OP-ED: Sen. Joe Bowen on Pension Transparency

COMMONWEALTH OF KENTUCKY
SENATOR JOE BOWEN

For Immediate Release
May 2, 2016
Contact: John Cox
502-564-3120
JOHN.COX@LRC.KY.GOV

The following is an op-ed submitted by Kentucky State Sen. Joe Bowen of Owensboro:

“Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”

– Justice Louis D. Brandeis (1856-1941)

These words were powerful in the early 20th Century when written by the former Justice of the Supreme Court and are arguably even more meaningful today.

As the primary sponsor of Senate Bill 2 (SB 2) during the 2016 Session, I sought to focus needed “sunlight” into the activities of the Commonwealth’s taxpayer funded state employee pension systems. Unfortunately politics got in the way and my efforts were fruitless. Key decision makers in the House of Representatives succumbed to the relentless opposition from the retirement system’s lobbyists and decided that transparency is not important.

The nearly $40 billion in liabilities of the retirement systems are a ticking time bomb threatening our entire state. Our retirement systems are ranked among the worst funded in the nation. Taxpayers deserve to know how the pension systems operate and legislators should to have the ability to set policy, not simply react to crisis after crisis. It is past time for change. SB 2 would have provided an opportunity for everyone interested in finding a solution to have the information they need to find those solutions.

Even my good faith attempts at compromise produced no results. The consequences of this inaction mean that you, the taxpayer, and state retirees (who are dependent on the systems for their checks) continue to be in the dark regarding how the systems make decisions. Decisions that involve investing billions of dollars.

Senate Bill 2’s key provision was requiring adherence to the state’s “Model Procurement Code” by the retirement systems. Meaning for the first time an open and competitive bidding when hiring investment managers. While establishing this process would have been victory enough, the bill also called for the reporting of management fees, transparency in investment performances, and Senate Confirmation of the Kentucky Retirement Systems’ Executive Director. Senate Bill 2 would have required more financial expertise of appointed board members and provided additional oversight from a watchdog group known as the Government Contract Review Committee.

The House’s failure to enact Senate Bill 2 does not mean the General Assembly took no action to solve Kentucky’s public pension crisis.  The Commonwealth will be making an unprecedented contribution of $1.28 billion above the recommended and required contributions to the pension systems.  A move I have been advocating for some time.  But this additional funding does not remove the need for more transparency.

“The most important political office is that of the private citizen.”

– Justice Brandeis

 

All is not lost. I have lived to fight another day and the retirement systems should remember that the 2017 Session of the General Assembly will be here before they know it.

 

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Note:  Senator Joe Bowen (R-Owensboro) represents the 8th District including Daviess, Hancock, and McLean counties.  He is chairman of the State and Local Government Committee and a member of the Transportation Committee, the Licensing and Occupations Committee, and co-chair of the Public Pension Oversight Board.  For a high-resolution .jpeg of Senator Bowen, please visit http://www.lrc.ky.gov/pubinfo/portraits/senate08.jpg.

KENTUCKY SENATE PASSES STRUCTURALLY BALANCED BUDGET TO FUND PENSIONS, STRENGTHEN FINANCIAL FOUNDATION

For Immediate Release
Contact: John Cox
859-492-2963
John.Cox@LRC.KY.GOV

FRANKFORT, Ky. (March 23, 2016) – Addressing Kentucky’s underfunded pension systems was the top priority in the Senate’s version of House Bill (HB) 303, the state’s two-year budget, which passed the Kentucky Senate Wednesday with 27 votes.

“The major difference between the House budget and the Senate budget is that the Senate’s budget is structurally balanced, meaning we do not use one-time monies to pay for recurring expenses,” Senate President Robert Stivers said. “We dedicated more funding to KTRS than was proposed by Governor Bevin, but we also dedicated more funding in addition to the ARC payments for KRS nonhazardous than proposed by Governor Bevin and the House combined.”

While Senate Budget Chairman Chris McDaniel noted that Kentucky’s state’s pension obligation to teachers is of major importance, it also is funded at about 50 percent, or approximately three times more than that of our employee pension systems (17 percent). The Senate also sets aside $250 million for a permanent fund similar to Governor Bevin’s proposal. Of that permanent fund, $3 million would be used to commission an external performance audit of the Kentucky Teachers Retirement System, while holding the remaining $247 million to address the pensions upon completion of the audit.

“100 percent of the $250 million in the permanent fund will be used to fund our ailing pensions. The reason for waiting to spend this money is because we feel that an audit is necessary to adequately assess the issues that ail our systems,” McDaniel said. “We owe it to the taxpayers of this Commonwealth to bring in an outside party so that we can get an honest audit of this system and identify what systematic changes must be made to ensure this system is viable in perpetuity.”

