FRANKFORT, Ky. (KT) – Gov. Matt Bevin’s public pension bill to address the state’s public regional universities and other quasi-governmental agencies took another step forward on Tuesday as it cleared a Senate committee, setting the stage for a final vote in the Senate on Wednesday.
Among those testifying before the Senate State and Local Government Committee was former State Sen. Robert L. Jackson, who now serves as President of Murray State University.
“The comprehensive universities in the Commonwealth have supported House Bill 1,” he told the panel. “The Kentucky Employees Retirement System in its form today, for us at Murray State University, is unsustainable and it’s unmanageable. We have to address it going forward in some form or fashion.”
He gave a little history lesson to the committee to make his point.
“Just 10 years ago, we were paying a rate of approximately ten percent [of their payroll] into the KERS. It’s about $1.66 million. This past fiscal year, which ended just a few weeks ago, the rate was 49 percent,” Jackson said. “That amount was $7 million. On July 1, without action, the rate increased to about 84 percent, which is a $4 million increase. I know that all of our peer institutions are facing the same pressure.”
He noted during that period their state allocation was cut. “At Murray State from about $56 million 10 years ago to about $44 million today. That’s about a 20 percent decline. So pensions are going the wrong direction, state appropriations are going the wrong direction, and the gap in between puts great pressure on our students and families, as we try to do our mission.”
Senate Minority Leader Morgan McGarvey, D-Louisville, told his colleagues, “The reason these agencies are asking for our help is because we did not fund them.”
McGarvey also said: “This is the first step of many towards ending the entire pension system.”
Supporters say pension costs to the agencies will double, unless the bill is approved.
The measure passed on an 8-3 vote, strictly along party lines, with no changes, and the Senate had a second reading on Tuesday afternoon. That means if it wins passage on the Senate floor Wednesday, without any changes, the legislation would head to the governor and the special session will end.
The Senate convenes at 9 a.m. on Wednesday.