Try saying that three times. Now try to imagine something harder: getting factions and stakeholders on one accord – to say nothing of the politicians themselves. But, such is the case with most major pieces of legislation of any consequence. So, let me get to this one.
On Tuesday, the chair of the House State Government Committee offered up a competing plan for the cash-poor public employee pension system although the Senate already approved a plan by a 33 to 5 vote earlier this month.
Muhlenberg County lawyer Brent Yonts keeps the traditional, defined benefit plans for new hires as opposed to a hybrid plan proposed by Senate Republican floor leader Damon Thayer that mimics a 401-K like method. Yonts’ bill demands that the General Assembly pay the actuarially-required contribution to the pension system beginning in fiscal year 2014, and then would be prohibited from suspending that statute. In addition, the General Assembly could alter future benefits for new hires. It also provides a mechanism to keep the cost of living adjustments (COLAs) Senator Thayer had wanted to repeal. In the clip below, Rep. Yonts laid out the conditions for how the COLA’s would work:
Shelbyville Republican Brad Montell complained about the lack of an actuarial analysis of Yonts’ plan and chastised Yonts for dissing key recommendations from a year-long task force on public pensions and a high-ranking Senator who embraced those ideas.
As votes were cast, most Republicans declined to vote. Campbellsville Republican Jon Carney echoed the sentiments of Brad Montell. Democrat Derrick Graham, who has a heavy constituency of state workers, was quick to rebut.
The House committee version of Senate Bill 2 was approved by the House State Government committee with 17 yes votes, 1 no vote, and 10 passes by Republicans Tuesday afternoon.
Now on to the House Democrats’ proposal to create a funding stream to deal with the $30 billion unfunded liability in the public employee pension systems. It comes by way of House Bill 416 by House Speaker Greg Stumbo. The Speaker’s plan expands lottery options to include games like Keno and instant racing. The Speaker ditched the well-publicized idea of applying the 6-percent sales tax to lottery tickets after conversations with Kentucky Lottery officials determined that move would harm game sales. Representative Stumbo says existing statutory authority allows for the expansion of lottery offerings like online gaming, Keno and instant racing.
The Speaker insisted that Lottery proceeds would maintain commitments to the KEES scholarship fund and other initiatives and would be held harmless and allowed two-percent growth under the proposal. Money over and above that would be put into a newly created pension sustainability trust fund. Stumbo says $300 million were wagered through instant or historical racing machines in Kentucky from September 2011 through December 2012, and he explains how tax receipts in excess of that amount would be dedicated to the new pension fund.
The House Appropriations and Revenue committee advanced the speaker’s bill without opposition, although the Republican members on the panel did not cast votes.
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