It’s time, state Sen. Damon Thayer said Saturday, to stop playing children’s games with the state pension crisis.
“We’ve got to make some tough choices. We have kicked the can down the road for far too long, and now the chickens have come home to roost and we’ve got to deal with some of the rotten eggs they’ve laid,” Thayer said at the Georgetown/Scott County Chamber of Commerce’s legislative breakfast.
Thayer, a Georgetown Republican who is the state Senate’s majority floor leader, said Gov. Matt Bevin has proposed a two-year budget totaling $22 billion.
Of that amount, Thayer said, Bevin wants to allocate $3.3 billion for the pension programs covering state and local government employees, including school teachers.
“In 2007, less than 7 percent of the budget went to pensions. In 2018, it’s projected to be nearly 16 percent,” Thayer said.
He also said state Medicaid spending, along with dealing with the pension crisis, “is crowding out other necessary services [the state] provides — money for corrections, money for the judiciary, money for education, money to run the government.”
State Reps. Phillip Pratt (R-Georgetown) and Mark Hart (R-Falmouth) echoed Thayer regarding the legislature’s focus on solving the state’s long-neglected pension funds, which Thayer said would be broke in five years if not dealt with now.
Pratt also noted Bevin’s proposed budget prompted opposition from many organizations because it stripped funding from 70 programs.
“The budget the governor rolled out is a suggested budget. It’s not the budget we will pass,” Pratt said.
“A lot of people talk about those 70 cuts. I don’t have a problem with those 70 cuts — not that they need to be cut, but [the programs need to] defend themselves,” he said.
“I’m not saying we need to make these 70 cuts, but I’m okay with them actually saying ‘This is what we do,’” Pratt said.
The legislators’ audience appeared largely supportive of Bevin’s proposals, particularly his move to tighten requirements regarding Medicaid participation. All three legislators were critical of former Gov. Steve Beshear’s extending Medicaid coverage to 400,000 Kentuckians as part of former President Obama’s healthcare reform.
Beshear’s action increased the state’s financial stress, the legislators said.
But a former Scott County Schools administrator angrily challenged Thayer in particular regarding increased healthcare costs potentially facing retired educators under Bevin’s plan.
“My question is, what are you going to do to protect teacher insurance,” said Zan Rexroat, most recently the retired director of maintenance for the school district.
“I feel very betrayed if the rug is pulled out from under me and my wife after we’ve worked all these years, and now we’re on a fixed income,” Rexroat said.
“We’ve been led down this path. I know it’s not, as Damon said, in the inviolable contract,” he said.
“Mr. Pratt said we are not the enemy. Well, if it’s going to cost my family $115,000 for health insurance that I thought was provided over the next six years, it seems to me like I’m being made the enemy,” Rexroat said.
Thayer responded that, indeed, health care for public employees is not part of the guarantees extended to them for their commitment.
“Kentucky does provide a significant piece of funding in the budget to pay for retired teachers’ health care. Not every state does that,” Thayer said.
“When the governor recommended that we cut that several hundred million dollar subsidy for teacher health care, he did that because he knows it’s outside the inviolable contract,” Thayer said.
“He probably also knew that’s something we would not stick with,” Thayer said, indicating the legislature will likely retain funds for retired teachers’ health care.
“I do think it is reasonable to ask public sector employees to pay a little more for their health insurance. In the private sector in the last six to eight years, everybody’s been dealing with double-digit increases year after year after year,” Thayer said.
“Do I think we should eliminate [health insurance for public sector employees]? We could legally, but I don’t think that morally it’s the right thing to do, and we probably won’t,” Thayer said.
Panel moderator John Cooper, a Georgetown resident who is a Frankfort lobbyist, noted the state’s pension issue is a long-term problem that will take 20 years to correct.
Regarding other bills under consideration, the legislators heard from Scott County Magistrate David Livingston in opposition to House Bill 227, which he said would negatively impact the solar-power industry.
“I have several friends in the industry… Right now under the current legislation, only 18,000 homes are allowed to have solar with the net meter. Currently, there are less than 1,000,” Livingston said.
The bill, he said, would be “ruining a business not only from a distribution and production standpoint, but they’re also ruining a market for renewable energy that some folks would like to take advantage of,” he said.
He also urged Thayer not to support a Senate bill that would eliminate requirements for teachers to seek master’s degrees as part of their certifications. Livingston noted the bill would have a negative impact locally — beyond helping put better teachers in classrooms — by reducing participation in Georgetown College’s masters program in education.
Cooper noted the legislators will return for a second legislative breakfast on March 10.
Dan Adkins can be reached at firstname.lastname@example.org.