Tuesday, January 8, 2013
Kentucky over $33 BILLION DOLLARS in the pension hole
Nearly all the lawmakers convening at the State Capitol for the first day of the news session of 2013 agree pension reform is the number one priority.
With the pomp and circumstance of opening a new Kentucky General Assembly and swearing in the first new Senate president in 12 years out of the way, the men and women who serve the Commonwealth say they are ready to get down to business. Top on the list, "pension reform," said Republican floor leader Senator Damon Thayer.
It's not a sexy topic, but Senator Thayer said the state has a $33 billion unfunded liability it has to deal with. It's basically promised money to employees when they retire. The City of Louisville alone has $18 billion of that. Everyone from city leaders to the Governor agree it's a problem that's been building for almost a decade. "The longer we wait on pension reform the worse the problem gets," said Thayer.
That is why the new floor leader will be responsible for a bill that solves the problem before taxpayers have to foot the bill. Senator Thayer said the solution is similar to a recommendation from a task force that would change the system into one that is similar to private sector plans. "It shares the risk between the employer and the employee and provides a good retirement for employees when they leave public service."
Thayer believes the state can cover the costs. "If we have moderate growth in revenues over the next biennium we will have more than enough money to meet the actuarially funded contribution without raising taxes."
There are still 138 other lawmakers who get to weigh in. Thayer said he's hopeful the bill can get passed in the 30 day session, but it's unclear if a funding plan can be agreed on in the same time period.