FRANKFORT, Ky. -- A pension-relief proposal from Gov. Matt Bevin has passed in the Kentucky House by a 52-46 vote.
The vote on HB 1 was considered a pivotal test for the measure, which contains the governor's proposals for helping regional universities and quasi-government agencies deal with a crippling increase in their pension costs. It would freeze agencies' pension contribution rate for one year.
The measure now moves to the State Senate. A final vote is expected by Wednesday.
Debate over HB 1 came on day three of the special session called by Bevin. The bill received enough Republican support to pass, but Democrats and other opponents say it breaks the inviolable contract because it could affect the benefits of the agencies' current employees.
Final tally 52-46 pic.twitter.com/6UZQ4ywtyF
— Lawrence Smith (@LASmithReports) July 22, 2019
Bill sponor Rep. James Tipton says without this bill, the agencies' pension contributions will jump from around 49 percent of payroll to more than 80 percent. He says the bill gives the agencies a one-time window to make a decision whether to stay in the state retirement system. If the agencies decide to leave, they'll have the option of paying their outstanding obligation in a lump sum or in installments. Each agency will also have to decide whether or not to keep their eligible employees in the system or place them in a 401(k) style plan. Tipton admits there are no good options.
But Democratic Rep. Joe Graviss of Woodford County says HB 1 has provisions that bind future general assemblies and financial obligations for as much as 30 years in the future at a cost of more than $800 million.
Louisville Republican Rep. Jerry Miller supports the bill and calls it a matter of utmost urgency. He calls criticism of the bill "fear-mongering."
"It's not the time to point fingers but time to take action," Miller said.
Republican Jim DuPlessi says if legislature doesn't pass this bill, more of these agencies will hire contract labor and there will be even fewer employees in the state retirement system. But Democrat Derrick Graham urges legislators to think about setting off a chain of events that will cost public employees tens of thousands of dollars in their golden years.
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