Republican plan to ‘fix’ pensions continues the beatdown of retirees and workers

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By Terry Mills

Governor Bevin’s promised call for a special session to deal with our pension crisis will cost more than $60,000 per day for Kentucky taxpayers and $220,000 per day for consumers (that’s how much lobbyists spent per day during the 2017 session and yes, consumers ultimately pay for lobbyists). I don’t really understand why this couldn’t be done in the regular session since the proposal is essentially the governors’ plan and he has a super-majority in both the House and the Senate. He should easily have the votes to approve the plan if it is good for Kentucky. After all, most republican legislators have bought into all ideas pushed by the governor.
The plan being pushed by Bevin and Republicans to “fix” Kentucky’s pension crisis continues the beatdown of retirees, working Kentuckians, teachers and public school employees. The plan was conceived and crafted behind closed doors without the transparency republicans claim they support. While serving in the General Assembly, I remember many booming speeches from republicans about the importance of transparency by the majority party. Seems it isn’t so important now that republicans are the majority. Many republican leaders have proclaimed that their solution solves the crisis without hurting workers or retirees. I do not believe that is true.
Here are a few of the changes that I believe will harm workers and retirees:
- Move from defined benefit to defined contribution system. There is a complex discussion about this but the bottom line is that a defined benefit system guarantees a secure retirement after a long career. A defined contribution system guarantees only that workers pay into the system and assume risks associated with private investments.
- Suspension of COLAs is appropriate only if there will be no increase in the cost of living. If consumer prices rise and your income stays the same, then that effectively decreases the value of your income.
This decrease is never recovered. Or another way of explaining this is what I often hear from working people: “Everything goes up except my pay.”
- The take-home pay of teachers and other employees is CUT if this plan is approved. That’s due to increased contributions required for health care and increased 401(k) contributions to produce an equivalent retirement benefit.
- There is no consideration given to additional revenue in this plan.
Employees are being asked to pay more to generate more revenue.
Refusal to consider legalizing casinos means a loss of $300-$500 million in revenue per year. This is money spent by Kentuckians to give tax revenue to other states. This revenue could be dedicated to pensions to help a lot in solving our financial crisis. If our governor sees a problem with the “societal costs” associated with casinos, someone needs to inform him that we already have that problem because Kentuckians are going to casinos in neighboring states. Why in the world wouldn’t we want that revenue to go to Kentucky rather than surrounding states?
There are other changes which I believe disrespect our teachers and other public workers in this proposal, such as the elimination of unused sick days for retirement calculation purposes and other negative changes as explained by the Kentucky Center for Economic Policy.
The one part of the proposal that is needed is the part that puts legislators in the same plan as other workers. I never understood why part-time legislators even get a pension!
The proposal by republicans in Frankfort continues a disturbing beatdown of middle and lower income workers in Kentucky. They have already reduced wages of construction workers (repeal of prevailing wage law) and severely damaged the collective bargaining power of many workers (passage of a so-called right-to-work law), which I believe lowers wages for many Kentuckians.
Governor Bevin reduced by executive order the rate of pay for the lowest paying jobs in state government. Republicans refuse to even debate an increase in the state’s minimum wage. Some would consider this a war on workers like we’ve never seen before. The irony of all this is that better wages not only lead to a better life for families, but also generate more consumer spending to help businesses and tax revenue, which could be used for pension solutions.
This beatdown will only continue and intensify as long as republicans control the governor’s office, the House and the Senate. We need to restore balance and elect people who care more about middle and lower income Kentuckians than those currently in power.
Maybe some candidates who support regular working people will run for office and get elected in 2018. Heaven knows our middle and lower income workers and retirees need them!
Editor’s note: Terry Mills is a former democratic state representative and resident of Lebanon.