Courier-Journal takes a look at HB 299
FutureShockSquare
The severity of Kentucky's pending pension disaster is finally getting attention in Kentucky's largest newspaper. This week, Courier-Journal columnist John David Dyche delved into the effects of The Kentucky General Assembly's 2005 House Bill 299.
From Dyche's article:
HB 299 reduced the number of years legislators had to serve before drawing a penalty-free pension prior to age 65, allowed legislators to join the plan late, and changed the salary multiplier from the average of the “high five” years of compensation to the “high three years.” Most significantly, though, the bill enacted “reciprocity.”Under reciprocity, Reese explains, instead of using their salaries as part-time legislators to calculate their pensions, legislators can use “their full-time salary in another state or local government job held either before or after they left the legislature.” He provides several staggering examples, including legislators who voted for reciprocity and now enjoy its very lucrative benefits.
Dyche's information was pulled from a recent advertisement in The Kentucky Gazette titled "The Unsustainable: Kentucky's Public Employee Pension Systems" by Lowell Reese. The article in The Kentucky Gazette was based largely on the report Reese authored for the Bluegrass Institute, "Future Shock: Kentucky Politicians' Opulent Pensions Have Become A Modern-Day Gold Rush."
I am glad to see the spotlight finally shining down on the practice of "reciprocity" as it is one of the key factors in public pension abuse. This pension enhancement has contributed to what Reese calls a "societal issue":
From The Bluegrass Institute's Future Shock:
Public employee pensions are now a societal issue: the standard of living of all Kentuckians is at stake.
The serious implications of dealing with a pension debt extend far beyond trimming back benefits for public-sector workers and retirees. The pension debt is nearly four times the size of the commonwealth’s General Fund budget. It’s a debt that must — and will — be paid, because public employee pensions, under the laws of the commonwealth, are inviolable contracts, arguably guaranteed by the U.S. Constitution, in Article I, Section 10, the Commerce Clause.
The pension debt is rising, and is expected to reach $40 billion or more later this year, when a new Governmental Accounting Standards Board (GASB) rule on reporting pension debt goes into effect.
I applaud the Courier-Journal for publishing Dyche's article. This is information that all Kentuckians deserve to know because as Reese reminds us: Public employee pensions are a societal issue.