LEGISLATIVE UPDATE: June 1, 2008

by State Representative Addia Wuchner

Schools Out, Summers Here… and It Appears We Are Heading Back to Frankfort

Greetings. Our wet spring has produced lush flora and we are moving closer to the arrival of summer. Schools out, pools are open and kids are ready. I hear the cicadas are just across the river, and hope they stay north, as I am not a cicada fan.

Over the past few weeks, I have been visiting Boone County schools attending awards ceremonies, watching band concerts and observing first hand “the emerging future” and all the possibilities our young citizens have to offer. I commend parents, our teachers and school facility for their dedication in assisting these young citizens as they discover the capacity for greatness that lies within each individual as they evolve into the very best versions of themselves. I wish every student a fun and safe summer.

Well folks, it has been a little over seven weeks since the General Assembly adjourned the 08 Session but appears we will be returning to Frankfort . The subject of the likely special session – “pension reform”. Democrats and Republicans, Governor Beshear , Senate and House members, city and county officials… all agree, the state's public pension situation is a train wreck rounding the bend and immediate action is needed. As Governor Beshear stated in his press conference on the issue last week, “we all agree that the failure to pass meaningful pension reform during the last legislative session has made the problem worse…we must act now”.

Prior to the close of the 08 Session, the Senate and House passed pension reform legislation that were very similar but, could reach a final agreement within the pressures of a very contentious budgetary session. Now that the smoke has cleared, all parties appear to be committed to working the final details to a meaningful resolve.

I commend Governor Beshear for his leadership , meeting last week with House and Senate leaders, he urged them to reach agreement on these core components in the next three weeks. Upon agreement, he will call a special session the week of June 23 to take up the compromise bill.

The proposed recommendations to be include in the pension legislation.

• Raising retirement ages for future hires;
• Lowering the cost of living adjustment to 1.5 percent;
• Requiring new employees to contribute 1 percent of their salary to the health insurance fund; and
•   Reforming the practice of double-dipping.

Addressing pension reform requires us to set aside differences, and make the difficult decisions that will preserve a retirement system and at the same time act in a responsible manor to stop the bleed of taxpayers dollars. Our inaction could likely result in possible loss of jobs and interruptions of essential services.

Passage of pension reforms will save nearly $500 million annually to state and local government obligations to fund the pension system. It will also provide city and county governments and school districts with at least $50 million in immediate savings starting July 1.

Additionally, the Governor issued an Executive Order establishing the Kentucky Public Pension Working Group, to address key issues that remain in dispute such as governance of the systems and consideration of new models for future benefits, and how to address unmet actuarial estimates that have occurred over the last ten years. The Working Group will complete their task by October of this year in preparation for the 09 Legislative Session.

In the weeks ahead I will keep you abreast of our progress. As always, your thoughts and input are important so please do not hesitate to contact me if I can be of assistance. Have a great summer!