The Supreme Court of Kentucky issued a unanimous decision on Thursday upholding a Franklin Circuit Court ruling declaring the controversial public pension bill passed by the General Assembly this year as unconstitutional and void.
Just as Judge Phillip Shepherd had ruled earlier this year, the justices found that Senate Bill 151 — which mostly altered the pension benefits of teachers — was passed in an unconstitutional fashion, as it did not receive the proper three readings before passage, and is therefore void.
However, the justices also did not weigh in on whether or not the substance of the bill was constitutional, which means that Republican legislators may try to pass the same bill in the upcoming 2019 session.
In his lawsuit challenging the bill, Attorney General Andy Beshear claimed that SB 151 was not only passed in an illegal fashion, but that it reduced the pension benefits of public workers in a manner that violated their inviolable contract with the state. The justices ruled that opining on the latter question would merely serve as an advisory opinion, which is not the court’s role.
“The substantive merits of any future legislation on the subject matter before us should proceed without being influenced by this Court’s opinion on the present legislation,” read the decision written by Justice Daniel Venters.
In a statement posted on his Twitter account, Gov. Matt Bevin blasted the unanimous ruling as “an unprecedented power grab by activist judges,” and that striking the bill down for procedural reasons “will erode the rule of law that is the foundation of our government, but more immediately, will destroy the financial position of Kentucky.”
The governor’s general counsel argued in a hearing before the Supreme Court that nullifying the bill over the way that it was passed would cause legal chaos, as attorneys would begin to challenge other bills that were passed in a similar fashion.
Bevin stated recently that teachers’ pensions would be wiped out if the Supreme Court upheld Shepherd’s ruling, thought the Teachers’ Retirement System actually reported that its funding ratio improved over the last year and would continue to do so as long as it is properly funded by the General Assembly.
In a statement, Beshear called the unanimous decision “a landmark win for every teacher, police officer, firefighter, social worker, EMS and all our hardworking public servants.”
“Because of today’s ruling, an 11-page sewer bill can never again be turned into a 291-page pension bill and passed in just six hours,” stated Beshear. “It is my hope that moving forward the governor and General Assembly will start honoring the oath each elected official takes to support and follow the Constitution of the Commonwealth of Kentucky.”
Kentucky Democratic Party Chairman Ben Self also hailed the decision along similar lines, saying it “sends a clear message to Matt Bevin and Republican lawmakers: you can’t change a sewer bill in the middle of the night and use it to flush the retirement benefits of our teachers, police, firefighters and other state workers at the last minute with no public input.”
In a joint statement, the Republican leadership of the state House criticized the “unwise decision” and the “far-reaching” consequences that it would have on the separation of powers between branches in state government.
“While the legislature would never presume to judge the manner in which the Court conducts judicial business, we are nonetheless bound by its decision, no matter how ill-advised,” read the House GOP statement. “This unfortunate decision now subjects decades of good legislation to potential legal challenges, while revealing a complete and total lack of understanding for the separation of powers. It disrespects the hard work done by the people’s elected representatives and ignores the constitutional foundations of the three branches of government.”
Sarah Davasher-Wisdom, the chief operating officer of Greater Louisville Inc., said in a statement that while the court’s decision was based on procedural grounds, “GLI views this ruling as a major step in the wrong direction.”
“Now, Kentucky must act in 2019 to address the unsustainable costs of Kentucky’s public pension systems,” stated Davasher-Wisdon. “Long-standing priorities of GLI, like level-dollar amortization for paying off unfunded liabilities, cap on factoring sick days into benefits, and introducing hybrid cash-balance plans into the teachers’ retirement system, are vital financial reforms… GLI will work with the General Assembly to save our public pension systems and put our state on a more secure financial footing.”
Brian O’Neill, a spokesman for the Kentucky Public Pension Coalition, hailed the decision as upholding “the values we place in our constitution that make sure all Kentuckians have a voice.”
“Attacks on police officers, firefighters, teachers, and all other public employees will not be tolerated,” stated O’Neill. “A pension is not a bonus. With each and every paycheck, public employees have paid their fair share into the pension fund, and with each and every day of service to our Commonwealth, they earn their pensions.”
This story has been updated.