Budget Highlights: Public Pensions

Public pensions are a tough topic. They are complicated and the money we spend on them certainly does not create the same level of excitement as a new road or water project, broadband or education funding. However, they are critical to ensuring we have the public workforce to provide state services. After all, without pensions, we would not have Troopers or teachers, road crews or social workers.

The House budget passed earlier this year (HB 6/2024RS) continues our commitment to funding the Kentucky Retirement System (KRS) and the Kentucky Teacher’s Retirement System (KTRS). In fact, it funds them at the actuarially required contribution (ARC) rate, which is considerably more than that required by state law. Unfortunately, every dollar is necessary to ensure that the funds are solvent for future retirees, after more than a generation of the state’s leaders failed to properly fund them while their own boards and leadership adopted misguided policies.

These are the current pension provisions in the House Budget:

Kentucky Public Pension Authority:

• Provides $500 million to pay toward the unfunded liability of the Kentucky Employees Non-Hazardous Pension system

Kentucky Teacher’s Retirement (KTRS):

• Increases funding to the KTRS pension by $159.2 million in FY 25 and $302.1 million in FY 26, as well as directing the use of $29.3 million in FY 23 excess to continue paying not only the amount required by law, but meeting the actuarially determined contribution in both fiscal years
• Directs the use of $11 million in existing excess state funding for retiree health insurance in FY 25 and increases funding by $6.5 million in FY 26 to continue covering the cost of coverage for members who have retired since July 1, 2010, but are not yet eligible for Medicare
• Amends sick leave liability reporting language to require the full actuarial cost of member sick leave as a percentage of payroll and in total dollars by debt source by December 1, 2025 in order to get a more accurate accounting of the liability
• Increases by $900,000 in FY 25 and $1.7 million in FY 26 to update and maintain the pathway system

In addition, we also allocated $230 million towards the pension debt with the passage of HB 1:

• $100 million towards the unfunded liability of the Kentucky Employees Non-Hazardous Pension System
• $50 million for the Kentucky State Police Retirement Fund
• $80 million for the Kentucky Teacher’s Retirement System’s unfunded liability

In addition to highlighting public pensions, I would also like to take this opportunity to keep you updated on things happening in Boone County.

First, I would like to thank all the members of our community for the overwhelming support you showed to the family members and victims of the shooting that occurred on Saturday, July 6. It was heartwarming to see so many people at the vigil at Crossroads and the small local businesses’ support during the fundraisers for the families of the victims this past weekend. As we continue to grieve this tragedy, let us continue to support one another and pray for peace and healing for our community.

Secondly, the Boone County Planning Committee recently approved a commercial development plan at the corner of Richwood and Grand National Blvd, which will head to the Boone County Fiscal Court for approval before finalization. The proposed plan is for 28,000 sq. ft. and will include five buildings, which would be used for higher-end retail such as Starbucks, Chipotle, or a brick-and-mortar bank.

The Boone County Planning Committee also approved a zoning request for Jakes Farm, the 34.87-acre plot at Richwood/Schmidt Lane from Agriculture Estates to Suburban Residential One/Planned Development. The developer planned to make this either a high density 55-and-older community or a free-range pig farm. Upon news of the plan, many emails were sent in opposition and many people showed up to the fiscal court meeting, which was standing room only, to voice their opinions before the court. In response, the Boone County Fiscal Court asked Boone County staff to create a “finding of facts” document to justify the overturning of the plan, which will be ready at the next meeting of the fiscal court on July 23. As a result of the pushback, it’s possible that the court could move to read an ordinance that would overturn the planning commission’s recommendation for approval.