Gov. Matt Bevin’s proposal for how the state should spend money over the next two years would make steep cuts and set aside more money than ever before for the ailing pension systems. But even more money would be required if the legislature approves the governor’s plan to overhaul the state’s pension systems.
Bevin’s budget proposal sets aside about $3.3 billion for pensions, about 15% of the state’s two-year budget.
But administration officials say that amount could increase by hundreds of millions of dollars if the legislature approves a central tenet of Bevin’s proposal to overhaul the pension systems—shifting to a “level dollar” method of paying off pensions.
“Level dollar” means that the state contributes a fixed amount every year.
Currently, the state makes contributions expecting to pay more in the future because of increasing employment or salaries in state government over a long period of time.
Bevin said the state would be able to pay off its pension debt within 30 years using the method.
