FRANKFORT, Ky. (AP) — Two western Kentucky lawmakers will lead the debate over how to restore financial solvency to the state's pension system for government retirees.
The House selected Democratic state Rep. Brent Yonts of Greenville on Friday to serve as chairman of the State Government Committee, which has oversight of the state's pension plans and their $33 billion unfunded liability.
Earlier this week, the Senate chose Republican state Sen. Joe Bowen of Owensboro to serve as chairman of its State and Local Government Committee, which also is working on the pension issue.
For the past year, lawmakers have been focused on shoring up the state's pension system. A legislative task force that spent months studying the issue recommended pumping in more money without saying where the money would come from.
The task force rejected a proposal by the Pew Center on the States to issue bonds to cover the cost, but its members suggested two options that could help: repealing cost-of-living increases for retirees and moving state employees to a hybrid plan similar to a 401(k) that blends defined benefits with defined contributions.
Yonts hasn't ruled out bonds as a means of paying down the pension deficit, suggesting Friday that the proposal may be resurrected.
"The reason why I think we should seriously look at and do some form of bonding, maybe not for the full amount, is to ensure that whatever revenue stream we create to pay for the debt is not taken away by the next Legislature," he said. "Bonding locks it down, and locks out the possibility."
Bowen opposes bonding.
"I am not for borrowing money to pay off a debt," he said. "That's not sound fiscal policy."
Gov. Steve Beshear has called on lawmakers to pass tax reforms that could generate additional revenue to be applied to the pension system. A group of experts appointed by Beshear to review the state's tax code proposed a model that would generate about $690 million a year in additional revenue.
Bowen said he's confident the Senate and House will reach agreement on a pension plan for employees who he said "are fearful that one day they'll wake up and their pension will be in jeopardy."
"As everyone knows, there's been a multitude of reasons these pensions have gotten into the shape that they are in," Bowen said. "What we're here to do is resolve the problem. To point fingers, to place blame, that's an exercise that we don't need to engage in."
Yonts agreed, saying lawmakers recognize the dire circumstances.
"Everybody says it should be done during this session, and if we don't pass something during this session, the public will be outraged," he said.