Groups Review State Pension Reform Proposals

Sep 18, 2017


As they draft pension reforms, Kentucky legislative leaders are seeking feedback from various interest groups. 

Indications are the state’s 138 lawmakers will go to Frankfort sometime in October to vote on changes to state public retirement programs.

House Majority Floor Leader Jonathon Shell says,without changes in law, the state employee retirement system would become a ‘pay as you go’ system within five years. 

The Lancaster representative says there’s a framework for pension reforms being laid out to interest groups.  

“We’re in the phase of shopping that out to the different interest groups, organizations that have an interest in this, whether it be the retiree groups, the county elected officials, local elected officials, school board associations, universities…so that they can see what that framework looks like…so we can get input from them before we actually put out to the public,” said Shell.

On the Senate side, Berea Senator Jared Carpenter envisions buy-in for an end product. 

“The information I’m hearing is very prosperous that we’re going to have an outcome that everybody can live with and be happy with and feel like they’ve been treated fairly with,” said Carpeter.  “So, I feel very good about it.”

Carpenter says enacting pension reforms is the top priority of everyone in the legislative body.  He says it’s an issue lawmakers hear about in grocery stores, restaurants, and at kid’s ballgames.

House Majority Floor Leader Shell believes a move toward a more consumption-based tax system would benefit the state. 

That goes along with comments made by Governor Bevin last week when he said eventually he’d like to see the state individual income tax phased out. 

Shell says the Commonwealth currently taxes prosperity where it should be focused on participation in the economy. 

“If you start looking at end product consumption, end product taxes, that’s the most fair way of paying taxes.  You get your prostitutes, drug dealers, illegal Mexican, anybody who’s not currently paying taxes because they are evading,” explained Shell.  “That’s put them into a pool to be able to pay that.  It’s the fairest way that we can tax our economy.”

During the next eight months to a year, Shell looks for a large movement from the legislature and governor’s office to move toward more of a consumption-based taxing system.  In the end, he says it would help to attract new businesses and grow current businesses in the state.​

Representative Shell and Senator Carpenter were among the dignitaries attending the ribbon-cutting for the second phase of Eastern Kentucky University's science building last week.