, Corbin, KY

State News

February 22, 2013

Pension bill in committee’s hands

CORBIN — By Ronnie Ellis

CNHI News Service

A bill to address Kentucky’s growing unfunded liabilities in its pension systems is now in the hands of the House State Government Committee, but its fate remains unknown.

The bill, sponsored by Sen. Damon Thayer, R-Georgetown, and passed by the Republican-controlled Senate is based on recommendations of a task force co-chaired Thayer and former Rep. Mike Cherry.

Those recommendations are to retain current benefits for existing employees and retirees but move new employees into a hybrid, cash-balance plan, end cost of living adjustments and fully fund the annually required contribution to the funds.

Though economic and stock market trends affected the health of the funds, a major problem has been the legislature’s decision in previous years not to make that full payment.

But Thayer’s bill only says it is “the intent” of the legislature to fully fund the ARC beginning next year. It does not specify where that money will come from.

Democratic Gov. Steve Beshear and House Speaker Greg Stumbo, D-Prestonsburg, have said they want to know how to pay for the ARC before passing the Senate bill.

As Thursday’s committee meeting began, Chairman Rep. Brent Yonts, D-Greenville, said a committee substitute to Thayer’s bill is being drafted and will be sent to legislative staff for “scoring,” indicating the substitute will include some funding method.

Stumbo has said Democrats have discussed a variety of options, from increasing the cigarette tax to perhaps using state proceeds from historical wagering if a legal challenge to that form of gambling fails.

Thayer told the committee it is important to pass the framework of reform now and determine funding sources next year when the General Assembly meets for its biennial budget session.

The estimated cost of fully funding the ARC in the first year of next year’s budget is around $327 million but some of that comes from non-general fund sources and the legislature is currently paying a portion of the ARC which will also be available next year.

Thayer said that means about $120 to $130 million in new general fund dollars will be needed for the ARC and he contends that can easily be handled by projected revenue growth of $370 million or more.

Beshear and his budget office, however, have told lawmakers that any growth in revenues is already accounted for, either to replace one-time, stop gap funding measures in the current budget, money which won’t be there next year, or to cover growth in Medicaid and state employee health costs.

Rep. Brad Montell, R-Shelbyville, said the legislature should act now and resolve the funding issue next year as Thayer suggests.

He noted that some, including the governor and speaker, have suggested a special session to take up tax reform (to generate more state revenues) and pension reform in tandem.

But Montell said tax reform is controversial and combining the two “runs the risk of this blowing up.”

The meeting concluded without action as members raced to make chamber sessions about to convene in the Capitol Building.

Yonts would only say the committee substitute was being drafted and would be discussed at a future committee meeting.

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

Text Only
State News
  • Healthcare signup in state extended

    While the national health exchange established by the Affordable Care Act — known to some as Obamacare — suffered glitches, crashes and delays, the Kentucky-run exchange, Kynect, was often used as a national model.

    April 4, 2014

  • Kentucky budget passed with little debate

    The Kentucky General Assembly, divided between chambers along party lines, overwhelmingly passed a $20-billion, new two-year budget not only on time but with almost no debate.

    April 1, 2014

  • Lawmakers agree on snow bill

    Kentucky school officials, parents and students finally have what they’ve been asking for: A bill to allow them to get out of school before the summer fully sets in, even if they don’t make up some of the days they missed during the severe winter.

    March 31, 2014

  • Tensions rise during budget negotiations

    Tensions increased Friday between the Republican Senate and Democratic House over continuing negotiations on a new, two-year budget. It even got personal at times.

    March 31, 2014

  • Kentucky Power plan a potential landscape-changer

    Electrical ratepayers, local governments and those employed in the coal industry might have a hard time understanding the complicated transaction through which Kentucky Power Company is purchasing half the generating capacity of a coal-fired West Virginia plant.

    March 28, 2014 2 Stories

  • Senate passes budget with no locked-in gas tax hikes

    The state Senate on Tuesday passed its version of a two-year revenue measure, and unlike the House version, it does not lock in gas tax increases.

    March 26, 2014

  • House passes bill aimed at saving Big Sandy Plant

    Backers of a bill to require the Kentucky Public Service Commission to “reconsider” its previous order approving Kentucky Power’s purchase of a West Virginia generator say all they are asking “is for them to take a second look and look at all the facts.”

    March 26, 2014 1 Story

  • Judge: Companies can’t use eminent domain for pipeline project

    Franklin Circuit Judge Phillip Shepherd on Tuesday ruled that companies building a natural gas liquids pipeline across parts of Kentucky cannot invoke eminent domain to force private property owners to provide easements.

    March 26, 2014

  • Still no snow day solution from lawmakers

    Senate and House negotiators, working on a bill to give school districts flexibility in making up snow days, each accused the other of moving the goal posts – but it’s the local school districts who may be penalized.

    March 25, 2014

  • Senate sets budget with ‘wiggle room’

    It was no surprise the Republican-controlled Kentucky state Senate altered the $20 billion, two-year state budget approved by the Democratic-controlled House, but there may have been a few who were surprised by how little it was changed.

    March 25, 2014