Bevin draws mixed reaction to veto of pension bill

FRANKFORT, Ky. (AP) — For the second time in months, Kentucky Gov. Matt Bevin intends to reconvene state lawmakers for a special session to confront the state’s pension woes after vetoing a bill aimed at giving relief to some state-funded agencies struggling with ballooning retirement payments.

The Republican governor’s action was greeted with disappointment from the leader of the GOP-dominant state Senate. Senate President Robert Stivers said Wednesday that the bill would have provided “much needed stability” for agencies slammed by rising pension costs, and he sent a cautionary signal as Bevin and lawmakers prepare for the special session.

“Before the Senate is called into an extraordinary session, the governor should set the parameters for what he is willing to sign,” Stivers, a Manchester Republican, said in a statement.

Bevin said Tuesday that he would call lawmakers back to the state Capitol prior to July 1, the start of a new fiscal year. Reaction to the governor’s campaign-season action was mixed. Bevin is seeking a second term in this year’s election.

The advocacy group Kentucky Government Retirees commended Bevin for nixing a bill that it said exposed the Kentucky Retirement Systems to “unjustified risk.” It said the special session offers a chance for “genuine collaboration.”

“The path forward must include a funding solution that provides relief to quasi-government agencies while not fiscally damaging the nation’s most vulnerable state pension plan,” Jim Carroll, the group’s president, said in a statement.

Democrats criticized Republicans’ handling of the pension issue and the taxpayer-backed expense the special session would incur.

“Gov. Bevin’s administration appointed the KRS board that worked to spike pension obligations of state agencies, including the quasi-government agencies affected by the governor’s veto,” Kentucky Democratic Party spokeswoman Marisa McNee said in a statement. “This is a crisis of their own making and it will continue to cost Kentuckians.”

Kentucky House and Senate Democratic leaders said: “This is not how you govern.”

Meanwhile, Republican state Rep. Robert Goforth, who is challenging Bevin in next month’s gubernatorial primary, said Bevin was again “attempting to force his will” on the legislature. He said Bevin “cannot be trusted to fairly deal with pension reform.”

Asked about the ramifications of calling an election-year special session, Bevin said Tuesday: “Have you ever been under the assumption that I do things based on political calculation? That’s not my motivator here. My motivation is purely what is the right thing to do for retirees.”

Bevin said Wednesday that the pension measure needs fine-tuning to fix provisions that violate what he called the “inviolable contract”: language in state law that guarantees employees get the benefits promised when they were hired.

“We’re going to fix it,” he told reporters. “I’m not asking people to rejigger the entire thing. I’m asking them, ‘Let’s just tighten it up.'”

House Bill 358, the proposal that cleared the legislature late last month, would have let the state’s 118 quasi-governmental agencies leave the state’s troubled pension system. Such agencies include rape crisis centers, public health departments and some universities. They would have exited the pension system by paying less than what they owe.

The concession was designed to save them from bankruptcy, but it could cost the already struggling system as much as $799 million. The pension plan is at least $15 billion short of the money needed to pay retirement and health benefits over the next few decades.

In his veto message Tuesday, Bevin said: “I truly do appreciate the good intentions of the General Assembly in enacting HB 358. However, it, and we, can do much better.”

By tackling the issue before July 1, the affected agencies will get the needed relief, he said.

Stivers said Wednesday that lawmakers earlier received a different signal from Bevin about the measure he ultimately vetoed.

“Just weeks ago, during the 2019 regular session, the governor delivered a letter to members of the General Assembly expressing support for the Senate’s version of HB358, which is consistent with the final bill that arrived on his desk,” Stivers said.