Officials hoping for retirement veto override

There is still a ray of hope for Kentucky cities, counties, school districts and others even though Gov. Matt Bevin vetoed a bill that would phase-in massive increases to worker retirement plans.

Governments were bracing and budgeting for increases of 28 percent for non-hazardous duty employees and 48 percent for hazardous duty, beginning in July.

Clark County was facing a $600,000 increase while the city was looking at $1.1 million. Clark County Public Schools was looking at a $613,000 payment, according to state data.

Earlier this week, the General Assembly overwhelmingly approved a bill which would phase the increases in over 10 years with a maximum 12 percent increase each year.

Bevin, though, vetoed the bill Thursday because it included language for employers to opt out of the retirement system.

If employers leave the system, there would not be enough money coming in to cover the required disbursements, he said.

“In their current fort, the buy-out provisions are well intended, but provide too much risk to the solvency of both the (Kentucky Educational Retirement System) and (County Employee Retirement System) systems,” Bevin wrote in his veto. “These provisions, as currently written, will lead to cash flow issues and shift even more of the pension burden to future taxpayers.

“Therefore, for the sake of fiscal responsibility, I must veto House Bill 362, while reiterating that the General Assembly should work to quickly re-enact the phase-in portion of the bill.”

Because the original bill was approved overwhelmingly in both the state House of Representatives and the state Senate, Winchester Mayor Ed Burtner and Clark County Judge-Executive Henry Branham said they are hopeful the veto will be overridden. According to state law, it takes a majority vote in both houses to override the governor’s veto.

“The best information I have, following text messages, is the Kentucky League of Cities believes the legislature will be able to override the veto,” Burtner said.

Legislators aren’t scheduled to return to Frankfort until April 13 to override vetoes.

Branham said the phase-in would cut the county’s payment in fiscal year 2019 from $600,000 to about $60,000. Burtner said he didn’t have the numbers but the city’s reduction would be “substantial.”

News of the bill’s passing was welcome, Branham said.

“Sometimes you don’t think about a veto, but it is a possibility,” he said. “I’m optimistic they’ll have the voted to override the veto.”