melinda gibbons prunty CURRENTBELTON, Ky. (3/12/18) ― Pension Update: SB1 was heard in the Senate State and Local Government Committee last week and sent to the Senate floor on Friday, however, was not voted on but was sent back to committee for more tweaking. It is my understanding that more negotiated changes may be offered on Monday. Please make sure that what you are currently looking at is the Committee Substitute to SB1. http://www.lrc.ky.gov/recorddocuments/bill/18RS/SB1/SCS1.pdf. That being said, there may be further amendments made.   

I have been receiving numerous Facebook messages, e-mails and have been having conversations when I am out in the community with both current and retired state employees from various branches of the government including teachers, law enforcement, social workers, etc. I am going to share what I have been sharing with folks when I reply or if I am speaking to them face-to-face. This issue is bigger than just one aspect and it is not as simple as it might appear on face value. I am going to give some bullet points that include some debunks of myths as well as some things that we as legislators have to take into consideration from the broader view:

• No monies were ever taken from KTRS; there are laws to prevent that; the only time money was ever transferred from TRS was in 2000 at the request of the KTRS board and pushed by KEA; those monies were used to help with increasing insurance costs in the teacher insurance trust fund and were paid back with 7.5 percent interest in 2010, a rate higher than it would have earned had it simply remained in the system due to the losses the system sustained during the recession.

• The general assembly has never failed to make the contribution required by law. The money that keeps being brought up refers to the money that goes above and beyond the employer match; this is the money that is required to make up for the losses on investments within the system; those monies are purely taxpayer dollars and not taken from the teachers. The amount that the system was short this year alone is $853 million and increases every year. The system is paying out more than it is taking in; in previous years there were 4 working teachers to every 1 retiree; now it is down to 1.5. This is why the system is unstainable, even though technically, current teachers are not supposed to be paying for those already retired; each teacher’s pension is supposed to be pre-funded by the employer contribution, the employee contribution and returns on investments. This year alone the general assembly has put in $3.3 billion towards pensions. Sales tax would have to be raised $0.04 just to pay for pensions. If taxes were raised that much it would cost retirees far more than any pension change that could be proposed. If there are no changes, the TRS will become insolvent in approximately fifteen years. Checks would be suspended until the system builds value back up.
 
• Monies proposed to be transferred for health insurance for the second year of the budget cycle from the KEHP are not strictly employees’ monies. The state is self-insured and self-funded; the state contributes 80% and employees 20 percent; those monies are earmarked for health insurance and have been transferred in the past for the same purpose. The transfer was made in order to have a balanced budget which we are constitutionally required to do. The very members who railed against it voted for it in the past under previous administrations for the same purpose.
 
• Exemptions that are typically mentioned have been estimated to bring in only $800 million so nowhere near the amount needed to cover all liabilities.
 
• When looking at the overall picture, as legislators we have to consider how what we do might impact all constituents, including the minimum wage worker who will not get a pension but who pays taxes. Whatever we do must be fair and just to everyone.
 
• The budget that the House sent over to the Senate fully funded both state employee and teacher pensions, which is 14% of the overall budget. It is the largest commitment ever made for Kentucky employees’ public pensions.  

• The 401(a) plans originally proposed would have cost an extra $600 million, so the decision was made not to go that route. House A&R Chair, Representative Rudy, committed to hearing tax reform prior to the end of this Session to look at possible new sources of revenue.
 
• Many already retired folks say let go of the COLA and protect health insurance even if they have to pay a little for it. They understand the problem has been growing for over 20 years.

• Many House members are retired KY State Police, retired teachers/administrators or have spouses who are retired teachers or state workers say this is about saving the pension system.
 
• A bill that is proposed one day may look very different by the time either chamber votes on it; the final version is the one that everyone needs to be aware of and review.
 
The road plan was passed last week that includes over $545 million in investments to improve our states’ infrastructure. The plan includes bridges, road paving and resurfacing and those that have sat in a backlog due to lack of finances. One of the goals of the road plan was to support new businesses coming to the state including EnerBlue and Amazon Prime. I continue to communicate to the Governor’s staff, members of the Economic Development Cabinet as well as others that we have prime locations for businesses in the 15th District.

We continue to update statutes that will be encouraging for businesses to choose Kentucky to locate.
 
Other items to note:
• Passage of HB 128 that guarantees public middle and high school students learn about the Holocaust and other genocides
• Passage of HB 363 that will institute major Medicaid and food stamp reforms; the goal is to reduce fraud
• Passage of HB 454 out of committee that would prohibit the brutal form of abortion that involves the crushing and dismemberment of an unborn child older than 11 weeks post conception; this is not a ban on abortion as other forms are still available, just not as inhumane
• Passage of HB 81 which would limit misuse of disabled parking permits
• Passage of HB 246 which would allow community pharmacies to play a bigger role in fighting opioid addiction by creating a pilot program to gauge the effectiveness of community pharmacy care delivery for the dispensing of non-controlled medication assisted therapy to those with opioid use disorder
• Passage of HB 22 that defines the lawful use of drones
 
We welcomed Robert Goforth as the newest member of the House. Rep. Goforth won a special election to replace Rep. Marie Rader who stepped down in December and will be representing the 89th District in Southeast Kentucky.
 
I was privileged to host two pages this week from the district, Dianna Whitehouse and Lucas Arnold, as well as honor Sgt. Justin Jones of the Madisonville Police Department on the House floor. Sgt. Jones heroically saved a 10-year-old boy in December when he arrived at his home and the found the boy unconscious.
 
While home this weekend I enjoyed the Jimmy Walker Concert as well as connecting with constituents while out and about in the district. And finally, the Service Area at Beaver Dam will have its’ Ribbon Cutting Ceremony 2 p.m. Friday, March 16. The ceremony is open to the public.
 
I want to thank you once again for allowing me to be your voice in The People’s House. I welcome your comments and concerns on any issue and can be reached, regardless if in session or not, through the toll-free message line in Frankfort at-1-800-372-7181, at 502-564-8100 Ext. 686, or via email at This email address is being protected from spambots. You need JavaScript enabled to view it.. Please follow me on Facebook @melindagibbonsprunty. You can also keep track of committee meetings and potential legislation through the Kentucky Legislature Home Page at www.lrc.ky.gov
 
Note: Representative Melinda Gibbons Prunty represents the 15th House District serving Muhlenberg and southeast Hopkins Counties which includes White Plains, Morton’s Gap, Anton as well as sections of Nortonville, Earlington and SE Madisonville. She is Vice-Chair of the Health & Family Services Committee and serves as a member of the Education, IT & Small Business, Medicaid Advisory & Oversight Committees, the Budget Review Subcommittee on Education and is a member of the Kentucky Colon Cancer Screening Advisory Committee http://chfs.ky.gov/dph/ColonCancer.htm

 

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