Kentucky Teacher’s

Retirement System update

By Max Wise, 16th District Senator

Earlier this month, House Republican Leader Jeff Hoover (R- Jamestown) sent Governor Steve Beshear a letter urging the appointment of a bipartisan task force to develop a fiscally sound plan to fix the Kentucky Teachers’ Retirement System (KTRS). The Republican members of the State Senate are pleased to see that 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.

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. Kentucky teachers, be it retired, current, or future, are vitally important to the livelihood of every Kentuckian.

I have expressed to each Retired Teachers’ Association group throughout the 16th District and to those retired teachers that I see at various places throughout the community that I am committed to working on this issue in a bi-partisan manner.

As legislators we must hold true to our commitment to KTRS. I have even expressed interest to Senate President Robert Stivers that I would be available to serve as an appointee on a proposed bipartisan KTRS task force if the Governor were to establish such a working group.

I would like to make mention to several key points as it relates to the current situation regarding KTRS. I recently posted this on my personal FaceBook and social media outlets to inform my constituents about why I voted the way that I did on KTRS funding during our recent legislative session as a way to remain transparent with my constituents and hold true to my commitment as a citizen legislator in Frankfort:

1. No retired teacher is in danger of failing to receive their monthly check. The KTRS can continue to meet their obligations for the next 20 years,

2. I know teachers do not receive Social Security,

3. I understand the KTRS has an unfunded liability and has been selling assets,

4. I understand the KTRS needs an influx of money to help close the unfunded liability,

5. I understand structural changes need to be made to the KTRS to ensure a stable retirement for active teachers and future teachers;

6. 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. He explained to us 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 it would be very difficult to sell even $1 billion of bonds in one year. He went on to outline how selling even $1 billion of bonds 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, myself and the Senate decided to develop a new proposal to move the process forward.

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.

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. Thank you again for allowing me to serve you in the Kentucky State Senate.

Senator Max Wise (R-Campbellsville) represents the 16th District which encompasses Adair, Clinton, Cumberland, McCreary, Russell, Taylor, and Wayne counties. Senator Wise serves as Chair of the Senate Enrollment Committee; Vice Chair of Education Committee; and a member of Appropriations and Revenue Committee;; Economic Development, Tourism and Labor Committee; Health and Welfare Committee; and Veterans, Military Affairs, and Public Protection Committee. He also serves as chair of the Budget Review Subcommittee on Transportation and member of Budget Review Subcommittee on Education, NR, and EP.