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Kentucky Senate Budget Calls For Teacher Pension Changes

Frankfort Capitol Building
Frankfort Capitol Building

Republican leaders of the Kentucky Senate have unveiled their version of the two-year state budget. Like the version passed by the state House of Representatives last month, it scales back some of the programs proposed by Democratic Gov. Andy Beshear.

It also includes a provision that would add about $1.1 billion into the pension fund for teachers over the next two years, but only if the legislature weakens retirement benefits for future teachers.

Sen. Chris McDaniel, a Republican from Latonia, said that the Senate budget would fund the teacher pension fund at the required amount, but won’t go above that without changes.

“If we’re going to provide funding above and beyond that, a structural change at least for new hires would have to be accomplished,” McDaniel said.

McDaniel said he thinks lawmakers could pass such structural reforms before the legislature adjourns.

Similar changes have been proposed in recent years. A pension overhaul passed in the 2018 legislative session but was ultimately struck down by the state Supreme Court on procedural grounds.

The Kentucky General Assembly is meeting amid the coronavirus pandemic, one of the only legislatures in the country to do so.

Leaders of the Republican-controlled body and Gov. Beshear have implemented crowd restrictions in the Capitol, meaning that only lawmakers, essential staff and reporters are present for proceedings.

Shortly after the meeting, Kentucky Education Association President Eddie Campbell took to Facebook live to say he felt like he had been “slapped in the face.”

“We don’t need to be making these decisions when the voice of educators, the voice of the public, the voice of the citizens of Kentucky aren’t there to make sure that your concerns are being expressed,” Campbell said.

The budget bill raises SEEK, the funding formula for public schools, to $4,161 per student, the highest rate in history.

The budget does not include Beshear’s proposal for a $2,000 per-year across-the-board raise for teachers, though McDaniel said the amount was included in the inflated SEEK rate for local districts to use at their discretion.

“I’ve had a lot of people come and say ‘we just did a raise,’ or ‘this as it flows out is going to hit me differently,’ or ‘I need more flexibility,’” McDaniel said.

“By and large this reflects our intent to give as much flexibility locally as possible.”

The budget also includes $250,000 per year for the Norton Hospital poison control hotline, which is now running Kentucky’s coronavirus response hotline.

Sen. Morgan McGarvey, a Democrat from Louisville said the hotline currently costs about $500,000 per month and needs more assistance.

“I think as a state, it’s incumbent on us to find funding for this essential service, ” McGarvey said. “And as we watch what’s happening around the world, it would not surprise me to see that call volume increase.”

Amid the economic downturn that has resulted from the coronavirus epidemic, McDaniel said that budget writers need a new estimate of how much revenue the state is going to make over the next two years.

Economists already predicted that Kentucky revenue growth would be lackluster over the coming years.

Sen. Tom Buford, a Republican from Nicholasville, predicted that state revenue would drop dramatically.

“I think we can follow our economy pretty much where the stock market is headed,” Buford said. “We could be down a billion dollars in revenues and I think that’s a conservative estimate.”

Kentucky brought in $11.4 billion in revenue last year.

McDaniel said the Senate would likely take up the state’s two-year revenue bill tomorrow.

The House and Senate leaders have said they hope to pass the final version of the budget sometime next week.

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