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State Senator Carroll on Why Kentucky’s Pension Structure Needs to Change

lrc.state.ky.us

Republican State Senator Danny Carroll of Paducah said he is supportive of the structure of Governor Matt Bevin’s proposed pension reform bill.

But, he said it’s important to understand it’s only in draft form, awaiting calculations and further discussion. He said he wants to see numbers (i.e. actuarial reviews) on how the changes will affect state workers. He referenced an infographic Bevin released on Monday, which claims that under the new plan teachers would have more money for their retirement.

Carroll said he understands those impacted by the changes have concerns as it impacts their families. He said that is taken into consideration in moving forward with the potential legislation. But, he said there is a bigger picture that legislators need to consider and that is the overall health of the state with regards to the under-funded pension system.

He noted that people in the private sector feel public sector benefits are excessive in some areas and are benefits they are excluded from.

Carroll said the bill’s current structure presents the fairest way to implement change with minimal relative impact to retirees and those soon to retire. “You can argue where that balance should be. Should you impact anyone that has more than 10 years? Is 15 years the cut off? There’s a lot of arguments to be made about where you put those breaks and where you try to implement this.” Carroll said.

"We're just in a situation that we have no other options left but to make changes. Everybody has their ideas about where the money should come from." Carroll said. "In my mind, it's a balanced approach where everyone shares in the burden and I think that's the fairest way to do it."  

Other Republican representatives in west Kentucky like Kenny Imes have said they would prefer to tackle tax reform before the pension crisis. Carroll said this will do nothing for the structure of the pension system, which he said needs to be changed to manage the mounting debt.

Carroll said the changes need to happen with consideration for the inviolable contract - part of a statute that protects pension benefits from reductions. He said after identifying savings from structural changes and get the unfunded liability to where it's manageable, legislators can then form a budget and follow-through with tax reform.

“As we do tax reform we do not make changes that burden - overburden - any one segment of our society - it’s spread out to where all are impacted but no one takes the brunt of it.” Carroll said.

He said there’s a misconception that the proposed pension changes are at the expense state workers as the state will still have to infuse $300 to $400 million into the system every year after the proposed changes - that's on top of the $1.2 billion put in last year.

He said the debt would grow between $700 million to a $1 billion each year if the pension crisis went unsolved, threatening other state-funded programs and initiatives.

He said the current pension crisis is quickly becoming one of the difficult issues the Commonwealth has faced. Carroll said it has been difficult to deal with on a personal level as well, saying that the changes will be affecting groups of people he has the "upmost respect for, including many personal friends."

Carroll said he won’t vote on the bill until he looks at the data surrounding proposed changes and would ultimately support a bill that doesn’t pass financial burden onto future generations. He said he is communicating with constituents on social media and understands their concerns. In the end, he said, even if people disagree with his decisions, he wants them to at least know that he listened to what they had to say and encouraged debate.

This story has been updated.

Taylor is a recent Murray State University graduate where she studied journalism and history. When she's not reporting for WKMS, she enjoys creative writing and traveling. She loves writing stories that involve diversity, local culture and history, nature and recreation, art and music, and national or local politics. If you have a news tip or idea, shoot her an email at tinman1@murraystate.edu!
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