FRANKFORT, Ky. (AP) - Kentucky Gov. Matt Bevin’s pension-relief proposal cleared the Republican-run state House by a slim margin Monday, surviving a crucial showdown as lawmakers continued a special legislative session convened by the GOP governor.
The 52-46 vote capped a three-hour debate, sending the legislation to the Republican-dominated Senate, where a potential final vote is expected Wednesday. It’s the latest attempt by Bevin and lawmakers to shore up one of the country’s worst-funded public pension systems.
In a tweet sent out as the House debated the bill, Bevin praised House Republicans for “solid work” on the pension legislation. Nine GOP House members later voted against the measure, which House leaders said needed 51 votes to pass because it carries an emergency clause - allowing a measure to take effectively immediately upon becoming law.
The bill - reflecting Bevin’s plan - aims to deliver relief for regional universities and quasi-governmental entities strapped by surging pension costs. Among those affected are social safety-net agencies including public health departments, community mental health centers and domestic violence shelters.
“There are no good choices is the dilemma that we and these agencies find themselves in,” the bill’s sponsor, Republican Rep. James Tipton, said during the debate. “We are trying to carve a path forward that will allow them to remain viable and, in many cases, to remain open.”
House Democrats warned the bill is likely to draw a court challenge, claiming it runs afoul of “inviolable contract” language guaranteeing workers the pension benefits they were promised when hired.
The bill’s opponents warned that some affected employees could end up with significantly less in retirement benefits if they’re moved into less generous 401(k) plans with no guarantee of an employer match.
For thousands working at those agencies, “the retirement security they have long counted on will no longer be there” if the bill becomes law, said Democratic Rep. Derrick Graham.
Democrats offered proposed amendments to alter the measure, but House Speaker David Osborne ruled the proposals out of order.
Graham warned that passage of the governor’s proposal would “set off a painful chain of events.” Leaders of those agencies, he said, will have to decide “whether to directly hurt the very people who make these agencies the success that they are, or they will have to decide what services they will have to cut to the bone, and that’s if they are somehow lucky enough to keep their doors open.”
After the House vote, Osborne dismissed attacks against the bill as “fear-mongering.”
Bevin’s plan allows the agencies to stay with the Kentucky Retirement Systems at full cost; leave the retirement system by paying a lump sum equal to future projected benefits payments; or buy their way out in installment payments over 30 years. It extends a freeze on pension costs at the lower rate for another year for the regional universities and quasi-public agencies.
A Democratic alternative defeated in committee proposed a long-term freeze of retirement payments paid by the agencies along with redirecting tens of millions in retiree health insurance payments to pension liabilities for five years. The retiree health insurance fund would be paid back over time through higher annual payments to it. Supporters said it wouldn’t affect retirees’ health care benefits or premiums.
The governor rolled out his proposal more than two months ago as a replacement for a similar measure Bevin vetoed in April after the legislature had ended its regular session. The governor spent weeks building support for his plan and those efforts paid off Monday - barely.
Bevin called lawmakers back for the special session that began last Friday. A special legislative session costs taxpayers about $66,000 per day.
The governor has been wrangling with the politically sensitive pension issue as he seeks reelection. He’s being challenged by Democratic Attorney General Andy Beshear in November.
Beshear has said Bevin’s proclamation calling lawmakers into session included restrictive language creating “a clear danger” that anything passed would draw a court challenge. After the House vote, Beshear said the proclamation was used to block lawmakers from presenting amendments during the debate.
Bevin spokeswoman Elizabeth Kuhn said Beshear was looking “for any excuse” to continue his “politically motivated” legal fights with Bevin.
“If the General Assembly felt constrained by the governor’s proclamation, they are an independent body and could choose to gavel out without passing legislation,” she said in a statement.
Instead, the House passed the governor’s proposal, she said.
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The legislation is House Bill 1.
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