Bill cutting teacher benefits advances in Kentucky
By ADAM BEAM
Mar. 07, 2018
FRANKFORT, Ky. (AP) — A bill cutting benefits for retired public school teachers cleared a key hurdle in the Kentucky legislature on Wednesday over the loud protests from educators chanting: "Vote them out!"
A state Senate committee voted 7-4 to advance Senate bill 1. It's the first step for the bill to become law. If approved by the Senate and House of Representatives, retired teachers would see their annual cost-of-living raises cut by 33 percent for the next 12 years or until the system is at least 90 percent funded.
A consulting firm hired by the state says the changes would save taxpayers roughly $3.2 billion over the next 20 years. Most of those savings would come from changes to the Kentucky Teachers Retirement System.
The raises are "cost of living adjustments" given annually to retired teachers, who cannot receive Social Security benefits. Retirees like Meg Judd said teachers depend on those raises to keep up with rising expenses.
"I'm only given this amount of money to live on, so I've got to stretch it as far as I can," she said while wearing a sticker declaring "My family and I will remember your vote."
Other changes include not letting teachers accumulate sick days past July 1, meaning they can't use them to boost their benefits when they retire. The bill would change the formula for teachers who have worked less than 20 years, encouraging them to work longer to get more generous benefits.
The bill also saves money by shifting some of the costs to local school districts. The change would come at a time when some districts are dangerously close to insolvency because of other funding issues.
But the state's Republican leaders say the pension systems would likely fail without the changes. Kentucky has one of the worst funded public pension systems in the country. The state is at least $41 billion short of the money required to pay benefits over the next 30 years.
Last week, the House of Representatives approved a two-year budget that would put more than $3.3 billion into the pension system, or nearly 15 percent of all state spending.
"If we miss this opportunity to save the systems, we may not get another chance before it is too late," said Republican Sen. Joe Bowen, the bill's chief sponsor.
The proposed changes come during a time of increased tensions in public education. Thousands of teachers in nearby West Virginia went on strike recently in an effort to secure a 5 percent pay raise. Lawmakers there eventually agreed, but not before schools were closed for days.
Teachers and staff at 28 schools in eight central Kentucky districts plan a "walk in" protest Thursday morning, where they will gather outside of their schools and walk in together. Brent McKim, president of the Jefferson County Teachers Association that represents the state's largest school district, said leaders hope to avoid a strike, but added: "Anything is possible."
Asked if he was worried about the possibility of a strike, Kentucky Republican Gov. Matt Bevin said: "The reality is this, I'm saving the pension system. If they're upset about it, it's because their either ill-informed or willfully blind. I think the vast majority of teachers are none of the above."
Many teachers and other public workers acknowledge the system is in bad shape, but they say lawmakers should find new money instead of cutting their benefits. Cheers erupted from educators in the audience Wednesday when one Democratic lawmaker suggested legalizing casino gambling and putting all of the taxes collected into the pension system.
But Bevin and others have said casino gambling and other revenue raising measures would not pass.
Democratic Attorney General Andy Beshear sent a letter to lawmakers on Tuesday, saying the bill is illegal and the state would likely lose a court challenge. But Republican Senate President Robert Stivers was undeterred. He said the bill would pass the Senate, likely in the next few days.
Bruce Schreiner contributed reporting from Versailles, Kentucky.