The lawsuit against Kentucky’s new pension law will be heard by the Supreme Court of Kentucky on Thursday, pitting Kentucky’s two preeminent political rivals against each other and putting retirement benefits for thousands of teachers and state workers in the balance.
The pension changes were passed during this year’s legislative session amid massive protests and were blocked by a lower court, which ruled that lawmakers violated the state constitution by rushing the bill to passage during a matter of hours.
Democratic Attorney General Andy Beshear sued to block the changes and Republican Gov. Matt Bevin is defending them.
In a legal brief, Beshear called the process that lawmakers used to pass the law “government at its worst.”
“…[R]ushing legislation through without any public comment, without the required analysis on whether it would work, without giving legislators the time to read it, and without the necessary number of votes,” Beshear wrote. “The Kentucky Constitution explicitly prohibits this process.”
The pension battle is one of eight legal battles between the two officials, who so far are the only people to announce they’re running for governor next year.
The hearing will be aired statewide on KET — the first time arguments before the high court have been widely broadcast in nearly 30 years.
The pension changes mostly affect future state employees but also tweak benefits for some current workers.
The blocked law would change how current workers can use saved-up sick days to qualify for retirement and require employees hired between 2003 and 2008 to pay one percent of their salaries for retiree health insurance.
Future teachers would no longer receive defined benefit pensions, instead receiving “hybrid cash-balance” plans that rely on stock market growth but are guaranteed to not lose money.
Some state workers hired since 2014 would also have the guaranteed rate of return into their hybrid plans reduced from 4 percent to 0 percent.
Did Lawmakers Break The Rules?
At issue in the Kentucky Supreme Court hearing is whether lawmakers broke the law by employing frequently-used procedures that allow them to pass bills quickly at the end of a legislative session.
One of the procedures used by lawmakers is to strip a bill of its contents and replace it with new language in order to avoid holding additional public hearings late in a legislative session.
The other is to waive the requirement that bills be formally presented on three separate days before they are eligible to be voted on by the full state House and Senate.
Specifically, Republican leaders of the legislature emptied out a bill dealing with the governance of sewage districts that had already passed out of the Senate and filled it with 290 pages of changes to the state’s retirement systems.
With supermajorities in both chambers of the Kentucky legislature, Republicans quickly passed the bill within about 6 hours by voting to waive the readings requirement.
In a legal brief filed last week, Bevin’s general counsel Steve Pitt argued that if the Supreme Court rules lawmakers passed the law improperly, it could imperil laws passed using the same methods.
“Through this ill-advised tactic, the Attorney General is inviting this Court to create a constitutional crisis by declaring that the legislature's age-old process of passing committee substitute bills is actually unconstitutional,” Pitt wrote.
“This invitation, if accepted, will upend the operation of the General Assembly and draw into question the validity of hundreds — if not thousands — of laws.”
The lower court also ruled that the House of Representatives neglected to do a financial impact analysis and didn’t have enough votes to pass the legislation because it was technically an appropriation bill, which needs to receive a majority of each chamber’s members in order to pass. The pension bill passed with only 49 votes in the 100-member House.
The last time a Kentucky Supreme Court hearing was broadcast across the state was arguments ahead of the landmark Rose v. Council for Better Education decision in 1989, which ruled that the state's funding model was inequitable and unconstitutional.
The ruling led to the Kentucky Education Reform Act, which passed in 1990.
