FRANKFORT – State Senator Danny Carroll is speaking out about the need for a bipartisan task force to address the ever concerning funding issues associated with the Kentucky Teachers Retirement System. This week, he issued a release stating House Republican Leader Jeff Hoover (R- Jamestown) has sent Governor Steve Beshear a letter urging the appointment of this bipartisan task force to develop a fiscally sound plan to fix the KTRS.
“The Republican members of the State Senate are pleased Representative Hoover has joined with us and the growing number of voices calling for a transparent process to the save the KTRS. We encourage Governor Beshear to use the bully pulpit of his office in his remaining months as Governor and become a driving force for reform by establishing a task force much like the bipartisan group which developed the plan to reform the Kentucky Employees Retirement System.”
Senator Carroll said it is important to remember that the Senate Republican caucus was the first to issue a clarion call for pension reform, “so we recognize the danger the unfunded liability that the KTRS poses both to individual teachers and to the fiscal health of the Commonwealth. That is why the Senate did not agree to issue $3.3 billion in bonds during the last legislative session.”
Carroll said that plan was “unworkable” adding, it was “interpreted by many as nothing more than a cynical move by Democrats in the House of Representatives to gain a political advantage by harming Republicans.”
Carroll said he wanted the public to understand that he is clear on several keys points regarding this issue:
- No retired teacher is in danger of failing to receiving their monthly check.
The KTRS can continue to meet their obligations for the next 20 years,
- I know teachers do not receive Social Security,
- I understand the KTRS has an unfunded liability and has been selling assets,
- I understand the KTRS needs an influx of money to help close the unfunded
liability,
- I understand structural changes need to be made to the KTRS to ensure a
stable retirement for active teachers and future teachers;
- I am prepared to do the work and make the hard decisions to make sure retired teachers continue to receive their checks on time.
“During joint discussions between the House and Senate on House Bill 4, we all agreed to seek guidance from a bonding expert in Governor Beshear’s office.”
Carroll said the Governor explained to that it would be impossible for the state to sell $3.3 billion in bonds in the one year called for by House Bill 4. In fact, he says, it would be very difficult to sell even $1 billion of bonds in one year adding that it would lower the Commonwealth’s credit rating and increase the cost of operating state government.
“At that moment it became perfectly clear the plan in HB 4 simply could not work. So, the Senate decided to develop a new proposal to move the process forward.”
Senator Carroll maintains that just before the House Democrats walked away from the House Bill 4 negotiating table, the Senate team was prepared to offer a plan which would have immediately infused $50 million into the KTRS and create a task force of legislators to develop a fiscally sound plan to fix the KTRS.
“This $50 million would have been a responsible, good-faith proposal to demonstrate the General Assembly’s commitment to enacting a workable solution. Unfortunately, this proposal was never given a public hearing or a vote because the House Democrats chose to shut down the discussions on House Bill 4.”
Carroll added, “Despite attempts to turn teachers’ retirements into a political issue, I remain focused on doing the right thing. While I am hopeful Governor Beshear does appoint a task force, my colleagues and I in the Senate will continue to work toward identifying a fiscally sound plan to save the teacher retirement system.”
