Wednesday, June 25, 2008

Pension reform moving forward

The House today passed pension reform 98-0. It now moves on to the Senate where it is expected to pass easily on Friday.

I would like to expand on comments I made in my last post about double dipping. We received a briefing on the pension reform legislation on Monday. In the meeting I asked about allowing double dipping if you become a legislator. Apparently everyone is being treated the same, and here is the explanation:

Under this bill you cannot double dip in the same retirement system. Now there are several different systems, KERS (mostly state employees) CERS (county, city, and classified school employees) KTRS (Kentucky Teacher Retirement System) SPRS ( State Police) and the Judicial retirement system (Judges and Legislators). So future employees cannot double dip in the same retirement system. However, future employees can get multiple retirements from different systems. Here is an example. Joe Smith is a police officer in CERS. Joe retires with a full CERS pension. Joe can go back to work for an agency that is attached to CERS, but cannot collect another pension. However, say Joe then went on to become a teacher. Then Joe can begin working on a second pension with KTRS.

My primary concern was that everyone is being treated the same, and it looks like they are. Just wanted to clarify that issue now that I am more educated on it.

Friday, June 20, 2008

Special session is on

The first (and hopefully only) special session of 2008 begins Monday. The topic is the pension system, which is currently $26 billion in the hole.

This desperately needs to be done. Overall the plan is a good start. We are taking some steps to stop the bleeding. However, this is akin to putting a band aid on a head wound. This will not fix the problem. It will slow down the rate at which we fall behind. But it must be done. Local Governments and school boards will be beneficiaries of these changes.

The Governor deserves credit for getting the issue moving again. The Senate President David Williams deserves credit for repeatedly saying that more needs to be done. Both the House and Senate leadership deserve credit for getting together and working this out.

That said, there are a couple issues I have with the legislation as I understand it. All I have seen thus far is a summary of the changes. First, it eliminates double dipping for all employees (which is good), except for Legislators (which is bad). Translation: If you are a current public employee, you can retire from your job with your full pension, come back some time later and start working on your second pension. This bill will eliminate that for future employees, and you can only have the first pension, unless you come back as a legislator or a Judge, then you can have that second pension. I think that is wrong and sends the wrong message. Perhaps this was an oversight in the summary, or I missed it. But I don't think so. Update- See above post for more information on this topic. The second issue I have is that there will be a schedule for the state to make the actuarial correct payment amount to the retirement fund. The percent will go up every year until the state makes the proper payment amount in 2025. That is 17 years from now. Not making the necessary payments is part of what has gotten us in this situation of the years. I would rather see this schedule accelerated.

Comprehensive bills like this always have little issues that every legislator can complain about. You have to consider if the bill does more good than bad. This bill is about 99% good. I look forward to voting for it.

Tuesday, June 10, 2008

A leader in Transparency

Secretary of State Trey Grayson has launched an initiative called "Check it out Kentucky". In it he details all the expenses from his office. I would like to applaud him for this innovation. The citizens of Kentucky should be able to easily access information regarding the expenditures of their government. Secretary Grayson has taken the first step in Kentucky to making this information available. You can find it here.

We need more of this sort of action in all levels of government. It is cliche, but this is your money and should shouldn't have to jump through several hoops to see where your money is being spent.

There was a good bill this past year, HB 105, that would have accomplished this goal for all of state government. I was proud to be a co-sponsor of it. Sadly, it went nowhere. Hopefully it will see a better fate next year.

Monday, June 9, 2008

Special session coming?

From what I have heard it is 50-50. If it happens there will be an agreement ready and it will start June 23rd.

Also I am hearing that the reform will limited in scope and will just stop the bleeding. Frankly, we need more than that, but I suppose we will take what we can get. The wheels of government turn slowly.....