Journal-Times (Grayson, KY)


February 6, 2013

Public pensions now our ‘sword of Damocles’

Feb. 6, 2013 —     In Greek mythology, the “sword of Damocles” represents an impending disaster. It never goes away, constantly waiting to happen.

    That analogy describes the pressure that is mounting for members of the General Assembly to deal with the state’s public pension crisis in the current legislative session.

    The latest weight added to the flimsy string holding the legendary “sword” was put there last Thursday when Standard & Poor’s Ratings Services announced a downgrading of the state’s fiscal outlook because of unfunded pension liabilities, now estimated at $30 billion.

    S&P revealed the revision from stable to negative and then confirmed its existing AA-minus credit rating for the state’s bonds.

    To no one’s surprise, the S&P experts said the two negative responses reflected the financial community’s concern over the decline of pension funding levels and the likelihood that the decline would continue.

    And, to make sure that no one misunderstood, the credit analyst from S&P pointed out that the state had consistently underfunded its post-retirement pension liabilities and likely doesn’t have the means to start fixing the problem.

    The financial “fix” requires a commitment of at least $327 million in the next state budget starting July 1, 2014.  

    However, the first part of the “fix” should happen this year, lawmakers were told by a coalition of 50 of the state’s most powerful business groups, including the Kentucky Chamber of Commerce and the National Federation of Independent Businesses.

    The retirement system for state employees has an unfunded liability of about $18 billion. Another $12 billion exists in the other pension plans for teachers, city and county employees and state police.

    The problem was created by a combination of lower-than-expected returns on investments and the General Assembly’s failure to fund all of the state’s contributions each year.

    A pension reform task force has recommended changes in how the retirement systems operate, including an end to automatic cost-of-living adjustment for current and future retirees.

    The task force said new public employees should go into a plan more like a 401-K or other private pension approach.

    Another group calling itself the Kentucky Public Pension Coalition and representing 19 employee and retiree organizations says persons most affected by changes in public pensions have not been sufficiently consulted on possible solutions.

    In our view, the General Assembly should make necessary statutory changes this year to keep the problem from getting worse.

    That would leave nearly a full year to find the money needed to start balancing the books and restoring the state’s credit rating.

Text Only
  • Five years and counting on Saturday mail

    It was five years ago when that marvel of fiscal management, the U. S. Postal Service (USPS), announced it would end Saturday mail delivery within six months.

    July 23, 2014

  • Yes, girls can become scientists, engineers

    We applaud the television commercials sponsored by Verizon which gently but effectively rebuke those among us who discourage girls and young women from careers in science, technology and mathematics.

    July 16, 2014

  • High court right on mobile phone ruling

    We don’t always agree with the rulings of the U. S. Supreme Court which is often divided with multiple opinions. But, for the moment, we feel better about the high court because of its recent ruling on searching mobile phones.

    July 9, 2014

  • Would we pay the same high price today?

    As we Americans take a day off from work on Friday to mark the 238th birthday of our country, can we find a few moments to reflect on those who made it happen?

    July 2, 2014

  • Trading Saturday mail for roads is a hoax

    Just when we thought all of the idiotic ideas had emerged from the current Congress, along came another doozy. A Republican leader in the U.S. House of Representatives proposed that Saturday mail delivery be ended and the resulting savings be used to fix roads and bridges across America.

    June 25, 2014

  • Is history repeating itself in Iraq?

    If last week’s news from Iraq left you with a sense of déjà vu, you are not alone. “Déjà vu” is defined as “disagreeable familiarity or sameness” and that certainly fits what appears to be the emergence of another Islamic militant group which took control of two major cities in Iraq.

    June 18, 2014

  • Technology bringing closure to MIA families

    After 58 years in an unmarked grave in a military cemetery in Hawaii, a Kentucky soldier came home last Saturday to his family and a final resting place in his native soil.

    June 11, 2014

  • New state veterans leader a great choice

    Some may criticize Gov. Steve Beshear for appointing former Miss America Heather French Henry as commissioner of Kentucky's Department of Veterans Affairs.

    June 4, 2014

  • As is, Rupp Arena project not worth saving

    When the General Assembly decided last month not to allow state bonds to be used to help fund the Rupp Arena renovation, we said it was unfair because Louisville got state money for the KFC Yum Center four years earlier.

    May 28, 2014

  • Cockfighting is more than animal cruelty

    A recent political issue arose over the visit to a cockfight by U. S. Senate candidate Matt Bevin. The resulting publicity brought cockfighting, which is illegal in Kentucky, back into the public eye.

    May 14, 2014