Two lawmakers have proposed legislation this week that would find funds for the state’s woefully underfunded public pension systems.
On Monday, House Speaker Greg Stumbo said revenues from expanded gaming in the state could benefit the pension systems and that it is time for the voters of the state to decide on the issue for themselves.
Stumbo explained on KET’s “Kentucky Tonight” that if approved, the constitutional amendment he plans to file would dedicate the state’s revenue to three areas: strengthening the state’s public pension systems, education and horse-racing industry.
According to a release from Stumbo’s office, the Speaker’s proposal, which is still being drafted, calls for 40 percent of the state’s revenue to go to elementary and secondary education; 30 percent to postsecondary education; 20 percent to the state’s public retirement systems “or any other public purpose, as the General Assembly may decide”; and 10 percent for the horse-racing industry.
“The evidence is clear: Kentuckians are visiting casinos in other states in large numbers – one recent story by the Kentucky Center for Investigative Reporting conservatively estimates they’re spending more than $3 billion a year at those along the Ohio River – and the state’s two instant racing sites have now generated more than $1 billion since they first went online in Sept. 2011,” Speaker Stumbo said. “Whether we like it or not, expanded gaming is here in Kentucky. The only question is whether we should finally benefit from it.”
Revenue from expanded gaming was also mentioned by Democratic governor’s race candidate Jack Conway as a possible dedicated funding source for the pension plans when he sat down with the Kentucky Chamber to discuss pensions. Compare the pension plans of all three gubernatorial candidates here.
Also looking to find more money for the pension systems, state Rep. Brad Montell of Shelbyville announced Friday that he will pre-file legislation for the 2016 session that would, if passed, stop the sweeping of excess funds from the Public Employees’ Health Insurance Trust Fund into the General Fund, and instead be used to address the unfunded liability within the Commonwealth’s pension systems.
According to a release about the proposed legislation, Montell’s bill would direct 75 percent of excess dollars generated within the health insurance trust fund to the Kentucky Employees’ Retirement System (KERS), Kentucky Teachers’ Retirement System (KERS), Kentucky State Police Retirement System, and County Employees’ Retirement System (CERS) with the amount received by each system determined by the individual system’s pro rata share of the total unfunded pension liabilities of the entire Commonwealth’s retirement systems.
“I think it’s an insult when any money that is put into an account for the benefit of our state employees, whether it’s for health care or retirement, is instead swept into the General Fund when there is a surplus,” Montell said. “That excess money should be going back to our employees to help reduce the unfunded liabilities within their pension systems, which is why I filed this legislation for the next session.”
The other 25 percent of excess funds would remain in the Public Employees’ Health Insurance Trust Fund, according to the release. Montell’s bill is being co-sponsored by Republican House Leader Jeff Hoover and several other members of the GOP House caucus.