It was a big day for a colossal issue facing the legislature as the short session enters the home stretch: how to manage the vast and growing unfunded liability in the Kentucky Teachers’ Retirement System. House Bill 4 proposes a $3.3 billion bond issue for KTRS. Thes measure, sponsored by House Speaker Greg Stumbo (D-Prestonsburg), passed the lower chamber on February 23.
Senate Republican leaders have telegraphed their reluctance to approve the bonding proposal, questioning its impact on the state’s credit rating and ability to borrow in the future. During floor debate, Senate President Robert Stivers (R-Manchester) called for a different approach before jumping into more debt.
Stivers proposed a bipartisan task force composed of six House members and six Senators who would be charged with making recommendations by the end of the year to improve the teacher pension system.
But Democrats have argued that current low interest rates provide the right conditions to issue the bonds. They contend the money could be borrowed at 4.5 percent interest and reinvested at 7.5 percent, with the proceeds going to the teacher pension fund. Minority Floor Leader Ray Jones (D-Pikeville) agreed with Stivers’ idea to gather more information, but also said KTRS needs a huge infusion of cash in the short term.
When the Senate State and Local Government Committee considered the matter yesterday, Stivers said bonds to shore up KTRS could still be issued after several months of study. Majority Floor Leader Damon Thayer (R-Georgetown) defended the proposal for a legislative review panel and warned about the hazards of borrowing money as a short-term solution.
In explaining his vote against the Senate-amended HB 4 in committee, Sen. Dorsey Ridley (D-Henderson) expressed the consensus of Democrats that gutting the proposed bond issue is a missed opportunity.
Along party lines, the Senate panel approved the changes to HB 4 to strip the proposed $3.3 billion bond issue and replace it with a study of KTRS. The amended bill now advances to the full Senate for consideration.
More Campaign Dollars from Donors
The Senate yesterday approved a bill originally created to address campaign finance reporting but that now doubles the amount of money a donor can give a political candidate.
Rep. Tanya Pullin (D-South Shore) sponsored House Bill 203 to establish a new threshold of $3,000 to trigger the requirement that an office-seeker file a campaign finance report. Sen. Damon Thayer said the Senate’s amendment to boost the campaign donation limit encompasses ideas that have languished in previous legislative sessions.
In explaining his opposition to the amended bill, Sen. Perry Clark (D-Louisville) said he believes money has a corrupting influence on government and the political process as wealthy donors invest in super PACs that dominate messaging on issues and candidates.
Some GOP senators contend the courts have re-affirmed First Amendment protections for political contributions. They argued the amended HB 203 will give conservatives leverage against what they label as liberal media. Yet Democrats blamed the dysfunction in Washington on the pervasiveness of money in politics and said Kentucky shouldn’t follow in those footsteps.
The Senate-amended HB 203 cleared the Senate 28 – 8. It now goes back to the House for that chamber to consider the Senate changes.
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