How much will proposed pension reform cost taxpayers? Gov. Bevin's administration won't release report that could answer that question; budget director says it's not because the numbers, like those released about TRS, are bad
The Courier-Journal, Nov. 13, 2017
Bevin administration refuses to release report on pension bill's cost to taxpayers
Tom Loftus
Gov. Matt Bevin's administration refused to release a report Monday on how much its proposed pension reform bill would cost taxpayers and how it would impact pension plans within the Kentucky Retirement Systems.
The report performed by a consultant for Kentucky Retirement Systems was scheduled to be discussed by the system''s board at its meeting Monday morning.
But John Chilton, Bevin's budget director and a member of the retirement systems' board, told reporters after Monday's meeting that the analysis is preliminary because the proposed 505-page reform bill is still a "draft" and is certain to be changed before the General Assembly votes on it.
"The final bill hasn't been agreed upon," Chilton said. "... It's part of the legislative process. It's information that's preliminary. It's not a final bill."
The decision to withhold the report comes just days after the Associated Press reported that the state's other main pension board — the Kentucky Teachers' Retirement system — released a report on the bill by its consultant that concluded the bill would cost taxpayers an extra $4.4 billion over the next 20 years.
But Chilton said Monday the same type of analysis for the Kentucky Retirement Systems plans was not being held back because the numbers within it were also bad and could further damage legislative support for the reform bill.
"When we release the numbers, we want them to be the right numbers," Chilton said. He said a report on the impact of a reform bill on the Kentucky Retirement Systems plans will be released "whenever the legislature decides to file" a final bill.
Critics of the Bevin bill weren't buying that.
Jim Carroll, president of the advocacy group Kentucky Government Retirees, was upset that the actuarial report on the proposed bill was not released.
"Why do they have a policy that's different than Teachers' Retirement?" Carroll said. "Why would you have a different policy for one retirement system to another? It should be transparent. It should be available to everyone once they verify that the figures are valid. There's no reason to hold that. It's suspicious."
House Democratic Whip Dennis Keene, of Wilder, said, "They are obviously blocking the release of this because the numbers are too bad to talk about. ... But this report should be released. We were told the bill was the bill, and now it's just a draft?"
Later Monday, Amanda Stamper, communications director for Bevin's office released a statement saying Chilton's office is reviewing the report "which is clearly marked as a 'draft.' "
Stamper's statement said, "It is standard practice for there to be discussion around a draft report and changes made in the analysis before anything final is used. Once the report is finalized, it will be released."
The board of the Kentucky Retirement Systems is controlled by appointees of Bevin. The board for the teachers' system that released its analysis of the bill last week, is not dominated by Bevin appointees.
After Monday's meeting, Kentucky Retirement Systems Board Chairman John Farris said Chilton had questions about the analysis of the bill by the firm GRS Consulting, of Southfield, Michigan.
"You can ask Mr. Chilton why he has further questions," Farris said.
"The scoring should come out. It should be public," Farris said of the report. "... When we have final numbers we will release those. That may be within the next 48 hours, 72 hours." He said he and Chilton would meet with the consultants later Monday to "understand where we stand."
Bevin was joined by then-House Speaker Jeff Hoover and Senate President Robert Stivers last month in releasing the sweeping pension reform plan, which was later released in bill form.
The plan calls for transitioning Kentucky's teachers and public employees from their traditional pension plans into 401(k)-like plans. It cuts some benefits and requires all state and local government employees and teachers to pay 3 percent more from their paychecks to retiree health benefits. And it would revamp how the state and local governments fund pensions in a way that will require major additional amounts starting next year to immediately begin defraying the combined unfunded liabilities within the systems of more than $44 billion.
Bevin has promised all year that he would call a special legislative session in 2017 for lawmakers to pass pension reform before the next regular legislative session begins Jan. 2.
But the bill has been met with strong opposition from groups representing retirees, teachers, school boards, school superintendents and others.
And time for a special legislative session is growing short for Bevin. While leaders of the Senate Republican majority say the bill has the votes to pass in their chamber, leaders of the House Republican majority say changes are needed if the bill has any chance to pass there.
The pension debate was further complicated by a report in Courier Journal on Nov. 1 that revealed Hoover had secretly settled a sexual harassment complaint by a woman who is on his office staff. On Nov. 5, Hoover acknowledged he had entered a settlement, but denied ever harassing anyone. He resigned his post as speaker, but did not resign his seat as the representative for the House's 83rd District in south-central Kentucky.
Posted: Tuesday, November 14, 2017