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.
Showing posts with label Pension. Show all posts
Showing posts with label Pension. Show all posts
Wednesday, June 25, 2008
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.
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.
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.....
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.....
Thursday, May 29, 2008
Pension reform still possible?
Governor Beshear had a meeting with leaders of the legislature this morning about pension reform. There is a move afoot to have a special session to get this done.
I certainly hope this happens. We are well past the time to make some changes on this topic. My only complaint is that it may not go far enough. The proposal includes more study of the already most studied issue in Frankfort. But, progress is progress. Below is the release from the Governor:
Gov. Beshear Proposes Pension Reform Measures – Will Save $500 Million Annually in Pension Costs and at Least $50 Million in Immediate Savings to City and County Governments and School Districts
Proposes Special Session Last Week of June; Creates Working Group to Address Remaining Issues
FRANKFORT, Ky. (May 29, 2008)—Gov. Steve Beshear today called on legislators to agree on major pension reform issues in the next three weeks which will save taxpayers $500 million annually and city and county governments and school districts at least $50 million immediately. If such an agreement can be reached, the Governor said he would call a special legislative session to enact the reforms before June 30, the end of the current fiscal year.
“Democrats and Republicans, public employees and public employers, we all agree that the state’s public pension problem is a real mess,” said Gov. Beshear. “And, we all agree that the failure to pass meaningful pension reform during the last legislative session has made the problem worse. And, most significantly, we all agree that we must act now to stop the bleeding of taxpayer dollars.”
During the last session, the House and Senate passed separate bills, many provisions of which were strikingly similar. Key issues that remain in dispute are governance of the systems and consideration of new models for future benefits, issues that have not been fully vetted and did not receive any recommendation from former Governor Fletcher’s Blue Ribbon Commission.
Gov. Beshear’s staff compiled all of the provisions of the two pension bills from the 2008 session that used the same language or shared principles.
“The draft language represents issues where there is substantial agreement between both Houses,” said the Governor. “In addition, this draft contains the recommendations of Governor Fletcher’s Blue Ribbon Commission.
Those recommendations include:
Raising retirement ages for future hires;
Lowering the cost of living adjustment to 1.5 percent;
Requiring new employees to contribute 1 percent of their salary to the health insurance fund; and
Reforming the practice of double-dipping.
Gov. Beshear met with House and Senate leaders this morning to provide the draft language and urged them to reach agreement on these core components in the next three weeks. If they agree, he will call a special session the week of June 23 to take up this compromise bill.
“Agreement on these reforms will result in savings of nearly $500 million annually to state and local government obligations to fund the pension system,” said Gov. Beshear. “It will also provide city and county governments and school districts with at least $50 million in immediate savings starting July 1.”
Gov. Beshear also emphasized that the state will realize a record number of retirees this year, and a failure to reform the practice of “double dipping” could impose significant additional costs on the state.
“It’s time to set aside issues that divide us, to identify all of the significant things we agree on, and work together to come up with a partial, but substantial solution to the pension mess we are in,” said Gov. Beshear. “We all agree there is a problem. We agree the problem is getting worse. We agree the time is now. And we agree on the basic changes that need to be made. Let’s get it done, now.”
###
I certainly hope this happens. We are well past the time to make some changes on this topic. My only complaint is that it may not go far enough. The proposal includes more study of the already most studied issue in Frankfort. But, progress is progress. Below is the release from the Governor:
Gov. Beshear Proposes Pension Reform Measures – Will Save $500 Million Annually in Pension Costs and at Least $50 Million in Immediate Savings to City and County Governments and School Districts
Proposes Special Session Last Week of June; Creates Working Group to Address Remaining Issues
FRANKFORT, Ky. (May 29, 2008)—Gov. Steve Beshear today called on legislators to agree on major pension reform issues in the next three weeks which will save taxpayers $500 million annually and city and county governments and school districts at least $50 million immediately. If such an agreement can be reached, the Governor said he would call a special legislative session to enact the reforms before June 30, the end of the current fiscal year.
“Democrats and Republicans, public employees and public employers, we all agree that the state’s public pension problem is a real mess,” said Gov. Beshear. “And, we all agree that the failure to pass meaningful pension reform during the last legislative session has made the problem worse. And, most significantly, we all agree that we must act now to stop the bleeding of taxpayer dollars.”
During the last session, the House and Senate passed separate bills, many provisions of which were strikingly similar. Key issues that remain in dispute are governance of the systems and consideration of new models for future benefits, issues that have not been fully vetted and did not receive any recommendation from former Governor Fletcher’s Blue Ribbon Commission.
Gov. Beshear’s staff compiled all of the provisions of the two pension bills from the 2008 session that used the same language or shared principles.
