2008 House Bill 113 (Limit use of public funds for joining outside organizations)

[Comments on this legislation] [Text and Analysis] [Add to Watch List]
[Previous] [Next]

Introduced by Rep. Robert R Damron on January 8, 2008, to prohibit government employees or agencies from using public funds to join organizations that have closed meetings, except under circumstances by which a state meeting could legally be closed.
- Referred to the House State Government Committee on January 11, 2008.

Line

Comments

Introduced by Rep. Robert R Damron on January 8, 2008. New Comment

1) Bill Huff [by Anonymous Citizen on December 11, 2007]
Kentucky budget must be spared more deficit spending. If this recommendation violates this proviso, scrap it!
Are retirement reserves supposed to be off limits?
Article below referred to “VIOLATED A CONTRACT BETWEEN THE STATE AND ITS EMPLOYEES” IN COURIER JOURNAL DATED July, 1994.

June 9, 1995
Kentucky Public Retiree
Bluegrass West Chapter
P.O. Box 8586
Lexington, Kentucky 40533-8586

RE: WHERE IS $23 MILLION PENSION FUNDS?

Dear Mr. Henson:
In July, 1994 State was ordered to pay $23 million dollars to the Kentucky Employees Retirement Systems. The Court order came as a result of a lawsuit filed by the Retirement System Board.
What is repayment status?
If the State has not reimbursed the Kentucky Employees Retirement system, what action is being taken to secure the repayment of these monies into retirement system?
In a June 2, 1995 edition of the Courier Journal the story reported that "A lawsuit over state contributions to the public-employee retirement system has grown into a larger dispute over constitutional separation of powers and delegation of authority."
The RETIREMENT BOARD asked for $220 million from the 92' General Assembly for the next two years to pay the state portion of the pension fund.
The 92' legislature appropriated $197 million, close to the same previous amount.
RETIREMENT SYSTEM OFFICIALS MAINTAINED THIS ACTION VIOLATED A CONTRACT BETWEEN THE STATE AND ITS EMPLOYEES. [Section § 61.692, KY ST, recognizes that public pension rights in the state retirement system constitute an "inviolable contract" and that benefits shall not be subject to reduction or impairment by alteration, amendment, or repeal. Jones v. Board of Trustees of Kentucky Retirement Systems, 910 S.W.2d 710 (Ky.1995)(recognizing inviolable contract between KERS members and state).
Section 19 of the Kentucky Constitution provides partial protection against impairment of contract. The retirement system has an obligation to set the amount of money needed each year and the legislature has to follow that direction, they said.
Through their lawyer testifying before the SUPREME COURT state maintains "THIS POSITION BY THE STATE RETIREMENT SYSTEM WOULD GIVE THE RETIREMENT SYSTEM BOARD, WHICH IS ELECTED BY RETIREES AND EMPLOYEES, THE POWER TO SET BENEFITS AND DEMAND AS MUCH MONEY AS IT WANTED".
The state's attorney SAID "...THE LEGISLATURE CAN LEAVE IT TO THE RETIREMENT BOARD TO RECOMMEND THE AMOUNT NEEDED, BUT ONLY THE GENERAL ASSEMBLY CAN APPROPRIATE MONEY".
HE WENT ON TO SAY "FRANKLIN CIRCUIT COURT TOOK AN UNPRECEDENTED STEP WHEN IT ORDERED THE GENERAL ASSEMBLY TO APPROPRIATE MORE MONEY FOR THE PENSION FUND".
The attorney for the retirement board, William Johnson, said "another constitutional provision is at issue---WHETHER THE LEGISLATURE MAY SUSPEND A CONTRACT BETWEEN THE STATE AND ITS EMPLOYEES TO PROVIDE A RETIREMENT PROGRAM".
The article stated "PREVIOUS COURT DECISIONS HAVE CONCLUDED THE BIENNIAL BUDGET CAN ACT TO SUSPEND OTHER STATUTES, AS IT HAS DONE RECENTLY WITH PAY RAISES OF LESS THAN THE MANDATED 5 PERCENT EACH YEAR FOR STATE EMPLOYEES".
The state's attorney in this case, Frank Chuppe, said "This case will decide whether the people of Kentucky, through their elected representatives...have for all time lost control of the $3.5 billion public-employee retirement system".
Also, lets not forget the President of the Senate, Eck Rose and Chairman of Senate State Government Committee, Senator Joe Meyer, pushed S.B. 64 in the 94' General Assembly which literally would turn over the decision of how much to fund the three retirement systems to the General Assembly that hasn't approved for years a budget that later didn't have to be cut substantially.
Clearly, S.B. 64 was retaliation for the original lawsuit filed by the retirement board.
The bill stated equivocally that legislature doesn't have to approve the contribution rate proposed by the independent actuary. That bill also removed current language which gives the systems' board power to give retirees limited cost-of-living increases when funds are available.
The biggest enemy of retired state employees (Public employees) is politicians raiding retirement funds to balance the budget to pay for big-money projects!
A case in point about politicians raiding retirement accounts to pay for big-money projects was a recent Courier Journal article dated June 9, 1995 entitled "JONES FINDS FUNDS FOR DALE HOLLOW" stated "Gov. Brereton Jones said money has been found to build a lodge at Dale Hollow State Park, a project that dates to the 1960s".
In the June 14, 1994 Courier Journal story the heart of the fight between the Senate and House was disagreement over the 17 construction projects at state parks. House leaders wanted to spend $3.2 million for initial design work on the projects, but the Senate leaders opposed $1.6 millions to design these projects in fiscal year 1995. Not authorized to build!