The Senate budget also provides $372.5 million for the Budget Reserve Trust Fund, which is the highest amount in the Commonwealth’s history.

Additional highlights of the Senate’s budget (HB 303):

  • Included in the Kentucky Retirement Systems’ numbers is $15 million for Fiscal Year (FY) 2017 and $10 million in FY 2018 for Kentucky State Police Hazardous Retirement.
  • The Senate, like Governor Bevin, did not budget to 100 percent of the revenue estimate. The Senate provides for additional contingent contributions of $67.9 million to KTRS over the 2016-2018 biennium.
  • The Senate moved all coal severance funding to the top which includes funding for Operation Unite, Save the Children, Trover Clinic, the Family Residency Program at Owensboro, and other routine items funded with coal severance. The remaining dollars are directed to the LGEAF fund which goes directly back to the county judges and fiscal court.
  • There are no single county line-item coal severance projects in the Senate budget.
  • The Senate does not change the statutory allocation between General Fund and the coal severance fund. The split remains 50-50.
  • The Senate budget mirrors the Governor’s proposal and stays true to the HB 611 from the 2000 Regular Session’s statutory allocations.
  • Constitutional Officers – The Senate agrees with Governor Bevin’s budget stabilization reductions and in certain places increases restricted fund appropriations.
  • Pharmaceutical Settlement Funds – The Senate directs $7 million to Kentucky State Police for crime lab equipment and DNA testing, provides $2.5 million to community mental health centers for mental health services, and $8 million for KTRS unfunded health liability.
  • Debt – The Governor, House and Senate had a debt ratio of approximately 5.8 percent, however, the House budget gave complete bonding authority to the state universities for agency bonded projects without the authority of the General Assembly. That provision has the potential to significantly increase the Commonwealth’s debt ratio without input for the General Assembly. The Senate removed this provision but did include authorization for the restricted fund cash projects for the public universities and KCTCS.
  • Higher Education – The Senate agrees with Governor Bevin’s budget stabilization reductions and provides equity in funding beginning in FY 2018 for Northern Kentucky University and Western Kentucky University. In addition, the Senate provided an additional $3.3 million each for the land grant match for Kentucky State University.
  • Justice Cabinet – In the midst of a heroin epidemic, the House reduced funding for heroin treatment by $12 million. The Senate restores that funding.
  • The Senate, like Governor Bevin, has a structurally balanced budget.

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SENATOR MIKE WILSON: THE TIME IS NOW TO PASS SENATE BILL 1

For Immediate Release
February 24, 2016
Contact: John Cox
859-492-2963
John.Cox@LRC.KY.GOV

SENATOR MIKE WILSON:  THE TIME IS NOW TO PASS SENATE BILL 1

Based on consistent messages from Kentucky public school educators, this is not a time to halt or apply the brakes on adopting Senate Bill (SB) 1, but a time to step on the accelerator.  Since 2009, political posturing, artificial accountability, and bureaucratic burdens have “halted” practitioners long enough.

First, SB 1 attempts to reduce political influences that have stifled educators’ voices for determining state academic standards and tests.  Pursuit of federal “Race to the Top” money influenced our state to adopt standards without preliminary practitioner input and to hastily choose tests that inadequately aligned with those standards.

Most teachers have had to pull double duty teaching extra lessons for the state test in addition to their regular curriculum.  Just ask any Kentucky educator.  The good news is that SB 1 will not only allow the public and Kentucky teachers to recommend standards but also trust them to simultaneously ensure alignment of state tests with those standards.

In addition, to reinforce transparency, a committee composed of Governor appointees, representatives, and senators will join the Commissioner of Education to prevent the political end-run influence of vendors or executive orders from nullifying public and educator recommendations.  This committee will NOT change the recommendations made by the review groups, but will ensure all voices have been heard before forwarding them to the Kentucky Board of Education.

Second, in response to educators’ outcries from across the state, our bill’s accountability guidelines will allow practitioners to refocus on student growth, staff productivity, and credentialed graduates sought by industry, rather than on compliant activity and a chasing after points.  Despite state assistance and sanctions, accountability measures have not effectively impacted student achievement growth, especially for our economically disadvantaged students, whose percentage of novice scores nearly doubles those of their counterparts.  Just ask any Kentucky educator.

To hold both higher and lower scoring schools accountable to move 100 percent of their students to proficient performance, SB 1 requires one additional measure that compares each school’s average growth with other schools with similar demographics.  In addition, to accelerate school improvement, SB 1 aligns with the federal Every Student Succeeds Act (ESSA) to allow local districts the decision-making authority to pursue cutting-edge, turnaround strategies from experts not available from the Department of Education.

