Unanimous!

In a 7-0 decision, the Kentucky Supreme Court today struck down the “sewer pension bill” passed at the urging of embattled Governor Matt Bevin during the last legislative session.

The plan, which broke the promise made to current and retired teachers and other public employees, was found to be in violation of procedure demanding adequate public notice and a specific number of readings before a vote.

Adam Beam from the AP has more:

The Kentucky Supreme Court on Thursday struck down a law that made changes to the state’s struggling public pension system eight months after it prompted thousands of teachers to protest, closing schools across the state.

In April, Republican Gov. Matt Bevin signed a law that moved all new teacher hires into a hybrid pension plan. The law also restricted how teachers used sick days to calculate their retirement benefits and changed how the state pays off its pension debt.

Facing a tight deadline, state lawmakers introduced and passed the bill in one day near the end of the 2018 legislative session. The bill moved so quickly that a copy was not available for the public to read until the day after lawmakers had voted on it.

Teachers were outraged, thousands marched on the Capitol and schools in more than 30 districts closed. Democratic Attorney General Andy Beshear sued, arguing the legislature violated the state Constitution by not voting on the proposal three times over three separate days. Bevin argued lawmakers did not need to do that because they had substituted the bill for an unrelated one that already had the required votes.

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Bevin Bashes Teachers

Kentucky Governor Matt Bevin is again bashing teachers and the largest association representing them, the KEA, instead of taking responsibility for his own failures as Governor.

Here’s more from the Courier-Journal:

Bevin said on WKCT Radio, of Bowling Green, that his budget proposals have fully funded Kentucky’s pension systems but that his efforts to save the pensions have been muddled by the teachers’ union.

And a response from KEA:

“It’s true that the last two state budgets approved by the legislature funded the pension system.  But remember, the Governor vetoed the 2018-2020 budget, which included the pension funding appropriations for which he’s now taking credit. The provisions of his ironically titled “Keeping the Promise” proposal from last fall and SB1(2018) speak for themselves; KEA didn’t create those documents, the Governor and legislators sympathetic to his cause did. Those proposals created the “discord” to which he refers.  All state employees, including educators, are also taxpayers.  Every participant in any of Kentucky’s public pension systems pays twice: once as a direct, personal mandatory contribution to their individual account and again as a taxpayer …  So yes, KEA and other advocacy groups believe state employees and public school educator voices should be heard on policy issues that will affect the pension benefits they earn and pay for.”

The fact that Kentucky teachers and other public employees consistently pay into a system as both employees and taxpayers seems lost on Bevin. That those who pay into the system and are promised a return would want to have a say in any changes clearly is an affront to the paternalistic Bevin who seems to want to say, “Don’t worry, I’ll manage it… ”

Fortunately, educators and others are speaking up and speaking out. Most everyone agrees the pension system needs an element of reform — and that reform should be carried out in a transparent manner that is fair to all parties to the system.

MORE on the pension situation.

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Charters, Pensions, and Funding

Those are the Big 3 issues identified by Commissioner Terry Holliday for the 2015 legislative session.

Holliday outlined his thoughts on the 2015 session in a December post on his blog.

He notes that if charters are adopted at all, it will likely be a small pilot program that would allow for a handful of charters in districts with especially troubling achievement gaps (likely JCPS).

The Prichard Committee has been reviewing the research on charters and will likely weigh-in at some point, too.

Teacher pension reform has been and will continue to be a hot legislative topic.

Essentially, the Kentucky General Assembly balanced the state budget for years in part by under-funding the Kentucky Teacher Retirement System.

Now, their negligence has caught up with them and teachers may see benefit changes or reductions in future payments by way of adjusted (down) cost-0f-living increases.

Holliday also says that while the session is not a budget session, some funding issues may surface.

Another potential topic of interest is allowing school systems to merge in order to maximize financial efficiency.

Tune in this session for more on the big education issues facing Kentucky policymakers.

For more on education policy and politics in Kentucky, follow @KYEdReport

 

Pension Reform in 2015?

Kentucky legislators will consider a number of plans designed to reform the state’s pension plan for teachers, the Courier-Journal reports.

The Kentucky General Assembly has been tinkering with the pension plan in recent years in an attempt to shore up unfunded liabilities.

Proposals this year would seek to adjust future benefit payments and decrease cost-of-living increases.

The shortfall is a result of lack of proper funding over time by the General Assembly.

Some proposals would continue the practice of using borrowing through bonds to fund pension obligations, but it is likely that changes to benefits will also be required.

According to the report, a number of lawmakers oppose additional bonds to fund the system and are looking at more significant reform.

From the story:

So far, legislators have pre-filed at least four bills that would alter some aspect of teacher pensions, and leaders from both the House and Senate say any bonding needs to be paired with reforms.

“There is not a lot of enthusiasm for borrowing more money to pay off the KTRS debt without structural changes accompanying that effort,” said Senate Majority Leader Damon Thayer, R-Georgetown.

 

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Jeff Hoover on Teacher Pensions

House Republican Floor Leader Jeff Hoover attempts to use teacher pension reform as an argument in favor of electing a GOP majority to the Kentucky House.

In an article for the Courier-Journal, he points out:

The Comprehensive Annual Financial Report issued by KTRS this past December shows the system had approximately 75,000 active and 47,000 retired members. The report states the funding level this past year was 51.9 percent, with $13.85 billion in unfunded liabilities. According to data released by the Kentucky Chamber of Commerce this past week, a key reason for this underfunding is actual employer contributions to the system have been significantly less than the amount required to sustain financial obligations.

Hoover is right to note that the teacher pension system may soon face problems. Not being able to pay benefits promised and owed would be devastating.

And, in his article, he’s simply calling for the creation of a task force to examine the issue and make recommendations.

That, too, seems reasonable.

Fixing the pension problem won’t be easy and it will take political courage.

But, let’s be clear: Teachers are not the ones who failed to properly fund the pension system for years and years. Teachers did not make promises they couldn’t meet. Teachers should not bear the brunt of any proposed pension reform. The budget in Kentucky should not be balanced on the backs of Kentucky’s teachers.

Comprehensive reform that ensures the teacher pension fund is able to meet future obligations must include proper funding of those obligations. That will mean that new revenue must go to the fund OR that other programs are cut to make room in the budget for teacher pensions.

Kentucky made a promise to its teachers. Kentucky’s political leadership should keep that promise.

For more on Kentucky education politics and policy, follow @KYEdReport