Kentucky AG and Governor Battle Over Pensions

Thousands of teachers from across Kentucky fill the state Capitol to rally for increased funding and to protest last minute changes to their state funded pension system, Monday, April 2, 2018, in Frankfort, Ky. (AP Photo/Timothy D. Easley)

FRANKFORT, Ky. (CN) – Kentucky Attorney General Andy Beshear sued Governor Matt Bevin in an attempt to nullify a pension reform bill that stands to cut benefits for teachers and other public employees, a day after Bevin signed the bill into law.

According to Beshear, Senate Bill 151 – which started out as an “11-page bill relating to sewer services” – violates the state’s contract with its public employees, and is also unconstitutional because of the manner in which it was passed.

The lawsuit filed Wednesday in Franklin County Circuit Court says that when the Republican-led Legislature realized a pension reform bill lacked the necessary votes to pass even the Senate, the Committee on State Government reworked SB 151 to ensure pension cuts would get done.

“The committee immediately amended SB 151,” the complaint states, “stripping all language about sewers. The bill suddenly became a massive 291-page overhaul of Kentucky’s public pension systems.”

The lawsuit continues, “The chair, Representative Jerry T. Miller, announced the committee would vote on the bill during the meeting, even though most committee members had not seen, much less read, the 291-page ‘surprise’ bill.”

The bill passed on a “purely partisan vote,” according to the complaint, on March 29.

Governor Bevin signed the bill into law on Tuesday, a week after thousands of teachers flocked to the Kentucky Capitol to protest changes to their pension plans.

Beshear alleges the process by which the law was passed was littered with constitutional violations, not the least of which was a lack of public input.

“The committee allowed no public testimony, excluding any say for the public employees whose pensions were being cut. And the committee did not make a single copy of the bill available to the public during the meeting to allow Kentucky citizens to know what their ‘public servants’ were doing,” the complaint states.

The committee that proposed the bill also failed to conduct any actuarial analysis of the bill before it was put to a vote, according to Beshear.

The AG says such analysis “is necessary to determine if the bill will work, i.e., would the bill save money or cost the Commonwealth the additional $3 plus billion that has since been reported.”

“If SB 151 is allowed to take effect, hundreds – and perhaps thousands – of additional public employees will retire, leading to both an education and public safety crisis,” the lawsuit states. “Indeed, the mere passage of SB 151 resulted in the closure of 27 school districts the very next day and the following Monday because teachers have begun to take their sick days as a direct consequence of SB 151’s elimination of their ability to use such days to calculate their retirement eligibility.”

Beshear seeks a judgment that SB 151 violates the Kentucky Constitution and breaches the “inviolable contract between the Commonwealth and its public employees,” as well as an injunction to prevent enforcement of the law.

Named alongside Governor Bevin as defendants are Kentucky Senate President Bertram Stivers II, House Speaker Pro Tempore David Osborne, the board of trustees of the Teachers’ Retirement System of the State of Kentucky, and the board of trustees of the Kentucky Retirement Systems.

Beshear tweeted a video about the lawsuit Wednesday, in which he said he “fulfilled my promise and filed suit against the pension bill, Senate Bill 151.”

“The way that this bill was passed,” he added in the video, “amending a sewage bill, at the last hour, in the dead of night, without any hearings, without the required constitutional readings, without an actuarial analysis, violates multiple provisions of the Kentucky Constitution.”

Elizabeth Kuhn, Governor Bevin’s communications director, said in a statement Wednesday that the “Beshears have always treated pensions as political currency, so it’s no surprise that Attorney General Beshear filed this political lawsuit today.”

“Over eight years, former governor Steve Beshear underfunded the pension system by billions, recklessly diverting much needed funds to other causes and allowing the system to become the worst funded in the country,” Kuhn said. “Now, the attorney general is carrying on the Beshear family legacy by trying to block a law that will strengthen our pension system.”

Kuhn added that AG Beshear “has threatened litigation since the process began” and cares more about “scoring political points” with the Kentucky Education Association, the state’s teachers’ union.

“Rather than looking out for the best interest of Kentuckians, the attorney general has chosen a political path, one that will cause irreparable damage to public employees and taxpayers,” she said.

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