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Kentucky’s pension reform case now in hands of Supreme Court justices, who heard oral arguments

By Tom Latek
Kentucky Today

FRANKFORT, Ky. (KT) – The Kentucky Supreme Court will now decide the constitutionality of public pension legislation after hearing oral arguments on Thursday.

Senate Bill 151 was originally an 11-page piece of legislation dealing with sewage. It passed the Senate in that form and had two reading in the House, but in the closing days of the 2018 General Assembly, a House committee substitute was presented, which contained most of the provisions of SB 1, the original pension reform bill which had stalled in the Senate.

The changes to SB 151 were adopted by the House committee, had a third reading in the House with final passage in that chamber, and the House changes were approved by the Senate, in a matter of just a few hours.
Kentucky Attorney General Andy Beshear filed a lawsuit against Gov. Matt Bevin in Franklin Circuit Court, along with the Kentucky Educational Association and the Kentucky Fraternal Order of Police, shortly after the governor signed the measure into law in early April.

Supreme Court hears oral arguments on pension bill. (Photo by Tom Latek/Kentucky Today)

In his June ruling declaring the bill unconstitutional, Franklin Circuit Judge Phillip Shepherd took issue with the process used to change it, saying the changed bill did not receive the required three readings on three separate days in each chamber and that it was an appropriations bill, meaning it required 51 votes to pass the House. It only cleared by a 49-46 vote, although It easily received the number of votes needed in the Senate.

Shepherd’s ruling did not address whether the bill broke the so-called “inviolate contract” made with public employees when they accepted employment.

During the arguments, Beshear told justices, “This court has the sacred duty to enforce the constitution created by the people and is supposed to serve the people. This court has the opportunity to return this government to the people.”

He continued, “By continuing to finally void SB 151, it not only respects the constitutional and contractual rights of over 200,000 public servants, but it tells the General Assembly you can’t take an 11-page sewer bill, turn it into a 291-page pension bill, and pass it in just six hours.”

Steve Pitt, general counsel for Gov. Matt Bevin, maintained the separation of powers doctrine between the executive, legislative and judicial branches of government, keeps the courts from interfering with actions of the General Assembly.

“The question is, do we have the strongest separation of powers in the country here in Kentucky any longer or not?” Pitt said.

After answering questions from the justices about the legislative process, Pitt said, “All of these questions are third-floor questions [where the House and Senate chambers are in the Capitol]. They are not second-floor questions [where the Supreme Court is located].

Justice Michelle Keller replied, “If we defer to the third floor to interpret the constitution itself solely, with no checks or balances, who is performing interpretation of the constitution? Does it change every two years when a new set of legislators come in? Intellectually, that’s a hard idea for me to defend.”

Pitt maintained there is no “original purpose doctrine” in Kentucky, as there are in other states where bills can only receive minor changes, or the legislative process must start over again.

After the hearing, Beshear told reporters the process used to pass SB 151 was unconstitutional.

“Something that was introduced one day in an entirely different part of government can magically turn into something else the next day, and thereby no debates and no public participation,” Beshear said.

“The public killed SB 1, it was over. But this General Assembly and this governor tried to sneak something through that the public certainly doesn’t agree with.”

Beshear continued, “The governor’s number one duty is to follow the law. This governor violates the law on a regular basis, and here violated the very trust of the people.”

Pitt, speaking to reporters, said since the High Court did not discuss the inviolable contract issue, “It could be they are only going to address the legislative procedural issues that Judge Shepherd actually decided, and not the issues he did not decide.”

He also feared what would happen to other legislation passed in a similar fashion. “The county phase-in bill, giving relief to cities and counties from having to make humungous payments immediately, that was passed in the same manner as ‘S 151’. That would be void, and Louisville Metro Government would have to come up with another $40 million right away, for example.”

No timetable was given on when the justices will hand down their opinion, although it is expected before the end of the year due to Justice Daniel Venters’ retirement.

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