Speaking at a breakfast event hosted by Greater Louisville Inc. Tuesday morning, Gov. Matt Bevin once again pitched the public pension plan he first revealed last week, saying it should be unanimously supported by state legislators in both parties once he calls a special session to take up the bill.
While the legislation being crafted by the Bevin administration is not yet complete and has not been released to the public, the governor, House Speaker Jeff Hoover and Republican Senate President Robert Stivers presented bullet point highlights of what the bill will contain in a press conference last Wednesday.
They said their legislation will move most current public sector workers from a defined benefit plan to a 401(k)-style plan, arguing it would keep the promises made to employees and retirees about their pension benefits while saving the severely underfunded plans from insolvency.
Though the president of the Kentucky Education Association — the union representing teachers throughout the state — slammed the bill this week by saying it would “devastate” public education in the state, GLI’s chief operating officer Sarah Davasher-Wisdom told the audience at Tuesday’s breakfast that the local chamber “strongly endorses the concepts” presented in the Bevin’s pension plan so far.
Telling the audience that tackling tough issues like pension reform is what he pledged to do in his 2015 campaign for governor, Bevin said he is making tough decisions on the badly underfunded public pensions that were ignored by the political leaders for decades.
“Nobody wants to be the governor who is delivering this message,” said Bevin. “I want to be the puppies and rainbows and ribbon-cutting guy, that would be awesome … I’m like the guy at the parade, but I’m the guy with the shovel behind the elephant.”
Noting it will not be easy to pass such sweeping legislation affecting the pensions of state workers, Bevin said “to get this done, it’s not just literally what is financially the best and most possible thing. You have to deal with the political, as well, in terms of what can be done. And the legal, what’s allowed to be done. So threading and balancing the legal and the political and the financial is really where the magic happens in Frankfort.”
While not directly referencing the criticism of KEA, Bevin did criticize “all the fearmongers and the Chicken Littles, the sky-is-falling crowd, that are just so upset about the fact that anything is changing and how will we ever be able to attract future employees, and we can’t possibly offer anything different than what we’ve done in the past. And yet, the path we’re on is literally a direct path to insolvency, financially. None of the sky-is-falling crowd have any solutions at all.”
Echoing the finding of a consultant contracted by the administration in August, Bevin said that even if legislators had paid the full actuarially required contribution to employees’ pension plans over the past 15 years, such plans would still have an unfunded liability amounting to 84 percent of what exists now.
Instead, he said the pension crisis was caused by unrealistic assumptions made by the plans’ actuaries, adding that he believed the true unfunded liability is actually as high as $83 billion — more than double what some estimate.
Bevin said the bill would be released to the public and he would call a special session of the legislature to vote on it “in the days immediately ahead,” adding that while the legislation is still “in the process of being finalized for release,” its main features were already shared during last week’s press conference.
“This should be unanimously supported by Republicans and Democrats alike,” said Bevin. “There’s nothing about this that is not the responsible thing to do.”
While many Democrats in the state legislature say they have not been shown a copy of the bill, two Republican House members — Reps. Donna Mayfield and Wesley Morgan — said the same at a KEA forum held in Madison County on Monday evening, both pledging they wouldn’t vote for any bill that hurt teachers.
Asked about the KEA’s criticism of his pension plan after Tuesday’s GLI event, Bevin said that such critics have no alternative solution other than the status quo and claiming “the sky is going to fall” under the governor’s plan.
“The KEA’s response was, frankly, not that surprising, unfortunately,” said Bevin. “They’re entitled to their opinion. But the reality is we do have to come up with a solution. Simply pointing out that there is a problem and wishing it would go away is not going to cut it.”
Bevin also told reporters the bill would be finished “imminently.”
“It’s already being read by people in the legislature,” said Bevin. “So as some start to look at this and digest this, others will have the opportunity to see it. It’s making its way about now, and soon enough it will be out in the public domain and people will be able to look at it.”