Uncertainty grew over the weekend concerning the anticipated special legislative session tackling tax reform and Kentucky’s troubled public pension system this fall, as Gov. Matt Bevin suggested Friday that it might only cover pensions, leaving tax reform to a subsequent session.
Bevin also further expanded his new pledge not to increase taxes to pay for the massively underfunded pension system for state workers, despite signaling in his State of the Commonwealth address in February that non-revenue neutral tax reform would need to be passed in a special session to prevent the collapse of this system. Some Republican legislators over the summer have voiced skepticism about any type of tax reform that raises revenue by raising taxes, saying they would want details about such a plan before any special session is called.
In a radio interview early last week, Bevin said that if the Kentucky General Assembly wanted to pass legislation that raises taxes to pay for the pension system, “they’re going to have to do it over my veto.” Bevin also suggested that people misinterpreted his previous comments about the tax reform solution not being revenue neutral.
“What I mean is, we have a very antiquated tax structure, but that’s a totally separate issue,” said Bevin. “I have in no way, shape or form ever said or implied, nor do I intend to balance the shortcomings of the pension system on the backs of taxpayers.”
Speaking to WEKU on Friday, Bevin again reiterated that he is not “intending to raise taxes to pay for the pension problem,” but added that tax reform may be left out of the coming special session entirely, instead dealing only with pensions and leaving taxes for another session in the future.
“It may require a separate special session or it may in fact require our ability to tag it on to this existing one, but at this moment in time my thought is to focus first on the pension issue,” said Bevin. “Then, that’s something we will be doing early this fall.”
The spokespersons for Republican House Speaker Jeff Hoover and Republican Senate President Robert Stivers did not return an email seeking comment for this story.
In his radio interview last week, Bevin also criticized legislators who have been skeptical of any special session to deal with pensions or tax reform until the governor shared his plan with them and lobbied for it to the voters.
“If I, the governor, have to go out and make the case to legislators and to the people, then those legislators do not deserve to be representing people in Frankfort. They don’t understand the severity of this crisis,” said Bevin. “If they don’t come (to this special session) with their A game, if they don’t come intending to fix this problem, then they should not be sent back to Frankfort in 2018, that’s a straight-up fact.”
With Bevin indicating that revenue raising tax reform measures are now off the table, state workers and teachers now fear that benefit cuts will be the governor’s path forward to solving the state’s pension system now estimated to have a nearly $40 billion unfunded liability, though Bevin in a Facebook video last week pledged that the state would fulfill its “moral and legal obligations” to retirees and employees with a public pension.