Judge Rules Kentucky Pension Bill Unconstitutional; Appeal Likely
A judge has struck down changes made to Kentucky’s pension systems earlier this year, ruling that lawmakers violated the state constitution by rushing the bill to passage in a matter of hours.
The challenge is the latest in a series of legal disputes between Democratic Attorney General Andy Beshear and Republican Gov. Matt Bevin.
On Wednesday Beshear called the ruling a “win for open, honest government.”
“An 11-page sewer bill should never turn into a 290-page pension bill — and passed in six hours. Legislation should always pass in a way that’s transparent, that the public can participate,” Beshear said.
The pension bill was the subject of massive protests during this year’s legislative session when thousands of teachers and other state workers swarmed the state Capitol.
Republican leaders of the legislature and Bevin said that changing retirement benefits for employees was necessary in order to address the state’s ailing pension systems, which have more than $30 billion in unfunded liabilities.
Lawmakers had initially proposed Senate Bill 1, which would have cut retired teachers’ cost of living adjustments and moved some current workers into less-generous retirement plans, though the bill stalled amid intense protests.
Lawmakers repeatedly said that the pension overhaul was likely dead, but then on one of the last days of the legislative session, a new bill was unveiled and passed out of both the House and Senate within a matter of hours.
The measure was attached to a bill that previously dealt with governance of sewage districts.
Almost all of the provisions applied to future workers — especially teachers — but it still made changes to how current workers can use saved-up sick days to help them qualify for retirement, among other provisions.
Beshear sued Bevin for signing the bill into law, saying that lawmakers didn’t follow proper procedure and that the pension changes violated state worker contract rights.
In his ruling, Franklin Circuit Court Judge Philip Shepherd said that lawmakers didn’t present the bill on three separate days as required by the state Constitution.
He also said that since the bill was technically an appropriation measure it needed a constitutional majority to pass out of the House, but the legislation only received a simple majority of all present members — 49 votes.
Shepherd did not rule that the bill violated contract rights.
In an emailed statement, Bevin's Communications Director Elizabeth Kuhn called Shepherd's ruling "expected in light of his inherent conflict" in deciding the case.
Kuhn said an appeal is "imminent" and she said Wednesday's ruling could have great effects on previous measures.
"The consequences of this ruling are tremendous for Kentucky because hundreds, if not thousands, of bills have previously been passed by the General Assembly using the exact same process as Senate Bill 151," Kuhn wrote. "If all of these bills are now invalidated based on Judge Shepherd’s ruling, our legal system will descend into chaos. For example, cities and counties will go bankrupt without pension phase-in funding, and programs to combat the drug epidemic will be negatively impacted."
Kentucky Education Association President Stephanie Winkler called the ruling a “positive decision.
“We need to quit with corrupt government and we need to start governing the way our citizens expect us to govern,” Winkler said.
This story has been updated.