If you recall, thousands of Kentucky teachers walked out last spring and rallied at the State Capitol to protest Governor Matt Bevin’s pension plan, which bottom line eliminated defined benefit pensions for new teachers.
That bill passed in the middle of the night, tucked into a sewer bill.
The Kentucky Supreme Court just struck it down.
See here.
The Kentucky Supreme Court on Thursday struck down a law that made changes to one of the country’s worst-funded public pension systems, a victory for teachers who shut down schools across the state to protest the law earlier this year.
Democratic Attorney General Andy Beshear, who filed the lawsuit that led to Thursday’s ruling, called it “a landmark win for all of our public servants.” But Republican Gov. Matt Bevin called it “an unprecedented power grab by activist judges.
“This will destroy the financial condition of Kentucky,” Bevin said, a claim Beshear dismissed as “fear mongering.”
Public pension systems across the country are in trouble as workers live longer and states grapple to make up investment losses from the Great Recession. But Kentucky’s pension systems are considered the worst of the worst, with the state at least $38 billion short of the money it needs to pay benefits over the next three decades. The shortfall has required state lawmakers to divert billions of dollars in state money to the pension system, leaving little else for other services like education and health care.
In April, Gov. Bevin signed a law that moved all new teacher hires into a hybrid pension plan. The law also restricted how teachers used sick days to calculate their retirement benefits and changed how the state pays off its pension debt.
Facing a tight deadline, state lawmakers introduced and passed the bill in one day near the end of the 2018 legislative session. The bill moved so quickly that a copy was not available for the public to read until the day after lawmakers had voted on it.
Teachers were outraged, thousands marched on the Capitol and schools in more than 30 districts closed. Beshear sued, arguing the legislature violated the state Constitution by not voting on the proposal three times over three separate days. Bevin argued lawmakers did not need to do that because they had substituted the bill for an unrelated one that already had the required votes.
Thursday, the state’s highest court sided with Beshear. It ruled that lawmakers cannot take a bill close to final passage and replace it with an unrelated bill without voting on it three times over three separate days as the Constitution requires.
The ruling could have political consequences. Bevin is up for re-election in 2019, and Beshear is one of the Democratic candidates vying to replace him. The two men have clashed in court multiple times since 2015.
PBS ran a program called “The Pension Gamble” about how Kentucky politicians used the pension fund as a piggy bank for their pet projects, taking it from solvent to insolvent. Teachers should not have to pay for politicians’ profligate behavior.
Diane Ravitch's blog 
Politicians using pension plans as their personal piggy banks… Where have I heard that before?
It is not only losses from the Great Recession. PA, and other states stopped their payments into the system in the early 2000s because the system was over funded. Then they never began paying in when the fund got low.
Republican Gov. Matt Bevin called it “an unprecedented power grab by activist judges.
If you lose, you blame those “activist judges.” A now typical Republican response.
Justice to Republicans is screwing the 99%. They think legal contracts should only be enforced if they benefit the rich and penalize the rest.
Republicans are colonialists.
He’s not the only one who looks at this as a “power grab.” The Senate Majority Leader, also a Republican, thinks the judiciary overstepped their bounds and wants to have “judicial reform.”
https://www.kentucky.com/news/politics-government/article223055340.html
What’s frustrating is that this same legislature mandated all students pass a civics test before they graduate. Perhaps these legislators should be required to pass the same test. Clearly they do not understand the role of different branches of government nor the concept of checks and balances.
They wouldn’t give themselves a test, that would be equal treatment. They think they are entitled to special treatment. They mete out punishments and take rewards that belong to others. (Bevin was a was a hedge fund manager). They never hold themselves accountable for hypocrisy. Bwana Matt Bevin is like his fellow colonialists.
If legislators were required to pass the tests they mandate and publish their scores, they would all be laughing stocks.
Imagine, politicians deciding that people do not need retirement pensions and not caring one rats ass as to the consequences these decisions will have not only on individuals but the economy as a whole.
These fregan politicians have really become the enemy of the people.
This year, the “liberal ” Center for American Progress hosted a representative panel (sarcasm) to discuss pensions. The panel included the COO of Blackstone and, the author of a book endorsed by Michael Bloomberg. A blurb describing the book’s recommendations referenced choice and competition. My interpretation of the book review summaries is that the authors want an overlay of mandatory pension saving in the private sector in addition to Social Security. Now, where have we heard about parallel systems? Oh right, the Paul Weyrich training manual posted at Theocracy Watch. (Weyrich was founder of the religious right and the Koch’s Heritage Foundation.)
The suggestion is hilarious when we recognize that median family income in the U.S. is under $60,000 and, the cost of medical (insurance, etc) for a family of 4 is $28,000.
so many sitting inside our nation’s many “think tank” worlds simply could not grasp the meaning of your last statement: the median family income in the US is under $60,000
Paid staff easily subjugate the truth when they want to please their bosses.
The Center for American Progress ladles out a lot of lip service about concern for working people while simultaneously recommending policies like privatization of America’s most important common good.