Postsecondary readiness will be measured by increases in the percentage of graduates with higher college admissions test scores, college credit hours, and genuine credentials demanded by industry rather than an assortment of additional tests.

Third, although a statewide professional growth and effectiveness system was recently established for Kentucky educators, federal influence reversed the course and stunted the growth of practitioners.  The quality new standards and evaluation framework was neutralized by forcing teachers to spend a disproportionate amount of time responding to incessant and overreaching state requirements to submit unnecessary documentation, tallying of processes, and tediously entering contrived student growth on a $36 million web-based system that seldom worked.

A principal remarked that he was no longer a leader of an innovative staff, but a manager of compliance.  Just ask any Kentucky educator.  SB 1 preserves the state’s authority to establish a quality statewide evaluation framework but designates to the local district the logistics of developing and implementing an evaluation system that must align with that common framework.

This is not a time to stop and study.  It is a time to dramatically grow.  The best time to plant a tree was seven years ago.  SB 1 of 2009 was that tree.  However, federal and state influence and overreach has halted growth and significantly diminished the harvest of fruit we envisioned.  Just ask any Kentucky educator.

The second best time to plant a tree is NOW and we can do that with SB 1 of 2016.

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Note: Senator Mike Wilson (R-Bowling Green) represents the 32nd District in Warren County. He is the Chair of both the Education Committee and the Education Assessment and Accountability Review Subcommittee.  He is a member of the Economic Development, Tourism and Labor Committee and the Veterans, Military Affairs and Public Protection Committee, as well as a liaison member of the Budget Review Subcommittee on Education.   For a high-resolution .jpeg of Senator Wilson, please visit www.lrc.state.ky.us/pubinfo/ephoto.htm.

 

SENATOR ROBERT STIVERS’ ON THE PASSING OF GEORGIA POWERS:

Commonwealth of Kentucky
Senate President Robert Stivers

For Immediate Release
January 30, 2016
Contact: John Cox
John.Cox@LRC.KY.GOV

SENATOR ROBERT STIVERS ON THE PASSING OF GEORGIA POWERS, FIRST WOMAN AND FIRST AFRICAN-AMERICAN ELECTED TO THE KENTUCKY STATE SENATE:

“I was saddened to learn of Georgia Powers’ passing this morning,” said Senate President Robert Stivers, R-Manchester. “I was fortunate to have known her personally. She was a strong and energetic woman; truly a trailblazer for the civil rights movement in Kentucky.”

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Note:  Senate President Robert Stivers represents the 25th District, which encompasses Clay, Knox, Lee, Owsley, Whitley, Wolfe counties.  He serves as chairman of the Senate Committee on Committees and Rules Committee and the co-chair of the Legislative Research Commission.  Additionally, President Stivers is a member of the Senate Judiciary Committee.  For a high-resolution .jpeg of President Stivers, please visit http://www.lrc.ky.gov/pubinfo/Senate25.htm

KENTUCKY SENATE CANCELS JANUARY 22 SESSION DUE TO WINTER STORM JONAS

For Immediate Release
Contact: John Cox
859-492-2963
John.Cox@LRC.KY.GOV

FRANKFORT, Ky. (January 21, 2016) – After a briefing from emergency management personnel, the Kentucky State Police, and the National Weather Service, Senate Leaders have cancelled the Senate session on January 22, 2016.

The storm is projected to begin in Western Kentucky around 1 a.m. ET and is expected to impact the entire state.

“Due to the inclement weather, the Kentucky State Senate will not be meeting for session on Friday,” said Senate President Robert Stivers. “However, legislators who remain in Frankfort on Friday may be at the Capitol working, and we ask that staff travel accordingly.”

The Senate is scheduled to reconvene on Monday, January 25, at 4 p.m.

According to the National Weather Service, nearly the entire Commonwealth is under a Winter Storm Warning, with select counties under a Winter Storm Watch. For road conditions, please refer to the Kentucky Transportation Cabinet (KYTC). Follow KYTC’s Twitter, Facebook and website for updates, or call 511.

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Kentucky’s Senate Majority Caucus is made up of 27 Republican senators from across the Commonwealth. Senate Leadership consists of Senate President Robert Stivers (R-Manchester), President Pro Tempore David Givens (R-Greensburg), Majority Floor Leader Damon Thayer (R-Georgetown), Majority Caucus Chair Dan Seum (R-Fairdale), and Majority Whip Jimmy Higdon (R-Lebanon).

