October 23, 2017 9:08pm
Guest Post: Kentucky’s Pension Crisis Must Be Solved
By Governor Matt Bevin
As governor, I am committed to running a fiscally responsible government that provides a better place for employers to grow, prosper and create jobs. One of the greatest impediments to Kentucky’s economic success is our pension crisis. Although a few sounded the alarm over the years, kicking the can down the road became the status quo and led to a pension liability that is more than seven times greater than the amount of the Commonwealth’s entire General Fund. We now have leadership in Kentucky that not only understands the magnitude of this issue, but also is willing and ready to solve it.
Kentuckians can no longer afford to bury our heads in the sand. Our pension crisis threatens adequate funding for education, workforce training, roads and bridges, public safety, healthcare and other services critical for a vibrant business community. It has led to a repeated downgrading of our credit rating and has increased our cost of borrowing. With the help of our Senate President and new House Speaker, this administration has developed a fair and equitable plan to solve this problem. I will soon call a special session of the Kentucky General Assembly to pass this plan into law.
This comprehensive pension reform plan, “Keeping the Promise,” is simple. First and foremost, it will fulfill our moral and legal obligation to uphold promises made to public employees and teachers while simultaneously ending any continued fiscal abuse of these systems. Additionally, it will stop digging a deeper liability hole by offering a mandatory defined contribution plan for future employees, comparable to those typically offered by private employers. “Keeping the Promise” will look honestly at unfunded liability, rather than simply hiding it or allowing politically motivated or unqualified boards to manipulate funding models. This will ensure we pay off the debts incurred while limiting future growth of these debts.
This plan was developed after reviewing an extensive multi-stage study by a reputable, pension-consulting firm, months of listening to feedback, and multiple meetings with stakeholders, financial experts and lawmakers. It is a financially prudent and fair plan that will meet our obligations to current and retired teachers, firefighters, police officers and other public servants. It will also set Kentucky on a fiscally sustainable path and will clear the way for more investment in the component of our economy that matters most – our employers.
As a businessman who deeply cares about the direction of our great state, I ask you for your support. Failure to act will result in the collapse of the entire pension system. This is not an acceptable option.
Please call your legislators immediately and tell them to support this plan. They will undoubtedly be hearing from those for whom this solution is a threat to their political power and from those who have intentionally been misinformed. They also need to hear from their local employers.
With one call to the Legislative Message line at 1-800-372-7181, you can make sure your State Senator and State Representative know how important this is. You can identify your personal Representative and Senator at: www.lrc.ky.gov
Now is the time for action. Help secure Kentucky’s financial future by calling your legislators today.
(For more information about this issue and specific details on the “Keeping the Promise” plan, visit www.KentuckyPensions.com)