Previous Story
Legislative update from State Representative Regina Huff
Posted On 26 Jan 2018
Regina Huff, 82nd District State Representative
On Tuesday, to mark the official kick-off of crafting Kentucky’s two year budget, Governor Matt Bevin presented his budget proposal to the Commonwealth and the General Assembly in a Joint Session. Kentuckians, along with members of the House and Senate, Cabinet Secretaries, and Supreme Court Justices, listened intently for what many feared would be one of the trimmest, most austere budgets in recent Kentucky history.
As has been widely reported, Kentucky’s public pensions are facing insolvency and posing a threat to funding for other areas of the budget. In a historic move, Governor Bevin’s key budget proposal is to fully fund the public pension system, setting aside more money than ever before to keep the commitment Kentucky has to teachers and public workers. Almost 15 percent of the state budget will go toward shoring up the worst funded pension system in the country, I am incredibly proud to support that obligation.
In lock-step with his commitment to fully fund pensions, Governor Bevin made it clear that we intend to strengthen K-12 education and ensure that our children do not pay for the sins of governments past. The Governor proposed to fully fund the SEEK (Support Education Excellence in Kentucky) formula, maintaining the $3,981 per-student funding approved in 2016.
Adoption and foster care reform, as many of you know, has been a major focus of both the legislature and the executive branch. Governor Bevin’s budget will dedicate $10.8 million to help children who desperately need families. Another $24 million will go to the Department for Community Based Services in order to hire more social workers as well as increase their pay, along with supervisors.
Kentucky faces an opioid scourge second to no other state in the country, and the erosion to communities and families as a result is devastating. In his budget address, Governor Bevin proposed earmarking $34 million to combat Kentucky’s opioid epidemic, with a significant portion pledged to helping pregnant mothers who suffer from addiction.
In order to fully fund public pensions and K-12 education, some programs are going to see cuts and possible elimination in the Governor’s budget. However, instead of the predicted 13 percent cuts across the board, most agencies will see significantly lower cuts of approximately 6.5 percent. Like the majority of you, I am not happy about any budget cuts and program elimination, but to fix the pension crisis the options are very limited. In the face of cuts, I will pledge to proceed diligently and make thoughtful, well-informed decisions only after hearing from interested stakeholders – which are Kentuckians like you. Regarding the Governor failing to line item funds for retired teacher’s health care, it is important to note, the fund has a sustainable balance at present, that could cover the cost of retirees insurance over this two year biennium. Please remember, this is a process and the first step is the Governor’s proposal. Presently, nothing is set in stone.
Further, in his address, Governor Bevin discussed the need for comprehensive tax reform, including comprehensive modernization of our tax code to place Kentucky in a position to compete with surrounding states, for jobs and residents.
Recently, Kentucky was the first state to receive a waiver from the Trump administration in order to implement changes to the Kentucky HEALTH program. These changes will empower able-bodied working-age Kentuckians to make their own healthcare decisions, while retaining current Medicaid benefits for our most vulnerable citizens, including children, pregnant women and the disabled, among others.
Now that Kentucky has received Governor Bevin’s budget proposal, the House can get to work on formulating our own budget. During that process, some of the Governor’s proposals will be included, and some of them won’t. Our budget committees will continue to hear from stakeholders and will work together with the public to do what is best for the people of this Commonwealth to ensure that essential programs have the resources they need to function at full capacity. As the coming weeks unfold, please make your voice heard in the process for crafting the next two-year budget – after all, it is your state, your future, and your money.
There is no higher honor for me than to serve as your representative in Frankfort. As always, I welcome your comments and concerns on any issues impacting our Commonwealth, even while we are not in session. I can be reached through the toll-free message line in Frankfort at 1-800-372-7181, or you can contact me via e-mail at regina.huff@lrc.ky.gov. You can keep track of committee meetings and potential legislation through the Kentucky Legislature Home Page at www.lrc.ky.gov. As always, you can reach me on my personal cell@ 606-524-0227. Please leave a message, and I will return your call.
One Comment
Leave a Reply
You must be logged in to post a comment.
The public pension system will always be a drain on the Kentucky budget. State and local government employees are allowed to retire too young requiring in some case 30 or more years of retirement benefits. They contribute too little toward the fund in relation to what they withdraw.
One instance that I am familiar with the individual retired at 55 and receives over $50,000 annually in retirement benefits which doesn’t include health care. Looking over the career contributions the level may have reached $200,000 dollars, but I doubt it. Calculating the amount needed to fund this one retirement for thirty years will take 1.6 million dollars. The contributions, the pathetic return on contribution investments and the state match when made doesn’t come close to covering the cost. And how many of these individuals are there that need this level of funding in retirement?
The assumption based formula to calculate benefits is a failure. It is based on what will happen in the future. I admit most actuaries are smart but they are not psychics, they can’t predict 30 years into the future. Contrary to belief, public pension funds are invested into the same stock markets as contributions into funds held in 401K accounts. One big positive for 401K holders, in the event of a market correction, 401K account holders can move account balances into investment vehicles considered to be safe havens to eliminate losses. Some of those would be bond funds, retirement trusts and one of many tax exempt government funds. Public pensioners have no such option, they have to ride it out and the unfunded liability goes up. The they demand that the state legislature force taxpayers to fund the shortfall.
It’s time public service workers to accept responsibility and accountability for their own retirement planning like the rest of us. They are after all grown-ups or should act like one. With just a small amount of training and workshops in managing a 401K plan would be no more difficult than balancing a check book.
Due to the fact that defined benefit plans are pretty much a thing of the past in the private sector, it is a must that Kentucky add investing and managing retirement accounts into the high school curriculum or they well fail at retirement. Without pension reform they will need to know how to save and manage their own retirement account plus finance someone else’s through the public pension system. Or, learn how to possibly live off of 7-8 hundred dollars per month and help finance public pensions at the same time.
It does the 90% in the private sector a disservice to force them to finance the retirements of the 10% in the public sector. The are not royalty and we owe them no homage. It is ridiculous to ask the legislature to force the 90% of taxpayers in the private sector to anti up for the shortfalls and failures of the Kentucky Public Pension System.