Legislative leaders provide outlook on budget, pensions and other legislative expectations

Ahead of the 2016 session, legislative leaders spoke with the business community about what can be expected when crafting a budget and working to address the pension crisis in a new political environment with a new administration and a limited amount of dollars for some big ticket issues.

House Speaker Greg Stumbo and Senate President Pro Tem David Givens joined the Kentucky Chamber’s Legislative Preview Conference Monday in Lexington where the main topic of conversation was the significant needs of the pension systems in the state.

Both legislative leaders expressed support for audits of the state’s pension systems, including the comprehensive performance audit of the Kentucky Retirement System called for by the Kentucky Chamber.

Stumbo said he believes the auditor has the ability to charge the system for such an audit and said it needs to be done. Givens agreed by stating that the Senate is very supportive of the idea and believes both systems need to be audited, adding that transparency of the systems will be a key for his chamber this year as they introduce legislation to bring more accountability to the systems.

Discussing funding solutions for the pension systems, Speaker Stumbo brought up his proposal from the 2015 session to bond $3.3 billion dollars to give the Kentucky Teachers’ Retirement System an influx of cash as they reach what the system has called a “tipping point.”

The issue went into conference committee at the end of the session as the House wanted to pass the large bond amount while the Senate wanted to make some structural changes to the system.

In terms of what can be expected during the 2016 session on the issue, Stumbo said he will be reintroducing the idea of bonding. The House Speaker said the $3.3 billion figure is a big one and seemed to express some willingness to work with the numbers but believes it is necessary to help the system.

On the idea of bonding, Givens said while additional funding will be necessary to solve the woes of the pension systems, he does not believe bonding $3.3 billion is the logical solution.

While changes for future hires are considered to shore up the Kentucky Teachers’ Retirement System, Givens stated that any cut in benefits should be coupled with finding a way to raise teacher salaries in order to keep the profession competitive and ensure the state has talented teachers in the classroom.

Additionally, Givens said he is pleased with the fact that the Senate’s agenda lines up with that of the Chamber for the upcoming session.

Among those priorities, Givens discussed the four pillars contained in the Chamber’s new vision document. Starting with workforce, the Senate president pro tem said he is looking forward to working on legislation to improve the state’s workforce.

Givens also said the Senate is focused on creating a sustainable state government through the budget process and more in the 2016 session while also focusing on aggressive job creation.

As for infrastructure, Givens brought up the vote on the road fund taken in the 2015 session calling it a tough vote for some members but the right decision to make. He also said one member of his caucus is considering filing the public-private partnership legislation on the Senate side this year and said he feels that is something that should be done and passed.

During his segment, House Speaker Stumbo talked about the issue of expanded gaming and stated it already exists in Kentucky but the money is not coming into the General Fund to be used on important issues and said he will be looking to fix that.

Stumbo said he will introduce legislation to provide a constitutional amendment on the issue that will include details on where the casinos go and where the revenue will be dedicated which he suggested would be pensions and education.

Previously, Stumbo announced that he would have a gaming bill this session and said he will make sure the revenue goes to solving the pension crisis.

Categories: 2016 General Assembly, Pensions, Politics

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