Kentucky teachers protest pension bill outside the state Capitol

Teachers from across Kentucky gathered in Frankfort to rally against the pension bill that impacts benefits for many state employees.

LOUISVILLE, Ky. (WDRB) – The Kentucky Supreme Court unanimously ruled Thursday that a bill remaking the state pension system is not constitutional, a rebuke to Republican lawmakers.

In a 44-page opinion, the Supreme Court found the bill unconstitutional and void because the General Assembly did not follow the three-readings requirement in order to advance bills for floor votes.

The high court, in the opinion authored by Justice Daniel Venters affirming Franklin Circuit Court's ruling, determined that while the legislature meet constitutional requirements for each "reading" by referencing the titles of bills and making copies available for lawmakers on their computers, the title of Senate Bill 151, the pension bill, referenced its original version.

SB 151 began in the Kentucky General Assembly as an 11-page measure about wastewater but was amended to drastically overhaul public pensions. Republicans introduced and passed the 291-page version in one day, surprising Democrats, teachers and other public employees.

The bill received one reading in the House of Representatives once it was amended and none in the Senate.

"Nothing in the utterance of the bill’s numerical designation, SB 151, conveyed any information that the reading was related to a pension reform bill," Venters wrote in the opinion. "The title as read in each chamber pertained to the local wastewater services measure that was discarded.

"In deference to the General Assembly, we necessarily stop short of providing a complete and precise definition of what must occur to qualify as a reading of the bill, but we are well-settled in the conviction that what occurred here falls far short of" constitutional requirements.

In June, Franklin Circuit Judge Phillip J. Shepherd struck down the law in an opinion that described the legislators’ actions as a “slight-of-hand” that didn’t get a majority of votes in the Kentucky House, a requirement for spending measures.

Shepherd also determined the pension bill created debt and triggered a provision under the state constitution that it receive a majority of 51 votes in the House. The bill cleared that chamber on a 49-46 vote; the Senate passed it on 22-15.

Kentucky Attorney General Andy Beshear, a Democrat, filed the lawsuit on behalf of the state, the Kentucky Education Association, and the Kentucky State Lodge Fraternal Order of Police. Named as defendants are Republicans Gov. Matt Bevin, Senate President Robert Stivers and House Speaker Pro Tem David Osborne.

Bevin called Thursday "a sad day" and said he'd like to see the General Assembly pass a bill next year "that will save the pension system."

The odds of public workers receiving their pensions "have become increasingly less likely based on this ruling," he said.

"It was already a push to begin with," Bevin said during a Capitol news conference. "Senate Bill 151, let's be honest, was not going to save the pension system by itself, but it was going to stop the bleeding."

"That has now been thrown out by people who were not elected to pass laws for this state but have chosen to assume that responsibility for themselves," he added. "This is a poke in the eye, a kick in the teeth and a stab in the back to our legislature."

Beshear, however, hailed the Supreme Court's ruling as "a landmark win" for public workers and transparency in the legislative process.

"A unanimous opinion means that this case wasn't close, that this legislature and this governor violated their oath to uphold the Constitution, and that's a very serious thing," Beshear, a Democrat who is running for governor next year, told reporters. "... I believe that this is one of the most blatant constitutional violations of the legislative process that we've ever seen."

KEA President Stephanie Winkler also praised the Supreme Court's ruling.

"Public employees across the commonwealth will not see the promise of their retirement benefits broken by a law passed in the dark of night," she said during Beshear's news conference. "This was the right decision."

Ben Self, chairman of the Kentucky Democratic Party, said the ruling sends "a clear message to Matt Bevin and Republican lawmakers: you can’t change a sewer bill in the middle of the night and use it to flush the retirement benefits of our teachers, police, firefighters and other state workers at the last minute with no public input."

But Mac Brown, chairman of the Republican Party, said the high court's "overreach into the legislative branch has brought upon the legislative process will have ramifications far beyond" the pension bill, "imperiling hundreds of bills passed using the same process and bringing a grinding halt to the ability of the General Assembly to pass compromise legislation late in the session."

Republican leaders in the House, who unveiled the pension reform bill at a contentious committee meeting, echoed that sentiment, saying other bills passed by the legislature could be in danger. 

They referred to the ruling as "ill-advised," "unfortunate" and "disappointing."

"Today’s decision puts retirement checks for hardworking public employees at risk, and is a major setback to the difficult work undertaken to reverse the indecision and inaction of the past two decades," House GOP leadership said in a joint statement.

"Despite this, we are committed to leading in the effort to enact a solution for the critical situation that once again faces our Commonwealth."

The Supreme Court determined that striking down SB 151 would not imperil other bills passed under similar circumstances.

"Any infirmities that might have been raised in timely fashion to challenge the enactment of now well-established laws are beyond the purview of this opinion," the opinion says. "Moreover, we are not persuaded from the record here that such a potential parade of horrors awaits."

House Minority Floor Leader Rocky Adkins, another Democratic candidate for governor, said that the high court's ruling reaffirms his caucus's complaints about the process by which the legislature passed SB 151.

"We said that the legislative rules and processes should not be ignored, because that shuts out the very public we serve," Adkins, D-Sandy Hook, said in a statement.

"This ruling also properly protects our teachers, public employees and their retirees throughout the commonwealth. Going forward, our caucus remains firm in believing two things: That we should maintain the bipartisan pension reforms passed in 2013 and fund them."

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 Supreme Court heard arguments in September, with justices focused primarily on how the pension bill was passed, not its substance.

“The House and Senate are allowed to create their own rules,” Steve Pitt, Bevin's general counsel, told the court. “Call it a sewer bill, call it whatever you want to when it started out.”

Pitt argued that while the process may have been “distasteful,” it was not illegal. He also argued that a ruling against the pension bill would invalidate hundreds of other bills passed in a similar fashion.

But Beshear argued otherwise. “If you look at our history, these arguments, which are made every time a bill is challenged on constitutional grounds, that parade of horribles never happens,” he told the court.

Beshear emphasized the lack of public input on the bill and countered that citizens were intentionally excluded from the process.

“This court has a sacred duty to enforce the constitution created by the people, and it’s supposed to serve the people,” Beshear said.

“This is going to boil down to our strict separation of powers,” Pitt said.

Reporters Jason Riley and Travis Ragsdale contributed.

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