New laws added to help secure state retirement

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By Tom McKee

For the better part of the past year, there was no doubt what the biggest issue of the 2013 Regular Session would be: Stabilizing our public retirement systems for state and local government employees and their retirees.
Initially, it seemed as if the House and Senate would not be able to find common ground as both sides took different approaches to solve the problem.  
With the help of Gov. Beshear, however, leaders from both chambers were able to sit down and find a way that most members could support.
The final product is actually two different laws.  The first provides funding to pay down the sizeable liability, with the money coming from several different sources; individual taxpayers should notice little change, though.  
At the same time, this revenue plan puts in place a new tax cut for those who trade in their vehicle for a new one.  
Before, these buyers had to pay sales tax on the full cost of the vehicle, but now they will have to pay it only on what they owe, saving them potentially hundreds of dollars.  
This should help spur more sales of cars and trucks when it is formally put in place.
The new retirement plan, meanwhile, will only affect those hired after Jan. 1, 2014, who take part in the state and local government retirement programs.  
Their plan will be somewhat similar to a 401(k), but with some built-in protections, such as assurances that their account will see steady growth.  
Teachers will not be affected, since they take part in a different retirement system.
This approach could turn out to be a model program for other states, since most are facing liabilities as well measured in the billions of dollars.  
What is important to note is that Kentucky’s current employees and retirees in these systems now have much greater assurances that their retirement is secure.  They also will be eligible for future cost-of-living allowances if money is available.
Another benefit is that this action should improve our standing with the bond companies that provide money the state uses to build schools, roads and infrastructure.  
If we had not acted, these companies would have undoubtedly increased the interest rate on the state’s borrowing costs.
While our work on pensions was the highlight of the General Assembly’s final two days last week, there were several other noteworthy bills that are now poised to become law.
The most popular of those, and one I was proud to work on closely, would put Kentucky at the forefront among the states if the federal government either lifts its ban on industrial hemp or grants us a waiver to grow it in a highly controlled environment.
The plan would strengthen the Kentucky Industrial Hemp Commission and have it serve as the oversight organization if we are able to move ahead.  
It would gather advice from agricultural experts at our public universities, with the University of Kentucky’s College of Agriculture playing an especially important role as the commission’s administrative home.
As anyone who followed this issue knows, there was a lot of debate about how best to move forward on this crop, which can be used as a biofuel, paper, clothing and in the auto industry, among other things.  
In the end, everyone came away pleased with the final product.  
The hope now is that it can become a viable crop for farmers and generate a sizeable number of jobs.
Two other bills making it to the governor’s desk last week will help our healthcare providers and our men and women in uniform stationed overseas.  
The first would accomplish that by treating our Medicaid managed care organizations more like private insurers when there is a dispute over payment.  
If signed into law, this will hopefully cause cases like this to be resolved much more quickly for our doctors and hospitals.
The other bill will make it somewhat easier for those overseas to vote.  
The original proposal would have let our soldiers return their absentee ballots electronically, but concerns from some about the integrity of this system means that these ballots can now be emailed to the soldiers, but the soldiers must still mail their vote back.
I’m proud that some of the bills I sponsored this year are either law or should soon be.  
That includes my House Bill 295, which strengthens and protects the relationship between our agricultural and equipment dealers and the manufacturers they work with.
My goal of establishing a tax credit for farmers who donate surplus food they raised to non-profit organizations also made it through both chambers.  This will give our farmers even more incentive to help groups such as God’s Food Pantry feed those in need.
This short-year session – lasting just 30 days – accomplished a great deal.  In addition to the bills mentioned, we also put more oversight on our special districts; authorized more than $360 million worth of new or renovated facilities at many of our public universities; and set a path forward to raise the state’s high school dropout age from 16 to 18.
I want to thank everyone who contacted me during this time.  Although our work is done passing laws, the House and Senate committees will continue meeting throughout the year to study issues affecting the state so that we will be ready when we return in January.
If you would like to contact me, my address is Room 332B, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601.
You can also leave a message for me or for any legislator at 800-372-7181. For those with a hearing impairment, the number is 800-896-0305.