Kentucky Supreme Court Agrees To Hear Pension Case

Posted at 7:53 AM, Aug 11, 2018

FRANKFORT, Ky. (AP) — The Kentucky Supreme Court says it will decide if changes to the state’s struggling retirement systems are legal, setting up a high-stakes clash between Republican Gov. Matt Bevin and his potential Democratic opponent for re-election in 2019.

Kentucky has one of the worst-funded public pension systems in the country. Earlier this year, the state’s Republican-controlled legislature approved changes to the system, including moving all new teacher hires into a hybrid plan and limiting how teachers can use sick days to calculate their retirement benefits. The law prompted thousands of teachers to protest at the Capitol, resulting in the closure of more than 30 school districts across the state.

Democratic Attorney General Andy Beshear, who is running for governor in 2019, sued to block the law. He argued that it’s invalid because lawmakers did not give it three readings in three days as the state’s constitution requires. Lawmakers maneuvered to get around this requirement by taking a bill about sewer systems that already had the required readings and replacing it with the pension bill. That’s why teachers and other critics commonly refer to the pension law as a "sewer bill."

In June, Franklin Circuit Judge Phillip Shepherd ruled the law was unconstitutional. Friday, Bevin’s lawyers appealed and asked the Supreme Court to take the case, bypassing the state Court of Appeals. The court agreed and scheduled an argument for Sept. 20.

"Our pension system is already dangerously close to collapsing. Without the reforms in SB 151, the system will continue to decline and remain the worst funded in the nation," Bevin attorney Steve Pitt said. "These are weighty issues that will impact every Kentuckian. They must be decided by our state’s highest court and not based on the highly suspect ruling of a single judge."

Bevin’s appeal came hours before the deadline to appeal the lower court’s ruling. Beshear criticized him for waiting so long, saying it caused "anxiety to our teachers, police officers, firefighters, social workers and public servants who deserve better."

"Our public servants and their families deserve a quick and final decision that protects the retirements they were promised," Beshear said.

Pitt said he was not trying to delay the case. He said it took him until Friday to appeal because his office has just three attorneys and they had to prepare for two arguments before the state Supreme Court this week, among their other responsibilities.

Bevin and Beshear have clashed before the Supreme Court twice before: once when Bevin cut the budgets of public colleges and universities without the legislature’s approval and once when Bevin issued an executive order to abolish and replace the University of Louisville board of trustees. Beshear won the funding lawsuit. The Supreme Court dismissed the University of Louisville lawsuit after the state legislature changed the law.

The pension issue and school funding could have a bearing on the midterm elections. At least 34 current and former teachers, most of them Democrats, are seeking seats in the state legislature this fall. Most cited the pension law and education funding as reasons for running.