Update on quasi-public agency pension issue in Kentucky

FRANKFORT, Ky. (WKYT) - The drama surrounding Kentucky’s pension system continues.

Photo: WKYT/Hillary Thornton

Quasi-public agencies like regional universities and community health centers around the Commonwealth have their eyes trained on Frankfort.

A raise in pension contribution rates is something they’re fairly used to.

“The employer contribution rate has steadily increased. At one point it was 5.89 percent,” said Steve Shannon of the Kentucky Association of Regional Programs.

But the looming jump these agencies are currently facing takes the responsibility of employers from 49 percent to about 83 percent.

That spike will translate to about an additional $31 million earmarked for community health centers spent on pensions and not provisional services.

Community mental health centers around Kentucky often provide critical services to about 180,000 people a year, which is why they were thrilled when the Kentucky General Assembly passed a bill earlier this session locking them in at that 49 percent contribution rate for another year.

“It gave us a chance to plan for the next steps,” said Shannon.

But that sense of relief disappeared when Governor Matt Bevin vetoed the bill in April. But Bevin has responded by drafting his own bill that incorporates a one-year freeze. The only problem is that not all lawmakers are on board with the governor’s bill.

Bevin said he is waiting to announce a special session of the legislature until he has the support he needs to pass the bill. If nothing is passed, the new 83 percent contribution rate will kick in July 1.

As days tick by, Shannon says that those who work for quasi-public agencies around Kentucky are trying to figure out what next year will look like.

“Our business year is July 1 to June 30, so we are wrapping up this year,” said Shannon. “What is going to happen? What is the impact going to be?”

He says that if that deadline does pass and there is no solution to the pension problem, there’s no question that services will be cut.

The leaders of several quasi-government groups recently sent a letter to lawmakers supporting the governor's proposal and asking them to move quickly.