The Kentucky Supreme Court heard arguments from Attorney General Andy Beshear and the general counsel for Gov. Matt Bevin on Thursday, in the case reviewing a lower court’s ruling that voided the public pension bill passed by the Kentucky General Assembly this year.
In June, Franklin Circuit Judge Phillip Shepherd struck down Senate Bill 151 on the basis that it was passed in an improper manner, as it did not receive the required three readings on three separate days before being voted on and it did not receive the 51 votes required for an appropriations bill.
He did not rule on the substance of the bill and the question over whether it reduced the pension benefits of public workers in a manner that violated their inviolable contract with the state.
SB 151 was originally a bill dealing with sewage contracts, but near the end of the session, Republican legislators replaced the language of that bill entirely to that of pension reform measures in another bill that had failed to gain support. The bill then passed both chambers by a narrow vote within six hours, over the objections of Democratic legislators and protesting teachers who decried that process.
At the hearing on Thursday, the governor’s general counsel Steve Pitt argued that legislators had plenty of time to review the amended bill that had already been read three times, adding that the original pension bill had been available for them to read for “months.”
Beshear countered that it was only read three times as a completely different bill with an entirely different title and language, and that the required actuarial analysis of the original pension bill was rendered incorrect because its language was not copied identically into Senate Bill 151, which never received such an analysis.
By upholding the ruling voiding SB 151, Beshear said that the court would show that “it not only respects the constitutional and contractual rights of over 200,000 public servants, but it tells the General Assembly that you can’t take an 11-page sewer bill, turn it into a 291-page pension bill and pass it in just six hours. A government by the people must always include the people.”
Beyond questions of what constitutes a “reading” of a bill and the specific mechanics of how it was passed, Pitt made the argument that upholding the Franklin Circuit Court’s decision could open up challenges to hundreds or thousands of other bills that were passed in a similar manner by past legislatures and create chaos, jeopardizing landmarks bills like the Kentucky Education Reform Act of 1990, the 2013 pension bill setting up hybrid cash plans for new state workers and the 2013 heroin bill.
“There are hundreds and hundreds of people under indictment and maybe in the penitentiary right now (because of the 2013 heroin bill),” said Pitt. “They’ll be lined up like the people at the Arkansas border for the Oklahoma land rush, these criminal defense attorneys will, if this court affirms Judge Shepherd in this case. The opioid treatment centers that that bill required will no longer be available.”
Under questioning from the justices on this point, Beshear countered that this “parade of horribles” argument is telling the court it should not apply the law, adding that such arguments about a hypothetical flood of legal challenges has not come to fruition in past cases.
Another point argued by each side was whether or not the legislature was free to interpret the constitution on their own — in terms of their own rules for how bills can be passed — or whether it is the court’s place to have the final say in that matter.
While Beshear argued that it is the court’s job to be the final arbiter on interpreting the constitution, Pitt argued that the constitution allows the House and Senate to make their own rules, and those current rules say “a committee substitute shall be considered as the original bill. That’s the decision they’ve made, and that’s what this court, in my opinion, has to honor.”
Justices Lisabeth Hughes and Michelle Keller both appeared to take issue with Pitt’s argument, with Hughes arguing that the legislature “cannot make a decision that’s contrary to the plain language of the constitution. I took an oath to uphold the Constitution of the United States and the constitution of the commonwealth, and the legislators took the same oath. We all took the oath.”
Pitt countered that he didn’t think “this court can or should set standards for the legislature making its decision,” adding that the court “should not be making decisions and construing language that the legislature can best do itself.”
Keller countered that just as the executive branch cannot interpret the constitution in a vacuum, neither can the legislature.
“It does take some minimum competency and training to interpret the constitution, at least in a court of law,” said Keller.
“So I’m just wondering, if we defer to the third floor to determine the constitution themselves solely, with no check and balance on that, who is performing that interpretation of the constitution? Does it change every two years when a new set of legislators come in? To me, it just seems like intellectually, that’s a hard idea for me to get my head around.”
The law voided by Judge Shepherd will remain so unless his decision is overruled by the Supreme Court. The law would place teachers hired next year in a hybrid cash-balance plan similar to a 401(k) instead of a traditional defined-benefit pension plan, in addition to capping the amount of accrued sick leave that teachers may convert toward retirement.
Gov. Bevin has argued that the state’s public pension plans — among the worst-funded in the country — will soon collapse if the law remains voided, an assertion that groups representing retirees and state workers have called an exaggeration and scare tactic.