After Gov. Matt Bevin’s special legislative session on pensions abruptly ended on Tuesday, Louisville’s chamber of commerce says it hopes the incoming legislature quickly makes changes to the pension system when lawmakers return to Frankfort in January.
Legislators voted to adjourn the special session a little less than 24 hours after Bevin summoned lawmakers to Frankfort after it became clear that a consensus on a pension bill couldn’t be reached before the end of the year.
Sarah Davasher-Wisdom, chief operating officer of Greater Louisville Inc., said that addressing the state’s massive pension debt is a top concern.
“We were very disappointed earlier this week when the General Assembly wasn’t able to come to an agreement on pension reform, but we are hopefully that in early 2019 this is the number one priority,” Davasher-Wisdom said.
The recently-adjourned special legislative session called by Bevin came after the Kentucky Supreme Court struck down a pension law that passed out of the legislature earlier this year.
Kentucky has one of the worst pension debts in the nation with about $38 billion in unfunded liabilities, which has crunched other parts of state spending ranging from higher education to infrastructure.
Gov. Matt Bevin and Republican leaders of the legislature have proposed addressing the pension debt by trimming retirement benefits for future workers and some current ones while also pumping more money into the pension systems.
To pay for larger transfusions into the pension system, Bevin has made across-the-board cuts to state government and demanded increased contributions to the pension systems from local governments, agencies and universities.
Republicans have largely ignored calls for revenue-raising measures like legalizing casino gambling, raising taxes, or eliminating some of the $13 billion in tax breaks the state gives out each year.
Democratic Louisville Mayor Greg Fischer told an assemblage of business leaders at the chamber event that cities across the state can’t provide the same services while paying escalating pension contributions
“Without new revenue sources, we’re looking at significant cuts in services, police services, firefighting services, trash pickup all these things that we take for granted and rely on day in and day out,” Fischer said.
Earlier this year, the legislature passed a combination of tax hikes and cuts, including an expansion of the state’s sales tax to 17 new services, that Republican leaders said would raise about $480 in new revenue.
There will be 32 new lawmakers sworn in when the next legislature begins on Jan 8. Since 2019 is not a budget-writing year, it would take a three-fifths majority in each chamber to pass any bill that deals with the budget or revenue.