A nonprofit publication of the Kentucky Center for Public Service Journalism

Supreme Court’s ruling striking down pension law draws strong reaction on both sides of the issue

By Tom Latek
Kentucky Today

Supporters and opponents of the lawsuit filed by Attorney General Andy Beshear against the public pension bill by the 2018 General Assembly – a decision upheld unanimously in a Kentucky Supreme Court ruling – offered views on the decision.

The high court unanimously affirmed a local court ruling, which found the process used to pass the public pension bill during the 2018 General Assembly was unconstitutional. In writing the majority opinion, Justice Daniel Venters said while Senate Bill 151, which was originally a wastewater bill transformed into a public pension bill was not read in its entirety, it was read by its number and title, which should suffice constitutionally. However, he noted, “The words ‘SB 151’ were indeed ‘read’ three times, but the title read along with that designation was ‘An act relating to the local provision of wastewater services.’

“Although read only by title, the title by which SB 151 was read never had any connection with the subject matter of the measure enacted: ‘An act relating to retirement,’ nor did it connote any information to signify that the act related to public pensions, or the retirement of public employees,” Venters wrote.

KEA’s Stephanie Winkler, Attorney General Andy Beshear and the FOP’s Jerry Powell weighed in on the Kentucky Supreme Court’s ruling. (Kentucky Today/Tom Latek)

Stephanie Winkler, president of the Kentucky Education Association, one of the plaintiffs in the suit, said the KEA represents many of the employees affected by Senate Bill 151.

“We just did the right thing. It’s not any different than what we try to teach or show our students every day.

“The decision by the Kentucky Supreme Court will go a long way in preserving our professions because we want to be able to attract and retain the best and brightest to educate Kentucky’s children.”

Jerry Powell with the Kentucky Fraternal Order of Police called the decision important for Kentucky’s future.

“With the passage of SB 151, Kentucky began to lose many valuable employees,” he said. “The experience and knowledge we lost have hurt the commonwealth. Hopefully, with this decision, we will retain our most valuable asset, those employees.”

Powell also scoffed at claims that the court ruling meant the end of the public pension system in Kentucky.

A statement released by the House Republican Caucus noted that the process declared unconstitutional has been utilized for decades and never challenged until now.

“The consequences of today’s unwise decision will be far-reaching – particularly for the separation of powers that lie at the heart of our system of government.

“This unfortunate decision now subjects decades of good legislation to potential legal challenges, while revealing a complete and total lack of understanding for the separation of powers. It disrespects the hard work done by the people’s elected representatives and ignores the constitutional foundations of the three branches of government.”

Senate Majority Leader Damon Thayer, R-Georgetown, took to social media to express his displeasure with the ruling.

“This confirms what I’ve long thought: the KY Supreme Court is stacked with liberal activist judges who must be replaced,” he said on Twitter. “Today’s ruling is a huge blow to legislative independence, but great for lawyers who want to litigate decades of laws already on the books.”

Gov. Matt Bevin also met with reporters following the high court ruling and called it a “sad day” for Kentucky.

“It’s a sad day for anybody who hopes to retire after years of government employment,” he said. “It’s a sad day for the rule of law, it’s just a sad day, it really is.”

Gov. Matt Bevin called it a ‘sad day.’

Bevin said he met with all the presidents of the universities that have employees in the pension plan right before his press conference.

“To say that there is concern on their part would be a remarkable understatement,” he said. “And they speak for just a small portion of the hundreds of thousands of people, and family members of those people, that are affected by the fact that we have now seen the only chance to save the worst-funded pension system in America, struck down unanimously; based on some arbitrary procedural ruling which, frankly, calls into question the very same procedure that has passed bill after bill after bill since the 1880s at least in this state.”

House Minority Leader Rocky Adkins, D-Sandy Hook, called the ruling a huge victory.  

“It re-affirms what I and other caucus members said in committee and on the floor when we called the House Republicans out of order and said they were breaking the law for the way they handled Senate Bill 151, the ‘sewer’ pension bill.

“We said that the legislative rules and processes should not be ignored, because that shuts out the very public we serve.  This ruling also properly protects our teachers, public employees and their retirees throughout the commonwealth.  Going forward, our caucus remains firm in believing two things: That we should maintain the bipartisan pension reforms passed in 2013 and fund them.”

Incoming Senate Minority Leader Morgan McGarvey expressed similar sentiments.

“Bottom line: the Kentucky Supreme Court today upheld that you cannot turn an 11-page sewer bill into a 290-page overhaul of the pension system without giving anyone notice or the chance to read it. Good. Now it is the time to get back to work, fund our obligation to our public employees, and do better with legislation in the future.”

The Northern Kentucky Chamber was disappointed in the action. The chamber released the following statement:

“The Northern Kentucky Chamber of Commerce is disappointed with the Kentucky Supreme Court decision invalidating the 2018 Pension legislation, especially since the decision failed to address any substantive questions related to the scope of pension reform. As a result of yesterday’s decision, pension reform remains a critical issue for the Commonwealth’s economic vitality.

“We trust the General Assembly will not be deterred by the decision and will continue to work to achieve meaningful pension reform.

The head of the state’s largest local business group, Greater Louisville, Inc., agreed.

“Although today’s Kentucky Supreme Court decision was based on procedural grounds, GLI views this ruling as a major step in the wrong direction,” said Chief Operating Officer Sarah Davasher-Wisdom. 

“Now, Kentucky must act in 2019 to address the unsustainable costs of Kentucky’s public pension systems. Long-standing priorities of GLI, like level-dollar amortization for paying off unfunded liabilities, cap on factoring sick days into benefits, and introducing hybrid cash-balance plans into the teachers’ retirement system, are vital financial reforms.

“Kentucky can no longer afford credit downgrades and crowding out essential budget priorities, like public education and infrastructure investments. GLI will work with the General Assembly to save our public pension systems and put our state on a more secure financial footing.”

The Kentucky Public Pension Coalition that says it represents hundreds of thousands of public employees and retirees said the justices made the right decision.

“For the last two years, KPPC and our affiliate organizations have pushed back on lawmakers’ attempts to harm public employees,” said spokesman Brian O’Neill. “This decision upholds the values we place in our constitution that make sure all Kentuckians have a voice. Attacks on police officers, firefighters, teachers, and all other public employees will not be tolerated.”

O’Neill added: “A pension is not a bonus.  With each and every paycheck, public employees have paid their fair share into the pension fund, and with each and every day of service to our commonwealth, they earn their pensions.”

NKyTribune staff contributed to this report.

See the NKyTribune’s story about the Supreme Court ruling here.

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