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Bluegrass Beacon: Judge’s pension reform ruling may have unintended consequences

By JIM WATERS
Bluegrass Institute for Public Policy Solutions

Thursday, June 21, 2018 — Franklin Circuit Judge Phillip Shepherd’s ruling that pension-reform legislation passed on the 57th day of this year’s 60-day General Assembly session is unconstitutional because it allegedly didn’t get three readings in both the state House and Senate is wobbly and less than courageous.

Senate Bill 151 received three readings in the Senate and two in the House in its original form as a wastewater-treatment bill.

However, before the third reading occurred, the House gutted the bill, substituted pension-reform language, held the third reading and passed it by a 49-46 margin followed by a 22-15 tally in the Senate.

Opponents, including Attorney General Andy Beshear, whose lawsuit brought the case to Shepherd’s court, are gnashing their teeth over the fact that legislative leaders employed this often-used and, truthfully, much-despised, procedural maneuver – to pass a weaker version of an earlier pension bill that stalled after thousands of state workers, teachers and retirees marched on the Kentucky State Capitol.

While Shepherd rightly asserts that Section 46 of the Constitution requires “every bill shall be read at length on three different days in each House,” I’m still searching for where that document allows a member of the judicial branch to interfere in legislative bodies’ rules and procedures.

Shepherd by doing so is potentially opening up a can of big and dangerous legislative worms.

Many bills – including those containing benefits covered by the inviolable contract protecting retirement benefits – have passed using the same procedural scheme.

Wouldn’t the well-accepted notion of judicial precedent render those bills endangered as well?

If, for example, House Bill 362, which allows local governments to phase in much-higher pension payments rather than being forced to absorb a huge increase immediately, is nullified, “it could force cities and counties across our state into financial distress and possible bankruptcy,” Blake Brickman, Gov. Matt Bevin’s chief of staff warned in a recent op-ed.

If the Kentucky Legislature’s pension-reform bill is declared unconstitutional because it used an amended version of an unrelated bill read earlier, would legal consistency require that the Affordable Care Act, which also was introduced as an amendment attached to – as National Review once described – “a nondescript, uncontroversial House bill (the ‘Service Members Home Ownership Tax Act of 2009’) that had unanimously passed (416-0) in the lower chamber” also be nullified?

Do we now have yet another reason to call Obamacare “unconstitutional?”

Kentucky lawmakers serve on a part-time basis and are constitutionally limited to 60 days during even-numbered years to pass a budget and consider hundreds of other bills.

“It’s not like we’re Washington, D.C. — where congressmen are there practically year around,” Owensboro Republican Sen. Joe Bowen told me. “If something new comes up after the deadline for filing new bills or something needs to be changed, the only available tool is to take a bill that’s in play and substitute the language in its place. It’s been done for years and years; we didn’t suddenly invent that practice this year or specifically for this bill.”

SB 151 represents a small bite of the apple inching us closer to the core of pension reform by getting rid of some egregious benefit-spiking, creating a more stable cash-balance approach for new teachers than current members’ declining defined-benefit plan and establishing a funding mechanism designed to make progress in paying down the commonwealth’s $60 billion liability.

Beshear, who’s offered no ideas on addressing the crisis beyond extracting more dollars from taxpayers or gamblers, claims the bill violates the state’s inviolable contract.

Yet he and teachers’-union boss Stephanie Winkler fought vigorously to avoid depositions that would have questioned them regarding the specifics about what benefits are actually covered by such a contract.

Shepherd doesn’t have the courage to address the pension-benefit structure or inviolable contract either, choosing instead to hide behind the black robe of procedure.

Meanwhile, that liability continues to swell.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.

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