BUCKHORN LAKE NEW CONFERENCE CENTER 1,080,000
GENERAL BUTLER CONFERENCE CENTER 1,570,000
YATESVILLE LAKE MARINA DEVELOPMENT 1,200,000
LAKE BARKLEY COVERED POOL 1,460,000
CUMB FALLS NEW INTERPRETIVE CENTER 650,000
JEFFERSON DAVIS VISITOR CENTER 485,000
PINE MOUNTAIN DEVELOP LAKE AREA 2,955,000
LAKE BARKLEY GOLF COURSE EXPANSION 1,515,000
MY OLD KY. HOME VISITOR CENTER 760,000
KY HORSE CENTER ADDITIONAL STALLS 831,000
LAKE CUMBERLAND ADDED PARKING 540,000
YATESVILLE LAKE CAMPGROUND DEVELOPMENT 2,255,000
TAYLORSVILLE LAKE CAMP DEV 960,000
MINERAL MOUND PARK DEVELOPMENT 3,915,000
JENNY WILEY GOLF COURSE DEVELOPMENT 6,679,000
GREENBO LAKE COMMUNITY POOL 1,730,000
DALE HOLLOW LAKE LODGE COMPLETION 1,500,000

After the above chart appeared in the June, 1994 issue of the Courier Journal, the $3.2 million package was reduced, which excluded Dale Hollow Lakes project, along with others.
I think the time is past for retirees' representatives to call the Governor's hand on this move, especially in light of his administration's raiding of the retirement funds to balance the Kentucky budget!
It's press conference time! Sell it to the public as being part of the same old irresponsible spend, spend, spend attitude that the voters spoke to on November 8, 1994!!!! He obviously does not have the message!
Contacting the two gubernatorial candidates should be made concerning their positions on this question. The one supporting our position should be the one we work to make sure they are elected and then perform up to their promise!
Seventy-five percent of 1982 to 1996 Kentucky budgets fell victim to 'shortfalls'.
Below, compare Kentucky's 1976 through 2007 appropriations to expenses:

YR STATE
$5.8 BILLION & CHANGE, P.111
85-86 REPORT KY DEPT OF REVENUE

YEAR APP RESOURCES
1977 $1.21 $1.17
1978 $1.48 $1.44
1979 $1.70 $1.65
1980 $1.78 $1.73
1981 $1.89 $1.83
1982 $2.10 $2.04
1983 $2.20 $2.13
1984 $2.30 $2.23
1985 $2.55 $2.47
1986 $2.74 $2.65
1987 $2.88 $2.79
1988 $3.03 $2.94
1989 $3.29 $3.30
1990 $3.56 $3.53
1991 $4.31 $4.18
1992 $4.36 $4.53
1993 $4.51 $4.52
1994 $4.65 $4.64
2004 $7.42 $7.20
$7.64*
$7.87*
2007 $8.61* 8.60
*estimate
C.J., 1/28/04