“The draft language represents issues where there is substantial agreement between both Houses,” said the Governor. “In addition, this draft contains the recommendations of Governor Fletcher’s Blue Ribbon Commission.
Those recommendations include:
Raising retirement ages for future hires;
Lowering the cost of living adjustment to 1.5 percent;
Requiring new employees to contribute 1 percent of their salary to the health insurance fund; and
Reforming the practice of double-dipping.
Gov. Beshear met with House and Senate leaders this morning to provide the draft language and urged them to reach agreement on these core components in the next three weeks. If they agree, he will call a special session the week of June 23 to take up this compromise bill.
“Agreement on these reforms will result in savings of nearly $500 million annually to state and local government obligations to fund the pension system,” said Gov. Beshear. “It will also provide city and county governments and school districts with at least $50 million in immediate savings starting July 1.”
Gov. Beshear also emphasized that the state will realize a record number of retirees this year, and a failure to reform the practice of “double dipping” could impose significant additional costs on the state.
“It’s time to set aside issues that divide us, to identify all of the significant things we agree on, and work together to come up with a partial, but substantial solution to the pension mess we are in,” said Gov. Beshear. “We all agree there is a problem. We agree the problem is getting worse. We agree the time is now. And we agree on the basic changes that need to be made. Let’s get it done, now.”
###
Wednesday, April 16, 2008
Pension fix is dead
Where to start?
This was a vital item to pass this year. It is a crime that nothing got done. Because when your pension system is $26 billion in the hole, it is probably past time to stop digging and start filling up the hole. Last year then Governor Fletcher put together a "blue-ribbon commission" to come up with solutions to this problem. That commission did an excellent job putting together their suggested plan.
So this session the House passed their version of the plan, the Senate passed their version of the plan. Which of course means that the issues goes to a conference committee. The conference committee was put together before we left for break on April 1st. So there was about 2 weeks to get an agreement. Yet I am not sure that there were any meetings held during the break. Either way, there was no agreement when we returned to Frankfort Monday.
Fast forward to Tuesday, or our last day in Frankfort. At about 3:00pm I am hearing that the issue is dead. At 6:00 it has new life as the committee (as we are told) are meeting on it. About 8:00pm it sounds like there is an agreement. Shortly thereafter some information starts floating around about the details of the agreement. I find out later that the conference committee never met, it was leadership who apparently worked out a deal.
By 10:30, it was dead again. Why? You can see in this article from the Lexington Herald Leader, apparently the Jefferson County Teachers Association(JCTA) and the Kentucky Education Association (KEA) killed the bill with their opposition. Instead, the House gutted another bill at the final hour and put the House version of the pension bill in it to send to the Senate. Not surprisingly, the Senate did nothing with it as they thought they had a compromise agreement with the House.
Some thoughts:
Since when did the KEA and the JCTA start running the Democratic Caucus in the House? Why is it that they get to make such vital policy decisions that affect every person in this state?
I have seen the very difficult job leadership has on these issues. It is a demanding, often thankless job. So I am not questioning judgement or motives. That said, I just don't understand how an issue gets this out of control, the need for a solution so obvious, and yet it can't get done.
From what I finally saw on a 2 page outline of the compromise, it barely stopped the bleeding. There was to be more study of the issue. There is no more studied issue in Frankfort. Of course, now that will be done, there is no choice. This should be the most important issue in the 2009 session, assuming there is no special session to take it up.
This was a vital item to pass this year. It is a crime that nothing got done. Because when your pension system is $26 billion in the hole, it is probably past time to stop digging and start filling up the hole. Last year then Governor Fletcher put together a "blue-ribbon commission" to come up with solutions to this problem. That commission did an excellent job putting together their suggested plan.
So this session the House passed their version of the plan, the Senate passed their version of the plan. Which of course means that the issues goes to a conference committee. The conference committee was put together before we left for break on April 1st. So there was about 2 weeks to get an agreement. Yet I am not sure that there were any meetings held during the break. Either way, there was no agreement when we returned to Frankfort Monday.
Fast forward to Tuesday, or our last day in Frankfort. At about 3:00pm I am hearing that the issue is dead. At 6:00 it has new life as the committee (as we are told) are meeting on it. About 8:00pm it sounds like there is an agreement. Shortly thereafter some information starts floating around about the details of the agreement. I find out later that the conference committee never met, it was leadership who apparently worked out a deal.
By 10:30, it was dead again. Why? You can see in this article from the Lexington Herald Leader, apparently the Jefferson County Teachers Association(JCTA) and the Kentucky Education Association (KEA) killed the bill with their opposition. Instead, the House gutted another bill at the final hour and put the House version of the pension bill in it to send to the Senate. Not surprisingly, the Senate did nothing with it as they thought they had a compromise agreement with the House.
