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Kentucky Teachers Protest as Pension, Budget Debated

April 2, 2018, 8:27 PM

An estimated 10,000 Kentucky teachers protested what they call an “attack on education"—a pension overhaul and state budget they say makes Kentucky less competitive in recruiting talented teachers.

The April 2 protest, filled with teachers who called in sick or were on spring break vacation, crowded the halls and filled outdoor areas around the capital in Lexington. Chants could be heard all day while senators debated the state budget funding teachers’ pensions and education services.

Teacher representatives led the rally to protest a pension overhaul passed rapidly March 29 that would place new state workers in a cash-balance retirement plan instead of the current defined benefit system. The bill, which Gov. Matt Bevin (R) praised and could sign shortly, would also cap the number of sick days teachers can use to retire early and would eliminate some death benefits, while forcing the Legislature to “level-dollar” fund about $3 billion for state workers’ retirements annually.

Republican leaders have said the pension overhaul is necessary to limit the state’s liability to downturns in the economy and force Kentucky’s Legislature to properly fund the $60 billion in unfunded liabilities threatening to drag the retirement systems into insolvency. Previous legislatures have allowed the unfunded liability to balloon, and Republicans said taxpayers shouldn’t be responsible for the increasing cost of benefits, which accounts for about 14 percent of the state’s budget.

Democrats said the protest had an impact. Although Bevin came out in favor of the pension overhaul (S.B. 151) in the past few days, Republican leadership has rolled back some proposed cuts to education that were originally in the Senate version of the state budget.

“I want to commend the school teachers and employees here in attendance; because of their participation, this bill is in a lot better place than it might have been,” Sen. Ray Jones (D) said April 2. “But what this bill does for education is salve on the wound done by SB 151.”

‘One More Dig at Public Education’

Teachers from hundreds of schools rallied because they view the pension changes as “one more dig at public education,” Kentucky Education Association President Stephanie Winkler said at an April 2 news conference.

For months, teachers had held protests against assorted pension proposals. Those vary from a Bevin proposal to switch all new employees to a 401(k)-style defined contribution plan to cutting cost-of-living adjustments and reducing retirement payouts.

S.B. 151 doesn’t have large cuts to teacher pay or cost-of-living-adjustments as previous versions of the bill do, but it will still make Kentucky less competitive when trying to recruit good teachers, Winkler said. Kentucky competes with nine nearby states for regional teacher talent.

“When you are able to accumulate sick days as an educator, it’s sort of one of those benefits that takes the place of an increase in salary,” she said. “That’s one of the ways that we can help make sure we are being taken care of in our retirement. It’s not just to boost our pensions for the sake of boosting pensions.”

Republicans in floor debate March 29 frequently said S.B. 151 was a product of compromise with teachers and other public employees. Democrats said the same thing for a state budget passed April 2.

Originally, the House and Senate version of the state budget had more than $300 million in cuts to state retirees’ health-care benefits, according to an analysis by the liberal Kentucky Center for Economic Policy. The Senate version of the budget also didn’t fully fund transportation services for local schools or completely fund the actuarial required contribution for the state teachers retirement fund.

The Senate passed an amended version of the budget April 2 that included all of this funding, as well as the largest per-pupil funding in Kentucky’s history.

“This is a hard process as a budget. But ultimately we have to come together and do what’s best for the commonwealth and 4.33 million people that count on us to provide essential public services,” Sen. Christian McDaniel (R) said April 2.

Bevin didn’t immediately respond to requests for comment on whether he would sign S.B. 151. After the vote on March 29, however, he issued a statement on Twitter saying, “Tonight 49 members of the Kentucky House and 22 members of the Kentucky Senate voted not to keep kicking the pension problem down the road.”

To contact the reporter on this story: Alex Ebert in Columbus, Ohio at aebert@bloomberglaw.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com; Chris Opfer at copfer@bloomberglaw.com

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