KENTUCKY SENATE MAJORITY FILES PRIORITY LEGISLATION FOR 2016 REGULAR SESSION

For Immediate Release
Contact: John Cox
859-492-2963
John.Cox@LRC.KY.GOV

 FRANKFORT, Ky. (January 6, 2016) – A total of 13 “priority” bills were filed Wednesday in Senate by the chamber’s Republican Majority Caucus, as the Kentucky General Assembly completed the second day of the 2016 Legislative Session.

“The Senate Majority’s agenda for the 2016 Session reflects our motto of creating Kentucky jobs and strengthening Kentucky families,” Senate President Robert Stivers (R-Manchester) said. “The only priority not listed is the state’s biennial budget, our state’s ultimate policy document. We look forward to working with Governor Bevin and our colleagues in the House to address these key issues and challenges with a common goal of making Kentucky a better place to live and work for all.”

Bill numbers are listed below with primary sponsors in parenthesis:

  • Senate Bill (SB) 1 (Sen. Mike Wilson) – “Education Reform would return to the original intent of SB 1 from 2009, which set out to produce college and career ready Kentucky graduates and to promote less burden and more benefit for educators while limiting federal overreach.
  • SB 2 (Sen. Joe Bowen) – “Pension Reorganization would make the pension systems (KRS, KTRS, and JFRS) more transparent in their transactions, more accountable in how they contract with third parties for services, and to ensure that the board of trustees of KRS and KTRS have the investment experience necessary to professionally guide these organizations.
  • SB 3 (Sen. Robert Stivers) – “Right to Work would give workers a choice regarding joining a union and prevent the requirement that employees pay union dues as a condition of employment.
  • SB 4 (Sen. Julie Raque Adams) – “Informed Consent would promote protection of the rights of the unborn, this bill would require those seeking an abortion to have a face-to-face, in-person counseling session with a physician 24 hours prior to the procedure.
  • SB 5 (Sen. Steve West) – “Marriage License Fix for County Clerks codifies Governor Bevin’s Executive Order to have county clerks’ signatures removed from marriage licenses.
  • SB 6 (Sen. Ralph Alvarado) – “Medical Review Panels would require medical malpractice cases to be reviewed on their merit by an independent panel before they can be filed in court, thus preventing frivolous lawsuits.
  • SB 7 (Sen. Max Wise) – “Defunding Planned Parenthood would prohibit any non-Medicaid state tax dollars from funding the organization Planned Parenthood, a national group which routinely conducts abortions and recently was accused of selling fetal organs for profit.
  • SB 8 (Sen. John Schickel) – “Judicial Redistricting will require the court system to balance population and caseloads throughout the state on the same schedule as the legislative redistricting. While legislative redistricting is required every 10 years, it has been several decades since redistricting occurred in the Judicial Branch of state government.
  • SB 9 (Sen. Wil Schroder) – “Repeal Prevailing Wage on school construction to eliminate an estimated additional 10-20 percent in costs from publicly-funded school construction.
  • SB 10 (Sen. Chris McDaniel) – “Move Statewide Elections to Even-numbered Years to generate greater voter turnout for statewide elections. Research has proven that hundreds of thousands of additional Kentucky voters show up to the polls during years when a federal election is held. This measure would not extend the term of the current Governor, and would also save the state an estimated $20 Million over each election cycle.
  • SB 15 (Sen. Albert Robinson) – “Religious Freedom in Schools.Consistent with U.S. and Kentucky Constitutions, the purpose of this bill is to reinforce religious and political freedoms of expression for students, staff, and schools, and effectively strengthens the communication of these rights to all local school boards, school councils, and certified employees.
  • SB 20 (Sen. Ralph Alvarado) – “Appeals Process for Managed Care Organizations (MCO’s)to allow providers such as hospitals, doctors, and clinics to appeal a determination by an MCO that a service is either not covered or is covered at a lower payment level. Currently providers can only appeal to the MCO and not to the Department of Medicaid Services.
  • SB 25 (Sen. Max Wise) – “Prohibiting Sale of Fetal Tissue to ensure profits will not be obtained by individuals or organizations by selling fetal tissue from an abortion.

These bills will be made available online as filed: http://www.lrc.ky.gov/record/16RS/bills_S.htm.

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Kentucky’s Senate Majority Caucus is made up of 27 Republican senators from across the Commonwealth. Senate Leadership consists of Senate President Robert Stivers (R-Manchester), President Pro Tempore David Givens (R-Greensburg), Majority Floor Leader Damon Thayer (R-Georgetown), Majority Caucus Chair Dan Seum (R-Fairdale), and Majority Whip Jimmy Higdon (R-Lebanon).