Some thoughts:
Since when did the KEA and the JCTA start running the Democratic Caucus in the House? Why is it that they get to make such vital policy decisions that affect every person in this state?
I have seen the very difficult job leadership has on these issues. It is a demanding, often thankless job. So I am not questioning judgement or motives. That said, I just don't understand how an issue gets this out of control, the need for a solution so obvious, and yet it can't get done.
From what I finally saw on a 2 page outline of the compromise, it barely stopped the bleeding. There was to be more study of the issue. There is no more studied issue in Frankfort. Of course, now that will be done, there is no choice. This should be the most important issue in the 2009 session, assuming there is no special session to take it up.
Thursday, February 28, 2008
Pension fix
Today we passed HB 600, a step in the direction of digging out of the pension hole we are in. In case you did not know, the state of Kentucky has a deficit in our pension system of $26 billion.
No, that is not a misprint.
So we took a step forward in eliminating some of that. Mostly, it changed benefits for future employees. Currently we have either the most generous or second most generous retirement system in the country, depending on who you listen to. Either way, we can't afford it.
This is not a perfect bill. No 200 page bill will be perfect. We could have gone farther in some things and that would be fine with me. But to make as many changes as we did, to get the unanimous support it did, was a great accomplishment for all involved.
No, that is not a misprint.
So we took a step forward in eliminating some of that. Mostly, it changed benefits for future employees. Currently we have either the most generous or second most generous retirement system in the country, depending on who you listen to. Either way, we can't afford it.
This is not a perfect bill. No 200 page bill will be perfect. We could have gone farther in some things and that would be fine with me. But to make as many changes as we did, to get the unanimous support it did, was a great accomplishment for all involved.
Friday, February 8, 2008
23 days down....
and not much is happening. But we are expecting the Governor's plan for casinos next week and pensions the following week.
Just to give you a glimpse of the way things work, we have 23 days behind us, and I have yet to have the opportunity to vote on a Republican bill either in committee or on the floor of the House.
Just to give you a glimpse of the way things work, we have 23 days behind us, and I have yet to have the opportunity to vote on a Republican bill either in committee or on the floor of the House.
Thursday, January 24, 2008
Plodding along
We are moving along slowly right now, passing about 2 to 4 bills a day. That is not too bad, I think things are moving quicker than they did last year. I am told that things will kick into high gear next week. Tuesday is the filing deadline, so everyone knows what they are up against. Then Tuesday night is the Governor's budget address, where we expect to learn the plan for the budget, and for the pension fix.
Friday, December 14, 2007
The need for help from Frankfort
Yesterday there was a Northern Kentucky Caucus meeting at the Boone County Campus of Gateway Community and Technical College. This meeting was arranged by our Caucus Chairman, Sen. Damon Thayer. There are always many requests this time of year from interested parties wanting to ask the caucus for help. This was a chance to get the caucus together and hear from everyone at once.
Most of the participants yesterday came requesting state funds. When I totaled the requests of just the capital funds, it equaled $173 million. That does not include the $21 million requested for the Gateway Urban Campus, or the over $50 million from NKU for their desperate needs of space.
Long story short, I'd love to fund all of this, but it is not going to happen. The state is in tough financial shape. This is largely (in my opinion) due to the years of underfunding the state pension system. The potential exists that all new money in this next 2 year budget could be eaten up by the pension system, just to keep our head above water according to the actuaries.
Most of the participants yesterday came requesting state funds. When I totaled the requests of just the capital funds, it equaled $173 million. That does not include the $21 million requested for the Gateway Urban Campus, or the over $50 million from NKU for their desperate needs of space.
Long story short, I'd love to fund all of this, but it is not going to happen. The state is in tough financial shape. This is largely (in my opinion) due to the years of underfunding the state pension system. The potential exists that all new money in this next 2 year budget could be eaten up by the pension system, just to keep our head above water according to the actuaries.
There is one project from yesterday that I would like to see funded. It is a request for a youth drug treatment center here in Northern Kentucky. Currently there is no place to a youth to go to get treatment for drug addiction. A teenager would currently have to go to Lexington or Louisville to get treatment, if they can get in at all. We need to try to get these kids turned around and make them productive citizens. Otherwise, these tend to be the kids who fill our jails and our welfare rolls. Sometimes they become the kids who break their parents hearts by passing away much too early. Many projects can show the economic benefits by increased revenue and jobs. It is hard, if not impossible to quantify money saved by turning peoples lives around, and not having them supported by tax dollars for the rest of their lives, or the cost of lost productivity.
The cost is about $2 million to build it and $1.2 million to operate the first year. According to Mary Pat Behler who presented to us yesterday, it costs about $40,000 to incarcerate a juvenile, but $12,500 to put them through treatment.
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