SENATOR JOE BOWEN COMMENTS ON REP. JAMES KAY’S TRANSPARENCY BILL

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

FRANKFORT, Ky. (September 15, 2016) The following is a statement from Senator Joe Bowen (R-Owensboro), regarding pre-filed legislation announced yesterday from Representative James Kay (D-Versailles):

“In the 2016 General Assembly session, the Senate Majority strived to shore up the state pensions for teachers and state workers by both committing hundreds of millions of additional funds in the budgetary process, and by making the pension systems more transparent and accountable.  The full House of Representatives failed to vote on Senate Bill (SB) 2, the Senate pension transparency bill, as both standalone legislation and as part of a ‘super transparency’ bill.

On March 17th of the 2016 General Assembly session, the House State Government committee reported SB 2 favorably out of committee, with 20 ‘yea’ votes, 1 ‘nay’ vote, and 3 ‘pass’ votes.  Representative James Kay, a member of the committee, offered a “pass” vote.

Today, Representative Kay has essentially cut, pasted, and pre-filed a large portion of the contents of Senate Bill 2 from last session.  This is the same SB 2 that could not get enough support from him or House Leadership to be considered on the House floor, despite being reported favorably by the House State Government Committee.

Perhaps ‘better late than never.’  But does Rep. Kay and the House Leadership want to make substantive pension changes, or do they just want an election year issue?  There was no absence of opportunity to address these issues in the 2016 General Assembly session, but I assume these issues were not considered important to them at the time.  I am glad they now believe pension transparency and accountability are important issues.”

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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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SENATORS BOWEN, HIGDON CALL FOR MORE TRANSPARENCY OF KRS AT PUBLIC PENSION OVERSIGHT BOARD MEETING

SEAL

Commonwealth of Kentucky
Senate Majority Office

For Immediate Release
Contact: John Cox
502-564-3120 Ext. 202

SENATORS BOWEN, HIGDON CALL FOR MORE TRANSPARENCY OF KRS AT PUBLIC PENSION OVERSIGHT BOARD MEETING

FRANKFORT, KY. (October 26, 2015) – At Monday’s Public Pension Oversight Board (PPOB) meeting in Frankfort, Chairman-Senator Joe Bowen (R-Owensboro) and Senate Majority Whip Jimmy Higdon (R-Lebanon) reacted to action by the Kentucky Retirement System (KRS) Board of Trustees to increase Executive Director Bill Thielen’s salary by more than 25 percent.

“I am very troubled that the KRS Board of Trustees, in the midst of rising shortfalls and stagnant raises for state employees, chose to raise Mr. Thielen’s salary by 25 percent to $215,000 a year,” Senator Bowen said.  What’s more disturbing is that a member of the KRS Board of Trustees went on to say that he is not concerned about criticism from the legislature because he ‘doesn’t work for the legislature.’”

“This may be true, but all of us do work for the people of the Commonwealth, and I don’t think it sits well with taxpayers when government leaders, who are ostensibly ‘public servants,’ are granted huge raises while the people that pay the large salaries struggle to make ends meet,” Bowen added. “And it goes without saying that large raises will result in larger pensions upon retirement.”

Bowen went on to cite concerns expressed earlier this year that KRS and the Kentucky Teachers’ Retirement System (KTRS) were paying hefty hourly rates to law firms, far in excess of the normal $125 per hour maximum, without any responsibility to have these contracts reviewed by the Government Contract Review Committee.

Senator Higdon said at the hearing that the large pay raise for Mr. Thielen was a “line in the sand” event for him, and announced his intention to introduce legislation to make non-elected members of the KRS Board of Trustees subject to Senate confirmation, and to investigate the possibility of legislation making KRS executive director raises above the annual CPI subject to Senate approval, as well.

“Now we have another instance in which KRS is awarding a large salary increase to an employee, and the contract itself is not subject to review by the General Assembly, unlike almost every other state government agency personal services contract,” Senator Bowen said. “Both KRS and KTRS are currently exempt from the Model Procurement Code, which establishes conflict of interest and anti-kickback rules, grants vendors the right to file protest with the Finance Cabinet over the awarding of a contract, and makes personal service contracts subject to Government Contract Review Committee.”

The Public Pension Oversight Board was created by the General Assembly in 2013 to bring more transparency to the operation of KRS.  In 2015, the PPOB’s authority was extended to include oversight of the Legislators’ Retirement Plan, the Judicial Retirement Plan, and KTRS.

“This trend toward greater transparency should continue,” Bowen said. “KRS and KTRS should not operate as islands to themselves, and I urge fellow PPOB members to adopt consensus legislation to remove these agencies’ exemption from the model procurement code so that their personal services contracts, such as this one with the executive director will be subject to further review by the General Assembly.”

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SENATE LEADERSHIP ANNOUNCES THREE APPOINTEES TO TEACHERS’ RETIREMENT WORK GROUP

SEAL
COMMONWEALTH OF KENTUCKY
SENATE MAJORITY LEADERSHIP OFFICE


For Immediate Release
Contact: John Cox
502-564-3120 Ext. 202

SENATE LEADERSHIP ANNOUNCES THREE APPOINTEES TO TEACHERS’ RETIREMENT WORK GROUP

FRANKFORT, Ky. (July 13, 2015) – Senate President Robert Stivers (R-Manchester) announced Monday the three Senate representatives who will be participating in Governor Beshear’s “Teachers’ Retirement Work Group” to address funding issues: Senate Majority Leader Damon Thayer (R-Georgetown), Senator Joe Bowen (R-Owensboro) and Senator Morgan McGarvey (D-Louisville).

“It has been the position of the Senate Majority to seek a complete solution which combines structural reform with any additional funding,” Senator Thayer said. “We look forward to learning the structural solutions offered by this working group. We recognize that lasting structural changes will make any additional taxpayer funding of public pensions have a long-term impact that will benefit all Kentuckians.”

According to Governor Beshear’s office, “The work group will review best practices in other states regarding pension benefits, conduct a comprehensive review of funding options and make recommendations for improving the fiscal solvency of the KTRS. The work group may also contract for consulting services.”

Gov. Beshear also asked the work group to complete its work and submit its report to him on or before December 1, 2015.

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