Ky. Senate Pulls Back Reins On Teacher Pension Bonding Proposal
Should the state bond $3.3 billion to shore up the troubled Kentucky Teachers Retirement System now or wait nine months to study the issue? That was the question before the state Senate Tuesday and the vote suggests lawmakers remain divided over how to move forward.
With a $14 billion dollar shortfall looming and a system with just over half of the funding it needs to cover teacher benefit obligations, lawmakers agree action is needed. But the Republican-led Senate wants to see a 12-member bipartisan panel study the problem before the state agrees to authorize its largest-ever bond issue.
Lexington Democratic Sen. Reggie Thomas and Republican Majority Floor Leader Damon Thayer exemplify the split over strategy.
"We've got to stop the bleeding. We've got to stop the red ink. And we've got to move KTRS toward solvency," Thomas told his colleagues.
"There is no immediate crisis in the KRTS system," Thayer later countered. "Checks are still going to be cut, they will be cashed, and they will clear the bank."
Bonding advocates argue the state must act now to take advantage of favorable market conditions and waiting could cause Kentucky to lose out on significant investment earnings, while opponents want to initiate a task force like the one that helped shape 2013’s comprehensive pension reform package.
Speaker Greg Stumbo told reporters Tuesday the chambers could go to conference and work toward a compromise, adding, "We want to make sure that the fund is financially sound and we're willing to listen to some of their suggestions on reforms if they're willing to do something on the financial stability side."