From 1976 through 2007 Kentucky’s appropriations OUTPACED resources.
(Tax evason) defined as state not collecting owe and due unpaid taxes has existed for 23 years and no one seems to care!
Past and current General Assembly and Administration members knew about Kentucky tax evasion in Usage, property and weight-distance taxes.
When one delves into Kentucky's generation of tax revenues (resources) via it's OBSOLETE tax base, one finds Kentucky’s current and past tax base does not generate enough taxes to cover annual appropriations.
One major reason is tax base only taxes a miniscule number of “services”!
Continued "credit card" mentality by elected stewards has caused them in the past to "raid" Kentucky Road Fund of an estimated $400 million, rather than enhance resources or cut appropriations in sinct with resources!
Task force after task force have recommended a combination such as 1995 studies; i. e., COMMISSION ON QUALITY & EFFICIENCY recommended state expenses to be cut and enhancing resources report named KENTUCKY COMMISSION ON TAX POLICY. Only the "goodies" were adopted by elected stewards!
On numerous occasions the 2007 Medicaid deficit of $389 million has a partial remedy; i.e., state request federal medicaid waiver allowing medicaid eligible seniors to use medicaid funds for living in assisted living facilities.
Below documentation gives one an idea of anticipated savings to state's medicaid:

Assisted Living 1 BR apartment $32,573
Home with private Health Aide $50,977
Nursing Home SEMI-PRIVATE $75,000
Private Nursing Home $100,000

PRIVATE/STATE/FEDERAL PENSIONS
D/B=Defined benefit

Industry Longevity Salary Retirement
C.S D/B 25 years $50,000 8309
FERS D/B 25 years $50,000 4681
S.S. 25 years $50,000
Thrift/D/B25 years $50,000

PRIVATE SECTOR

D/B 25 years $50,000 2786
S.S. 25 years $50,000 1534
D/B 25 years $50,000 1907

1996-2005 Comparison of Average Pensions

1996 2005
Private $26,582 $40,505
State $31,397 $42,249
Local $28,320 $37,718
Federal $40,414 $59,864
Source: 2007 AFT Public Employees Compensation Survey: www.bls.gov

