, Corbin, KY

State News

December 21, 2012

Beshear: Pension reform must be tackled


FRANKFORT Gov. Steve Beshear said Thursday that pension reform and the money to finance it and other government services are issues that need to be resolved this year, even if doing so requires a special session.

“My preference obviously would be to address them in the regular session,” Beshear told reporters gathered in his office for an end-of- the-year interview. “But if we can’t, I do think that these are important enough issues that we need to resolve them this year. Let’s don’t kick the can down the road anymore.”

Kentucky’s employee pension funds have a collective unfunded liability of about $30 billion and the state has cut state spending by $1.6 billion over the past five years.

Beshear said he’s ready to tackle the pension problem now because “the longer we wait, the tougher it’ll be to solve it and the worse the problem will be.”

A pension task force has recommended fully funding the pension systems beginning with about $327 million in the next budget while a Blue Ribbon Tax Reform Commission appointed by Beshear and led by Lt. Gov. Jerry Abramson has recommended 54 changes to the tax code that would produce about $690 million in new, annual revenue.

The governor said he agrees the full payment to the pension system is “what we need to do, but, the big question is, where do we get the money?”

Doing so doesn’t mean automatically adopting the recommendations of the tax reform commission, according to the governor.

“I haven’t drawn any conclusions from the report yet,” Beshear said. “After I do, my next job is to sit down with the legislative leadership and look at those recommendations and see where there might be some agreement.”

But as Beshear acknowledged, getting lawmakers to make changes to tax laws which produce more money isn’t easy at any time, and the 2013 General Assembly session is a “short-session,” a non-budget session which requires a 60 percent majority of both chambers to pass any tax measures.

“It’s always difficult to do anything on taxes, so it might be a reach to get a super majority in each house on that issue,” Beshear said. While he prefers tackling the issue in the regular session, he said it might be necessary to call a special session later to act on tax reform or pension reform or both.

By whichever means, Beshear said it’s time to tackle both issues, noting he’s cut the budget to the tune of $1.6 billion in five years and more is needed for education, health care and school safety.

While the base amount for school operations hasn’t been cut, increasing enrollments mean that funding is spread among more students.

State funding for school safety has been cut around 60 percent during those five years of budget cuts and in light of the school shooting at Newtown, Conn., last week, Beshear said “additional funding may be needed.”

While reluctant to take any specific position on limits on gun ownership (Kentucky is near the top of the nation in per capita gun sales), Beshear said, “It is time to have a national discussion on all the options, all the ideas on how we can make particularly our children more safe.”

He said the issue is better addressed with national policy to produce consistency among all the states. But he wants to see if Kentucky can do more in the area of mental health to “identify these troubled folks before they get to the point of causing a tragedy like occurred in Connecticut.”

The governor said he still wants an expanded gambling amendment saying, “It is always a priority of mine.” Gambling legislation has failed multiple times in the legislature since Beshear was first elected in 2007.

Beshear said new Senate leadership might make it easier to pass an amendment. Sen. Damon Thayer, R-Georgetown, who supports expanded gambling is the new majority leader and Sen. Robert Stivers, R-Manchester, will succeed gambling opponent David Williams as Senate president. Williams resigned to accept a judicial appointment offered by Beshear.

But it’s not a lock, Beshear said. A constitutional amendment requires 23 votes in the Senate and 60 in the House, never an easy thing to do. But he said he is already talking to individual lawmakers about an amendment, but hasn’t made any decision on how to proceed.

He’d also like to see another legislative initiative – a high school dropout bill that would increase the age to 18 before a student could leave school – finally succeed in the 2013 session.

Beshear began the interview talking about the accomplishments of the past year, touting job creation, passage of a bill to crack down on prescription pain pill abuse, and improving national rankings for Kentucky schools and education.

He said the state has moved closer to construction of major interstate bridge projects in Louisville and northern Kentucky and his administration moved quickly to re-open the Sherman Minton Bridge in Louisville after defects were discovered and the Eggers Ferry Bridge in western Kentucky after it was damaged by a barge collision.

He declined to comment on the absence of a recommendation by a task force on the state’s alcohol laws about allowing liquor sales in groceries as it already is allowed in drug stores.

“That’s in the courts right now, and I want to wait and see what the courts say,” Beshear said.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at Follow CNHI News Service stories on Twitter at

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