FRANKFORT (AP) — Kentucky Gov. Matt Bevin’s plan to overhaul the retirement system for public school teachers would cost taxpayers an extra $4.4 billion over the next 20 years, according to a new analysis, a whopping cost that potentially complicates the proposal’s prospects in the House as GOP leaders struggle to find votes for it.
The analysis by Cavanaugh Macdonald Consulting is the first official scoring of Bevin’s proposal, which he unveiled last month. A similar analysis will be completed for the retirement system that covers state workers.
If Bevin’s proposal is approved, the deficit in the teachers’ retirement system is projected to be $11 billion by 2038 and the plan would be 71 percent funded. If lawmakers don’t pass the bill and fully fund the system every year — something they have not done over the past decade — the deficit is projected to be $9.6 billion by 2038 and the plan would be 80 percent funded.
Bevin’s proposed bill would require the legislature to fully fund the pension system every year. But lawmakers could suspend that requirement in future legislative sessions.
Bevin’s plan has taxpayers paying more in the beginning. Savings would not begin until 2034. The payments would eventually decrease, but the changes would require lawmakers to find an extra $600 million to put into the system in 2020. That would be difficult, since Kentucky finished the most recent budget year with a deficit and is projected to have another deficit this year.
The consultants only projected for the next 20 years, as they are required to by law. Bevin spokeswoman Amanda Stamper said the plan will show “significantly better funding” over 30 years. And she said the state will be able to afford “additional payments over the next 30 years, thereby saving the teachers’ pensions.”