D/F=Defined Benefit

STATUS OF FULLY FUNDED STATE PENSIONS

Kentucky state workers has been given only 61 percent of the money estimated as necessary to pay for its future liabilities.
The national average is 86 percent. (Just fund state workers' 86%!
Kentucky Teachers' Retirement System has funds to cover 76 percent of its estimated needs.
County Employees Retirement System can cover 81 percent of its future needs.
Seven years ago no one seriously questioned status of workers' PRIVATE pensions.
However, prior to 2006 workers’ pensions of Dupont, IBM, Steel Industry, Airlines, Financial industry were decimated by Company bankruptcies; some workers lost entire pensions; some were significantly reduced.
PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974.
It currently protects the pensions of nearly 44 million American workers and retirees in 30,330 private single-employer and multi-employer defined benefit pension plans.
PBGC receives no funds from general tax revenues.
Operations are financed by insurance premiums set by Congress [WHO HAS ALLOWED COMPANIES IN ARREARS TO ESCAPE THEIR PENSION LIABILITIES BY GOING BANKRUPT AND COMING BACK AS ANOTHER COMPANY] and paid by sponsors of defined benefit plans, investment income, asset from pension plans trustees by PBGC, and recoveries from the companies formerly responsible for the plans.
PBGC pays monthly retirement benefits, up to a guaranteed maximum, to about 612,000 retirees in 3,683 pension plans that ended.
This includes those who have not yet retired and participants in multi-employer plans receiving financial assistance, PBGC is responsible for the current and future pensions of about 1,271,000 people.
AS OF SEPTEMBER 30, 2007 SINGLE EMPLOYER PLAN [33.8 MILLION WORKERS] WAS $13.1 BILLION IN DEFICIT;
MULTI-EMPLOYER PLAN [COVERS UNION WORKERS] WAS $1 BILLION IN DEFICIT. [PBGC HOMEPAGE]
In fact, today Federal Pension Guaranty program designed to protect workers who lose their private pensions is bankrupt.
Why?
Because over the past 7 years so many companies have been permitted to use bankruptcy as a way to cast off their pension obligations and liabilities! Once they emerge from bankruptcy as a newly named Company their retirees and workers' have lost part or all of their pensions. This behavior has desimated private pensions since becoming legal in last 7 years.
In 1994 Long Term Policy Research book called WAKE-UP CALL FOR KENTUCKY---OUT OF CRISIS INTO ACTION", identified following national trends for Kentucky's 1994 financial crisis:
(1) slower growth in the economy,
(2) increasing demand for services,
(3) lack of confidence in government and
(4) unwillingness to pay more taxes, especially in light of the major tax increase in 1990."
To enhance average growth rate of tax revenues in 1995 Kentucky Tax Policy task force recommended adding to Kentucky's tax base "services" industry, since it had been omitted accidentally through a codifying statute error in 1960.
Long Term Policy Research Center published 1994 article stating "Kentucky is facing a structural problem with the foundation of government---the budget. Shortfalls have become a recurring phenomenon in recent years. This means the lines of revenues and expenditures will not rebound properly, even if the economy rebounds.
It means that if KY continues to operate as it has in the past, KY will not have funds for Education, Health Care, Public Safety, essential infrastructure and other basic services."
In 1995 Commission On Quality & Efficiency recommended steps to undertake to improve Kentucky's budget problem: i.e., 1994 Long Term Policy wrote average growth of appropriations was 6% while average growth rate of revenue was 5.3%.
Suggestion made to General Assembly to equalize state expenses (appropriations) with state revenues (resources.
If nothing done by 2004 appropriations would grow an estimated 79% and revenues would grow 67% making 2004 appropriations 12% greater than 2004 revenues.
To reduce State appropriation level General Assembly passed legislation allowing several choices to be made to lower appropriations.
One such strategy recommended by Commission On Quality & Efficiency was lowering states appropriations by an estimated $1 billion dollars over next few years.
One of these recommendations was to lower personnel costs by $19.5 million! This was done by allowing older employees to retire early if willing to purchase enough service credit to receive full retirement benefits. Legislation granted them the use of all their accrued comp and sick & vacation time to make such a purchase. In addition legislation changed number of retirement years to calculate retirement; i.e., from 5 years to 3 years. Thousands of state employees took advantage of this gift and state's appropriations were well served.
Another recommendations was to lower state expenses by $291.1 million by freezing and abolishing future vacancies that are not considered critical or high turn over positions and reengineer those jobs.
Another Recommendation from 1995 was to replace defined benefit with a defined contribution retirement package applicable to new employees. This was projected to save (in 1995 dollars) $19.5 million.
A STATE TAX EXPENDITURE is an EXEMPTION, EXCLUSION OR DEDUCTION FROM THE BASE OF A TAX; A CREDIT AGAINST THE TAX; A DEFERRAL OF A TAX; OR A PREFERENTIAL TAX RATE.
All of these are listed in a report published by State Budget Director, Bradford L. Cowgill in a book entitled TAX EXPENDITURES ANALYSIS, FISCAL YEARS 2006-2008.
The Deficit Reduction Act of 2005 is Feds way of reducing size of Federal Government by $40 billion. It will take a large bite out of social programs, which mostly will become State’s problem.
States like Kentucky---where current tax base & rates funds approximately 52% while 48% of state's funding comes from Federal Government grants---will be hit hard if recession matures. Already, the Deficit Reduction Act of 2005 is significantly curtaliing state and local budgets!
If 2008 General Assembly does not reduce state appropriations significantly while simultaneously raising tax revenues, Kentucky's current services and benefits can’t be fully funded!

Sincerely,

Bill Huff
dash@copper.net

Reply New Comment

Line

2) ??? [by Anonymous Citizen on December 11, 2007]
Anybody know what organizations this bill is intended to target?
Reply New Comment

Line

Home
Create an account
Legislation watch
Search Legislation
Search Voting Record
Reports
- Recent Laws
- Missed Votes Report
Links
About
Tell a friend about this site