The Reason Why Kentucky’s Pension Reform Law Was Struck Down

The Kentucky Supreme Court in Frankfort

The Kentucky Supreme Court in Frankfort Shutterstock

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Gov. Matt Bevin, who championed the legislation, called Thursday’s state Supreme Court ruling “an unprecedented power grab by activists judges.”

In an unanimous but narrow ruling handed down on Thursday, the Kentucky Supreme Court struck down a controversial pension reform law that was championed by Gov. Matt Bevin and fellow Republicans in the legislature.

The measure, SB 151, passed in March but the way it won approval in the legislature faced scrutiny from Bevin’s critics, including teacher unions and Democratic state Attorney General Andy Beshear, who brought the legal challenge. State lawmakers approved the pension reform measure by suddenly inserting it into a bill on sewer systems, with critics saying that did not meet state constitutional requirements for the public to have enough time to comment.

According to the court’s ruling: “Upon review, we conclude that the passage of SB 151 did not comply with the three readings requirement … and that the legislation is, therefore, constitutionally invalid and declared void.”

Kentucky has one of the nation’s worst public pension shortfalls, with approximately $43 billion in unfunded liabilities. The proposal would have kept new public school teachers out of the traditional pension plan and put them in a "cash-balance plan" that is less generous, as well as making other benefit changes for both teachers and state workers, according to the Lexington Herald Leader

In a statement, Bevin decried the ruling as “an unprecedented power grab by activist judges.”

Beshear, who is running for governor in 2019, said in a statement that Thursday’s ruling is “a landmark win for every teacher, police officer, firefighter, social worker, EMS and all our hardworking public servants.”

The attorney general also said it’s “an important win for good government and transparency,” noting the process used to pass the bill. “Because of today’s ruling, an 11-page sewer bill can never again be turned into a 291-page pension bill and passed in just six hours.”

Reacting to the ruling, state Senate Majority Leader Damon Thayer told the Herald Leader that he wants to “rein in” state judges and may pursue judicial reform.

Michael Grass is Executive Editor of Route Fifty and is based in Seattle.

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