$3.3B Pension Plan Moves To House
House Speaker Greg Stumbo’s plan to shore up the ailing Kentucky Teachers Retirement System received a warm reception in committee Tuesday, but the bill face more questions as it moves to the House floor.
Stumbo is proposing that the legislature borrow the largest amount of money in state history –$3.3 billion dollars – in order to take advantage of favorable interest rates and ease the KTRS funding burden on future General Assemblies. It’s a number he knows will raise a few eyebrows.
"You shouldn't be scared of that fact. The question is: Is the market favorable? Is the plan sound? And will it bring stability to the fund? And the answer for all three of those questions is yes," he told reporters.
Advocates liken the plan to refinancing a mortgage, but critics prefer the analogy of adding more debt to a credit card. Republican Rep. Addia Wuchner, who passed on the House Appropriations and Revenue committee vote, suggested that lawmakers put more time into figuring out how to finally remedy the $14 billion dollar shortfall.
"I'm concerned about the debt. Probably if we looked at $1.5B annually to shore up all those retirement systems, at some point in time... we can't kick this down the road," she said.
And the bonding measure faces an uphill climb as well – with a supermajority required to pass it.