Rollback legislators’ uber-rich pensions

In the 2005 session of the Kentucky General Assembly, legislators made a bold raid on the public treasury. In a planned maneuver during the chaos caused by the logjam of bills in the closing days of the session, they sneaked through a bill (HB 299) without a public hearing. It enriched their own pensions so much, it made the infamous 1982 “greed bill” look like chicken feed.

As a result of the 2005 bill, for example, Rep. Harry Moberly is guaranteed a legislative pension of at least $168,686 a year, former Rep. J.R. Gray, is drawing an equivalent of around $400,000 a year as secretary of the Labor Cabinet, and House Speaker Greg Stumbo is locked in to a legislative pension of $98,824 a year* — all for working part-time as a member of the state Legislature. These are a few of the richest examples. Other enrichments, and potential enrichments, courtesy of the public treasury, exist in abundance. A detailed explanation of how the legislator’s retirement plan works is posted at www.kentuckyrollcall.com, archive, September 2009.

Gov. Steve Beshear took advantage of the legislators’ run-away greed last year by using their pensions to lure two GOP senators out of their elected seats, so the Democrats could try to win them in special elections — and, from there, possibly capture control of the Senate. Beshear gave Sens. Charlie Border and Dan Kelly state jobs. Borders went to the Public Service Commission as a commissioner at $117,000 a year. Kelly was handed a judgeship at $123,384 a year. But more than the salary or career change, it was, seemingly, about their pensions.

Under the 2005 bill, legislators who were serving in the General Assembly at that time or afterward are allowed to base their legislative pensions on the salary of a government job held once they leave the Legislature — or, before they came.

Borders’ ‘high-3’ salary as a legislator was $43,594 a year, and Kelly’s was $55,238 a year. Using their state jobs to figure their legislative pensions, instead of their part-time jobs at the Legislature, Borders’ picks up an estimated $1 million or more and Kelly an estimated $2.3 million, depending on whether they purchased extra years of service (not revealed to the public by law) and live to their life expectancy age.

What Beshear, Borders and Kelly pulled off, future governors can repeat, unless the 2005 law is rolled back. As it now stands, any legislator approaching retirement can be incessantly tortured by a temptation to yield on principles and vote for controversial bills backed by the governor. It could lead to a high-paying state job and an extra million dollars, payable monthly in his Golden Years.

The governor’s plan with Borders and Kelly fell short. The Democrats took the seat Borders vacated, but not Kelly’s. In Kelly’s senatorial district, Republican Jimmy Higdon, a House member from Lebanon, defeated the Democrats’ nominee, Jodie Haydon of Bardstown. Higdon won big, despite Haydon’s huge advantages in both voter registration and campaign funds. Kelly was an element in the election, but not a high profile one, in part because Higdon in 2005 had voted against the greed bill — and he had pre-filed legislation to roll it back.

Once Sen. Higdon was sworn in, he followed up on his rollback pledge by introducing SB 51, which passed the Senate 21-17 on Jan. 13 on a straight party-line vote. Sen. Bob Leeper, the independent, voted with the majority.

Upon its arrival in the House, SB 51 was assigned to the State Government Committee, and the committee chairman, Rep. Mike Cherry, D-Princeton, is expected of hold a hearing on the bill after the budget clears the House. Cherry’s committee is expected to vote to rollback the 2005 law, but have it apply only to legislators elected in the future. That is, all members of the General Assembly who served from 2005 through 2010 would be grandfathered in.

If Higdon’s bill passes the Democrat-controlled House, it would go back to the Senate for concurrence. That would likely throw the bill into a conference committee to iron out differences between the two versions. The most likely outcome is, the conferees won’t agree, the clock kills the bill, and legislators (with rare exceptions) go home happy about it.

The legislators’ retirement compensation right now is a big chocolate milk cow, which the public is feeding but is generally not aware of its existence. And shy of a public outcry, legislators will continue milking it, because the mainstream media, including Comment on Kentucky, has basically ignored the issue.

° Speaker Stumbo was Attorney General in 2005, and not in the Legislature when the pension-enrichment bill was enacted. However, when he returned to the Legislature in February 2008, he became eligible to calculate his legislative pension on his Attorney General salary, an estimated windfall of roughly $1.2 million. The Speaker would lose his windfall under SB 51, unless he rushed across town to the office of the legislators’ retirement plan and signed up to start drawing his legislative pension before the ink dried on the governor’s signature.

To read related stories, go to Kentucky Roll Call's main Web site at www.kentuckyrollcall.com. See Archives for July, August and September 2009. The site is password accessible, but we give free temporary passes to all visitors. Just send us an e-mail, to reese@kentuckyrollcall.com, and we'll e-mail you a free users name and password good for 10 days.