COMMENTARY: There's Gold in Them Thar' Pensions!
By Jim Waters, Bluegrass Institute
LEXINGTON, KY - There's Gold in Them Thar' Pensions - By Jim Waters
For Kentucky legislators, the gold rush isn’t an historical phenomenon of sunny California’s past. It’s happening here and now in the Bluegrass State.
That’s largely because of House Bill 299, a little piece of legislation passed in 2005 that supersized our elected public servants’ pensions.
In fact, if the media attention and public outrage earned pension-increasing legislation in 1982 the label of “greed bill,” an appropriate name for the 2005 law might be the “golden greed bill.”
But this gold won’t be taken from previously untapped resources in the Golden State to benefit an entire nation. Rather, it comes from Kentucky taxpayers’ wallets for the betterment of an affluent political class.
A new Bluegrass Institute report reveals Kentucky legislators extract all the booty they can from HB 299.
The bill’s reciprocity clause allows legislators’ pensions to be based on their highest salaries for three years in any position with government entities participating in one of the commonwealth’s six pension plans.
So, state lawmakers who earn part-time salaries of $40,000 while in office but then work in other, six-figure positions get a pension based on the higher salaries.
An egregious example is former Rep. Harry Moberly, D-Richmond, who could get nearly $3 million in additional taxpayer-funded legislative pension benefits during his lifetime than he would without HB 299 – a bill he enthusiastically voted for.
Moberly can base his legislative pension on his salary of more than $168,000 per year as an Eastern Kentucky University administrator rather than on the $41,000 average salary he made during his final years as a legislator. It all adds up to a legislative pension of nearly $128,000 more per year than it would have been without HB 299.
After sitting in the legislature for a quarter-century, Moberly “maxed out” his legislative pension, making him eligible to draw a retirement check equal to 100 percent of his part-time legislative salary. It takes state employee 52 years of full-time work to max out their pensions.
Moberly, according to the report, “somehow was able to drop out of KERS so he could enroll in the teachers’ retirement system through his employer, Eastern Kentucky University – a move believed to have been done to enhance one or more of his three government pensions: legislative, KERS and university.”
In fact, Frankfort’s full of such double- (even triple-) dipping.
Sens. Walter Blevins, D-Morehead, and Dan Seum, R-Fairdale, and Reps. Tom Burch, D-Louisville, Jody Richards, D-Bowling Green, Tom Riner, D-Louisville, and House Speaker Greg Stumbo, D-Prestonsburg, all will draw both legislative and state workers’ pensions.
Stumbo will get a legislative pension based on his four years as attorney general rather than the quarter-century he has served as a legislator in the House.
Without reciprocity and double-dipping, the Speaker would get a legislative pension of about $40,000. However, the “golden greed bill” gives him a pension of $98,000 per year for the rest of his life, plus cost-of-living increases. It all could add up to a lifetime pension bonus of around $1.24 million.
Meanwhile, lawmakers voted not to include raises for state workers during the past two years while removing cost-of-living increases for retirees from the current budget.
The reciprocity clause of HB 299 puts elected officials in a retirement class all their own, according to the new Bluegrass Institute report: “Legislators work part-time. Nonetheless, the richness of their pensions far exceeds those of full-time state and local government employees. The gap is so wide and the greed so great that legislators have seriously compromised their ability – and credibility – to make the tough decisions needed to fix the $34.5 billion unfunded liability.”
But for lawmakers to tackle this issue, they will have to confront one crucial special-interest group: themselves.
— Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at email@example.com. Read previously published columns at www.freedomkentucky.org/bluegrassbeacon.