Senate Bill 1’s cuts to teachers unacceptable

Published 9:14 am Thursday, March 8, 2018

Dear Editor,

Please consider the huge drawbacks of Senate Bill 1 (SB1) on state employee pensions.

Teachers and non-hazardous workers move into a hybrid cash plan, which includes no inviolable contract.  The legislature can change its mind and alter benefit promises at will. There are neither cost of living upgrades nor a guarantee the pension will last a lifetime. Without this security, new public servants will be harder to find and experienced employees harder to keep. Also, the ‘level dollar’ system will cost the state more money short-term, ignoring that Kentucky’s economic growth would cover graduated payments. It doesn’t even pay off the most underfunded pension plans first.

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With SB 1, teachers’ retirement cost of living increases are cut in half (from 1.5% to .75%) FOR TWELVE YEARS regardless of inflation. Since Kentucky teachers do not receive Social Security, this is extremely burdensome and equates with a special tax on retired teachers. Remember, teachers have not gotten raises for quite some time.

School districts will have to pay an additional 2 percent of teachers’ pay into the pension system. The legislature, with myriad choices for raising funds, is shifting tax burdens to local government entities, which primarily are limited to raising property taxes. The effect on some areas already teetering on bankruptcy will be dire.                                                                                                                                                                             

Why is the legislature making their employees and lower levels of government pay for the pension hole they dug by not solving their revenue problems earlier? Why are they not finding the funding for keeping their promise to employees? The funding options are there, as well as the justification for using them. Income from taxation has not kept up with the growth of the economy. Tax reform is overdue but even tweaking the leaky tax situation has not been tried. Legislators could pull the plug on some tax breaks given out to special interests but of questionable benefit to Kentuckians generally.  

Instead, legislators are choosing to punish and squeeze their workers. Is this what being businesslike about government looks like? Any business worth anything knows they need to have enough money coming in to meet their commitments. Businesses also know they need well-educated and skilled employees for demanding jobs. To meet our common needs, Kentucky needs that, too.

If you agree that SB 1 is not good enough, call (502) 369-2815 and ask for your Senator. Tell your Senator to fund public pensions, not cut them.

Margaret Gardiner