Judge rules Kentucky pension plan unconstitutional
LOUISVILLE, Ky. (WDRB) – A wastewater bill that Republican lawmakers changed in a bid to overhaul Kentucky's public pension system is unconstitutional and can't be enforced, a judge ruled Wednesday.
Franklin Circuit Judge Phillip J. Shepherd struck down the law in an opinion that called the General Assembly's actions a "legislative slight-of-hand" that failed get three readings on three different days and receive a majority of votes in the Kentucky House, a requirement for spending measures.
After the original 11-page Senate Bill 151, a sewage measure, was transformed into a 291-page benefits bill, it received just one reading in the House and none in the Senate. Republicans introduced and passed the changes in a single day, catching Democrats and public employees off guard.
The three-readings requirement is "designed to provide public notice of the contents of the legislation, the most fundamental requirement of any legislative process based on the consent of the governing," Shepherd wrote in his opinion.
Gov. Matt Bevin plans to appeal the ruling, which a spokeswoman for the governor said sets a precedent that could nullify bills from prior years and fails to address the "inviolable contract" with state workers.
"The consequences of this ruling are tremendous for Kentucky because hundreds, if not thousands, of bills have previously been passed by the General Assembly using the exact same process as Senate Bill 151," Bevin spokeswoman Elizabeth Goss Kuhn said in a statement.
"If all of these bills are now invalidated based on Judge Shepherd’s ruling, our legal system will descend into chaos," she said. "For example, cities and counties will go bankrupt without pension phase-in funding, and programs to combat the drug epidemic will be negatively impacted."
Shepherd, however, broached this concern in his ruling and noted that courts have "many tools to fashion remedies that will guard against an injury to the public interest."
Bevin has been outspoken about Shepherd, previously calling the judge a "hack" and seeking to remove him from the case, a request denied by Kentucky Supreme Court Chief Justice John Minton Jr.
In his ruling, Shepherd also viewed the pension bill as creating debt, triggering a constitutional requirement that it receive at least 51 votes, or a majority, in the House. The bill cleared that chamber on a 49-46 vote; the Senate approved it on a 22-15 vote.
Kentucky Attorney General Andy Beshear, a Democrat, filed the lawsuit on behalf of the Commonwealth of Kentucky, the Kentucky Education Association, and the Kentucky State Lodge Fraternal Order of Police. Named as defendants are Republicans Bevin, Senate President Robert Stivers and House Speaker Pro Tem David Osborne.
Stivers spokesman John Cox declined to comment, saying Senate Republicans were reviewing the ruling.
Daisy Olivo, a spokeswoman for the House Republicans, said Osborne and Stivers would be issuing a joint statement later Wednesday.
Speaking at a press conference in Frankfort, Beshear said the ruling showed that "the public simply cannot be shut out of the legislative process."
"It's our hope that this will create better government," he said. "An 11-page sewer bill shouldn’t be turned into a 291-page pension bill. It just shouldn’t happen."
Asked about an appeal, Beshear said he believes Bevin will take the case to the Kentucky Supreme Court "if winning is more important than serving the citizens of the Commonwealth."
Democrats long had protested how the bill was passed. House Democratic floor leader Rocky Adkins said in a statement that Shepherd's opinion affirmed that the bill was "a bad bill then; it’s still a bad bill today."
“I appreciate today’s ruling, which is a victory in every sense of the word for the people of Kentucky, especially our teachers, public employees and retirees," Adkins said. "It confirms the arguments that House Democrats and I made as we soon saw the bill."
Nicolai Jilek, a legislative agent for the Kentucky FOP state lodge, questioned the way lawmakers chose to rush through a bill that was controversial by changing its content.
"I think we all knew right away that this just wasn't done the right way, and any kind of fix that comes about through the legislature, we want it to be a good fix, a fix that's actually going to work, one that will stand constitutional and legal tests," he said. "So we just want to do it right. Senate Bill 151 was not the right way to do it."
The bill made no changes to current cost of living adjustments for teachers, but it froze unused sick time starting July 1. New hires would not have a conventional pension but instead would enter a “hybrid cash balance” system that is viewed as more secure than a 401(k)-style retirement plan.
The day after the bill passed, school districts across Kentucky closed as teachers marched on Frankfort. On Wednesday, Kentucky Education Association President Stephanie Winkler appeared with Beshear and said she was pleased with the judge's ruling.
"I just cant be more happy and excited for our public employees, particularly our employees in our school system," she said.
Shepherd stopped short of ruling on whether the bill breaks the "inviolable contract" promised to public employees, saying that question was moot after it was determined that the bill didn't follow the state Constitution.
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