg, and Beshear want a specified funding source for pension reform.
But Stivers and majority floor leader Damon Thayer, R-Georgetown, who sponsored the Senate pension bill and co-chaired the pension task force, have repeatedly said they want to fund the pension contributions within the current budget and projected revenue growth.