By Jacqueline Pitts, The Bottom Line
As time begins to run out for a special session in 2017, conversations are ramping up around the possibility of reforms to the state’s pension systems and tax code as House Speaker Hoover has confirmed he will call all 100 members of the House back to Frankfort to discuss the issues in the coming months.
According to a story first reported by the Lexington Herald-Leader, Hoover will be calling all House members to the Capitol August 16 “to bring members up to date on the budget, tax reform and pension reform.”
That date is significant as Gov. Matt Bevin recently stated that a special session to tackle pension and tax reforms will be called sometime after August 15.
However, House leadership has stated they still haven’t seen any plans from the Bevin administration on such reforms. Because of this, Hoover told the Herald-Leader, the meeting of House members may be delayed until after August 30, when the final phase of audits performed on Kentucky’s pension systems will be presented to the Public Pension Oversight Board.
The final phase of the audit is expected to have recommendations on how to shore up the systems moving forward. That presentation has already been delayed once as it was expected to take place at a July 31 meeting of the PPOB.
Meanwhile, Kentucky’s credit rating was downgraded by Moody’s to an Aa3 rating. The agency warned bond investors that the state does not collect enough revenue to resolve public pension shortfall amounting to billions of dollars.
In a recent report published by Moody’s, the group once again downgraded the state’s credit rating citing the unfunded liability in Kentucky’s pension systems continuing to grow and becoming one of the worst in the nation. The agency cited the state’s ability to stop the decline in pension funding levels as a crucial part of fixing the credit profile.
“Kentucky’s low wealth levels will challenge the commonwealth to raise revenues going forward,” Moody’s wrote.
Ratings agency Standard & Poor’s also downgraded the state’s credit rating most recently in September 2015 also citing Kentucky’s pension liabilities.
As Kentucky’s pension crisis continues to be the main financial threat facing the Commonwealth, House Speaker Hoover recently told his constituents that a special session could focus primarily on pension reforms rather than taxes and pensions.
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