Bob Herbert wrote a genius article about pensions in NJ, 2-22-1995:
Quote – In America Whitman Steals the Future
excerpt – Governor, Christine Todd Whitman, has chosen to finance her political ambitions with a popular buy-now, pay-later economic policy that will place a financial stranglehold on future generations of New Jerseyans.
This is best illustrated by Mrs. Whitman’s decision to withhold billions of dollars that should be going into the public employee pension funds over the next few years, and using the bulk of that money to balance the state budget. Then, with an audacity that dazzles her supporters and even draws grudging admiration from opponents, Mrs. Whitman smiles and characterizes the withheld funds as savings.
Of course, they are not “savings” — not in any sense of the word. The pension obligations at some point will come due and future generations will have to meet them.
Not only will the money have to be made up, but future taxpayers will be deprived of the income that the money — if properly invested now — would be expected to generate.
Mrs. Whitman’s pension maneuvers have not gotten a lot of publicity — in part because the eyes of reporters and readers alike tend to glaze over when confronted with complex budget details. The changes that she has made have been drastic. According to the New Jersey Education Association, which has filed suit against the state, the employer contributions to the pension system this year will be as much as 96 percent below the amounts contributed in the early 1990’s.
By all accounts, the employer contributions have been reduced by nearly $1 billion a year. The Whitman administration insists that this is not a problem. Needless to say, others disagree.
“There is no question but that this is creating future debt,” said Richard C. Leone, a former New Jersey State Treasurer who is now the president of the Twentieth Century Fund. “This is just another way of getting around the balanced-budget requirement, a kind of deficit spending. It is the sort of thing that comes back to haunt you.”
Until the changes adopted by Mrs. Whitman, New Jersey had been very conservative in its approach to its pension obligations. For example, the state had started to pre-fund the health care benefits of its retirees, building up reserves against post-retirement liabilities. As one state official said: “That was prudent. Health-care costs are a big problem.”
Prudent or not, Mrs. Whitman scrapped the pre-funding. She used the reserves that had already built up to help balance her budget. end quote
When N.J. residents didn’t storm the state beach that Christie commandeered for his family and when they didn’t demand justice from the tyranny of the terrorist act by Christie’s appointees in shutting down a major bridge, they showed a total lack of courage.
I know because I live in Ohio, and our residents rewarded the Republicans who bilked us out of $1 bil, for charter schools, by re-electing, the same anti-democracy dirt bags.
When someone says of Kentucky’s teachers’ pension plan that the state is “at least $38 billion short of the money it needs to pay benefits over the next three decades,” what the person is talking about is something called an “unfunded liability” — and perhaps neither that person, and certainly nearly everybody else, actually knows what a pension plan’s “unfunded liability” actually is: One thing that it ISN”T — it isn’t an actual current debt. Here’s what an “unfunded liability” actually is, and why it’s in the news so much:
The label “unfunded liability” regarding public pension plans is in the news because Wall Street wants to convert public pension plans into lame 401(k) plans from which Wall Street banks and financial firms can reap a steady stream of billions of dollars in “management fees”. So, they have created a phony issue called ‘unfunded liability” that they use to convince people who don’t know what an unfunded liability is that the taxpayers are on the hook for piles of money. In simple terms, an “unfunded liability” is just an actuarial accounting process in which you take the current year’s small state contribution to the pension plan, which is typically a very small amount relative to a state’s overall budget (in most states it is no more than 5 cents of the state’s budget dollar), and then you add up each small annual contribution for the next 30 years, and the 30-year total is called the “unfunded liability”. It’s not an amount of money that the state actually owes at the moment, it’s just a sum of the small amounts over the next 30 years. For example, California contributes about $6 billion a year to the state pension plans out of the state’s $125 billion budget — that’s just 5 cents of the state’s budget dollar. When you add up that small yearly contribution over the next 30 years to get the “unfunded liability”, it totals $180 billion — and that’s the number that the enemies of public pensions use to scare people who don’t have a clue what an “unfunded liability” is…but what it is, is just the 30-year sum of a small annual budget cost that more than pays for itself in the amount of income taxes retirees pay on their pension income and in the number of jobs and amount of purchases that result from them spending their pension check. In nearly all states the “unfunded liability” annual amount is no more than 5 cents on a state’s budget dollar. And, as reported in the Los Angeles Times and other unbiased news sources, the spending by retirees of their state pension more than makes up for that 5 cents by generating sales taxes and supporting tens of thousands of jobs in retail, services, and manufacturing whose workers pay income taxes and also spend, more than making up for that 5 cents. Ending public pensions would eliminate all that economic activity and all those jobs. Former Rockefeller Foundation head Peter Goldmark has warned that cutting off public employee pension plans is for states “the economic equivalent of having a stroke.”
“Kentucky’s maniac governor” is furious that a national and local news source (ProPublica and Louisville Courier) are investigating his administration. So, what does he do? Bevin uses a dog whistle about Jews being behind it. Less than 2% of Pro Publica’s funding comes from Soros but, Bevin singled him out as the funder of Pro Publica.
One news report from Kentucky informed us Bevin enriched a former business associate that he appointed to his administration, by giving him a 134% raise, in the amount of $215,000 (the guy was on the job less than a year.) Meanwhile teachers and most of Kentucky’s state workers received no raises. (Daily Kos)