The 2013 General Assembly may be a “short” session (odd-year sessions are 30 days, while even-year budget sessions are 60 days), but it still offers an opportunity to address many important issues. Key among them is fixing Kentucky’s public pension system, which is awash in red ink and in need of significant reform.
Kentucky’s business community, small and large companies of all industries from Paducah to Pikeville, is represented at the Capitol by the Kentucky Chamber of Commerce, the state’s largest and most comprehensive business association. President and CEO Dave Adkisson, said the organization’s top priorities are improving public education and creating an environment that promotes the creation of sustainable jobs. Those are tough feats to accomplish given the state’s poor economy (recently ranked 47th in overall financial health by Barron’s magazine). Click here
to download the Chamber's 2013 Legislative Agenda.
The Chamber’s 2009 Leaky Bucket report (and its 2011 update, Building a Stronger Bucket) attributes the strain on Kentucky’s economy to areas of unsustainable government spending: corrections, Medicaid and public employee benefits.
Recent years have seen steps to address Medicaid and corrections, but the unfunded liability of the public employee pension system demands attention.
“If the pension issue is not fixed in this legislative session, the problem will get worse,” Adkisson said. “There will be less funding for schools. I don’t think state employees will be able to expect pay raises in the foreseeable future. There will be service cutbacks, and our ability to recruit jobs in Kentucky will be scaled back.”
Dan Bork, VP of Corporate Tax for Lexmark International, Inc. in Lexington, agrees that the public pension liability must be addressed: “Government spending control as the Chamber has advocated in its Leaky Bucket reports is very important. Getting the government pension issue under control without raising taxes significantly will be the next biggest challenge facing the Commonwealth.”
To effectively avert the fiscal train wreck heading for our state, policymakers must enact serious, lasting reform to the public pension system. This involves bringing it more in line with the private sector, adequately funding reforms and addressing the rising costs of health-care benefits.
“If the pension system is not corrected in Kentucky, that would lead to higher taxes, and most people are not in favor of that right now,” Adkisson said. “Government has got to learn to live within its means.” Click to download
the Chamber's 2013 Legislative Agenda.