FRANKFORT, Ky. — Sen. Ralph Alvarado, R-Winchester, a physician running for lieutenant governor with Gov. Matt Bevin, recently sat down with The Bottom Line to discuss what can be done to address the state’s biggest issues.
Officials at the Kentucky Retirement System (KRS) have recently stated they feel the plan has finally “bottomed out” and expect to see improvements in the funding levels in the coming years. This news comes after the legislature and governor have started to put record amounts of money into the pension systems in recent years and reforms were made to KRS in 2013 to help with the future of the plan.
When asked if this news is an indication that lawmakers should simply continue funding and take any reforms to the pension plans off the table, or if additional reforms are still needed to ensure the long-term health of the plans, Alvarado said he believes changes will be needed, especially to the Kentucky Teachers’ Retirement System (KTRS).
“We have put in (more money) than anyone before, the only governor to put in that much money. And despite that, they still had a negative cash flow. That needs to be changed. The only way you’re going to change that is going to be with structural changes going forward,” Alvarado said. “I think without it, you’re not going to see the system survive.”
With the need for more money to go toward the pension systems, legislators have begun to tackle changes to the state’s tax code in recent years. With a goal of moving toward a more consumption-based tax code seen in surrounding states like Tennessee, Alvarado said Bevin and some other Republican lawmakers are interested in being aggressive and accomplishing substantial reforms in 2020, while avoiding missteps made by other states who moved too quickly and almost went bankrupt.
“You saw some of those consumption-based taxes pass a couple years ago. I think you are going to see other things added to that, it might be services, it might just be an increase in sales tax,” Alvarado said, adding that Bevin wants to see a repeal of the death tax to encourage people to stay in Kentucky and other tax policies.
A policy that could potentially be coupled with other tax reforms is increased infrastructure investment. After years of discussion about the need to make changes to the state’s gas tax and other aspects of the state’s road fund as Kentucky loses federal money and struggles to fund critical infrastructure, Alvarado said while it will be difficult to get the policy passed, he does believe those changes can be accomplished in 2020 if it is part of a larger package (discussion at 8:00 in the video below).
Kentucky continues to struggle with addiction issues with the opioid crisis taking center stage in recent years. As a physician, Alvarado says the epidemic is like a bucket with 50 holes and while a few holes have been plugged, there is still much more to do. He stated the attention on the issue recently has started to make a difference as patients come to him asking they not be put on anything addictive after a surgery and medical professionals embracing change when it comes to how they address pain.
“It’s going to take a combined effort from our churches, community leaders, political leaders, the business community, people going through substance abuse treatment now and have gotten through and to the other side of it help educate others because they’ve gone through it and know what to expect, and to start making more treatment options available,” Alvarado said (discussion starting at 4:30).
Watch the full interview segment with Alvarado below: