CORRECTION: Due to an internal miscalculation of the state’s final budget numbers, Kentucky President and CEO Dave Adkisson stated in the recent KET interview that KTRS is receiving 80 percent of the amount they need from the state legislature to reach the full actuarially required contribution (ARC). According to updated figures, that number is actually 94 percent of the ARC.
On Sunday, Kentucky Chamber of Commerce President and CEO Dave Adkisson and Kentucky Center for Economic Policy Executive Director Jason Bailey sat down with KET’s “One to One” host Bill Goodman to discuss the 2016 legislative session.
Discussing an overview of the legislative session which wrapped up earlier this month, Adkisson stated he believes the General Assembly accomplished a lot of great things in this 60 day period—including working to address the state’s pension crisis and passing many key business initiatives.
“Generally I think it went very well, perhaps the most productive session I’ve seen in my 11 years back in Kentucky,” Adkisson said. “We characterize the budget as the most politically and financially responsible budget in a long time, primarily because it was built around the pension crisis and that problem had to be acknowledged.”
Adkisson noted the budget that passed the General Assembly will send a very strong message to Wall Street that Kentucky is getting its financial house in order and “addressing head on our pension problem and we plan to honor our commitment to the retirees.”
“Sure there was some pain in some other parts of the budget but that inevitable, this day was coming and we feel very good about the overall product,” Adkisson added. “We felt that the cuts to higher education were unfortunate when 9% was proposed and we wrote letters to the legislators hoping to soften it and sure enough it was cut in half. It’s unfortunate but part of that is the reality of where Kentucky is financially right now.”
During the legislative discussion, it was stated that it would be nice to think the state could move on beyond pensions but Adkisson said he doesn’t believe the state is quite there yet.
Adkisson said that while the funding put toward pensions in the budget is a substantial down payment on the problem, the funding for the teachers retirement systems is only 80% of the actuarial required contribution. Because of this, Adkisson said more work will have to be done in the coming years to address the state’s woefully underfunded pension systems.
A key transparency bill pushed by the Chamber was Senate Bill 2, legislation that would have prohibited certain types of activities and would have brought retirement system employees under the state personnel cabinet and more. On the final day of the 2016 session, Senate Bill 2 was joined with two other transparency bills supported by the business community, one related to area development districts and another relating to legislators pensions. The package of three bills was called the “super transparency” bill and failed to see passage on the very last night as it was not taken up in the House.
“While I congratulate the legislature on putting more money into the pension problem and acknowledging that reality, several major opportunities to reform the system were lost because of influence,” Adkisson said.
Adkisson discussed another big win for the Kentucky Chamber this session, Public-Private Partnerships (P3), which creates a clear, transparent process for P3s, which will enable increased private investment in state and local infrastructure projects.
“It allows capital to flow into the state for economic development projects. It was great, with bipartisan support. Probably the greatest win for the business community and the general public,” Adkisson said.