Covering Kentucky

Mar 5, 2013 5:28 PM

Beshear Pledges To Finish Pension Reform This Year

FRANKFORT, Ky. (AP) - Gov. Steve Beshear pledged Tuesday to get a measure passed this year to shore up the state's pension system for government retirees, even if it means calling a special legislative session to do it.

The Democratic-controlled House and the Republican-led Senate are at odds over competing proposals for restoring solvency to the pension system, which has a $33 billion unfunded liability.

"I'm confident that the House and Senate are sincere in their desire to resolve this issue," Beshear told reporters in his Capitol briefing room.

The Senate proposal would create a 401(k)-like hybrid retirement plan for new employees. The House opposes that idea. The House wants to generate money for pensions from the state lottery and from horse racing tracks. But the Senate is balking at that proposal.

A revenue bill passed by the House and now stalled in the Senate calls for the state lottery to add Keno and some new online games to generate revenue for the pensions. It also calls for tax revenue from slot-like devices, called Instant Racing machines, at horse tracks to be designated for pensions.

House Speaker Greg Stumbo said that could net $100 million a year, roughly the amount of additional money Kentucky needs to make its annual pension contribution.

In Kentucky, actual slots are banned, but two horse tracks have installed the Instant Racing machines. Players wager on the outcomes of past horse races, without knowing where they took place or who won. The machines spawned a legal challenge that is now pending before the Kentucky Supreme Court.

Lawmakers have been bouncing around several ideas to raise money for pensions, though most have been rejected. A proposal to increase the state's cigarette tax from 60 cents to $1 a pack fell to the wayside last month.

Beshear acknowledged Tuesday that the pension issue is a tough one.

"Whether it's resolved in this current session or not I think is still up in the air," the Democratic governor said. "But one way or the other this year, we're going to resolve this pension issue, because I think all of us understand we've got to resolve that and get it out of the way for Kentucky to move forward."

Stumbo said Tuesday that there's been no movement on the issue since last week. That didn't dash Beshear's optimism. He said the House and Senate are committed to finding a solution.

"So, I think as long as all of us have that attitude, we will eventually resolve this pension issue," Beshear said. "We're going to keep talking and see where things go."

Beshear had also pressed for tax reform this year, but lawmakers have made no headway on that issue. The governor didn't say he would put that issue on a special session agenda.

"We'll see," he said.

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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