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In Kentucky, the situation is dire. KY’s pension system is ranked as the worst in the nation across several metrics and agencies. The pension system was written

In Kentucky, the situation is dire. KY’s pension system is ranked as the worst in the nation across several metrics and agencies. The pension system was written into our constitution as an “inviolable contract” with state employees. [0] Our current governor is the first to attempt to do anything about it in decades, and is being blasted by unions, the press, and the public for it. He’s most likely destroyed any chance of re-election by pushing hard for reform. He also hasn’t done a great job of building consensus, to be fair. The NEA/KEA especially has vehemently disagreed with any proposed reform. Teachers have walked out today in protest of a bill that did not affect any current state employees. It boggles my mind that people respond to this topic so irrationally. It’s like a patient arguing with their doctor over a diagnosis of cancer. [0] - https://www.courier-journal.com/story/news/politics/2017/08/24/kentucky-pension-crisis-question-answers/549085001/ https://www.courier-journal.com/story/news/politics/2017/08/...

justin66 9y ago
> Teachers have walked out today in protest of a bill that did not affect any current state employees. That bill is essentially a reduction in compensation for future employees, isn't it? You might not agree with their priorities, but there's nothing irrational about teachers objecting to that. > The NEA/KEA especially has vehemently disagreed with any proposed reform. Did any of the proposals include just raising taxes to fix the pension fund? Mathematically, it's not like there is really a wide array of options if you're going to honor the constitutional "inviolability" of that contract (which I'm sure the teachers want KY to do) and actually keep the pension going.
- oflannabhra 9y ago
  KY annually generates $2,600 of revenue Per capita through taxes. There is an estimated $15,000 liability Per capita over the next 30 years. That is if nothing gets worse. Some oversimplified calculation: $15,000 over 30 years would be $500/year, equivalent to a 20% tax increase. Increased taxation cannot resolve the crisis alone. But, the larger point is that there has not yet been any reform of the current situation
  - zeypher 9y ago
    Kentucky's state income tax rate is between 2-6%. If it would only take 20% increase in state tax receipts to make their pension system solvent, that's just a little over 1% increase in effective tax rate, which would still leave KY in the lower half of states by tax burden. If you make the tax rate change a bit more progressive, say 2% at the top, it could be zero change in income tax burden at median income and below. Kentucky also gives favorable tax treatment to retirement and pension income, so if you wanted to reduce a percived moral hazard of who pays and who benefits, KY could simultaneously reduce the preference given to lower the required rate changes further. Increased taxes can solve the situation fairly trivially, and still leave KY in the middle of the pack for total tax burden.
  - justin66 9y ago
    > Increased taxation cannot resolve the crisis alone. None of the numbers you mentioned support that conclusion at all.
- ng12 9y ago
  > You might not agree with their priorities, but there's nothing irrational about teachers objecting to that. I mean if your lifeboat is sinking why would you insist on cramming more people on? Axing pension benefits for future employees is much preferable to what would happen to current ones if the state goes bankrupt.
  - justin66 9y ago
    > Axing pension benefits for future employees is much preferable to what would happen to current ones if the state goes bankrupt. I assume the teachers understood that those are not the only two options.
nerdponx 9y ago
Teachers have walked out today in protest of a bill that did not affect any current state employees. This is why people are anti-union. It's unbelievably short-sighted.
- pnutjam 9y ago
  Bullshit, the legislature was short sighted. Over and over again they ignored this problem and usually exacerbated it. Now you want to hold the Union accountable?
- Avshalom 9y ago
  So you think "Fuck'em I got mine" is long-sighted?
dashundchen 9y ago
The problem with Kentucky and many other states is that the politicans raided the pension fund during good times to fund government operation, and then acts surprised when it's facing a huge shortfall. So it's disingenuous to paint this as greedy teachers and public servants when it was grossly mismanaged on the state politician side. However that seems to be a certain faction's goal. In addition, Kentucky teachers have worked under the assumption of getting a pension because the state never extended social security to them. They worked with lower wages and no future social security with the promise of pension would be there for them, sometimes as their only retirement income. How can you go back and threaten this pension when teachers took these low paying jobs under that assumption? https://www.bondbuyer.com/news/bevin-citing-pension-pressure-proposes-budget-that-cuts-70-programs https://www.bondbuyer.com/news/bevin-citing-pension-pressure... https://www.courier-journal.com/story/news/education/2018/03/20/kentucky-teachers-pension-reform-social-security/438031002/ https://www.courier-journal.com/story/news/education/2018/03...
- TAForObvReasons 9y ago
  "move fast and break things". Seriously though, short-sightedness and disregarding externalities like other people's lives is endemic in all areas of life. Sad world we live in.
- oflannabhra 9y ago
  Yes, I totally agree that the problem does not come from teachers. The problem comes from decades of shortsightedness of lawmakers. I only mentioned teachers because of their response, which is largely irrational. No ones benefits are being taken, the state is just ending a program that is unsustainable. The private sector did this decades ago. What happens if the state government goes bankrupt? That is not outside the realm of possibility with the current crisis.
  - SolaceQuantum 9y ago
    If what the parent above you said is true and teachers are not on social security then the reform of pensions does indeed harm them.

justin66 9y ago

> Teachers have walked out today in protest of a bill that did not affect any current state employees. That bill is essentially a reduction in compensation for future employees, isn't it? You might not agree with their priorities, but there's nothing irrational about teachers objecting to that. > The NEA/KEA especially has vehemently disagreed with any proposed reform. Did any of the proposals include just raising taxes to fix the pension fund? Mathematically, it's not like there is really a wide array of options if you're going to honor the constitutional "inviolability" of that contract (which I'm sure the teachers want KY to do) and actually keep the pension going.

oflannabhra 9y ago
KY annually generates $2,600 of revenue Per capita through taxes. There is an estimated $15,000 liability Per capita over the next 30 years. That is if nothing gets worse. Some oversimplified calculation: $15,000 over 30 years would be $500/year, equivalent to a 20% tax increase. Increased taxation cannot resolve the crisis alone. But, the larger point is that there has not yet been any reform of the current situation
- zeypher 9y ago
  Kentucky's state income tax rate is between 2-6%. If it would only take 20% increase in state tax receipts to make their pension system solvent, that's just a little over 1% increase in effective tax rate, which would still leave KY in the lower half of states by tax burden. If you make the tax rate change a bit more progressive, say 2% at the top, it could be zero change in income tax burden at median income and below. Kentucky also gives favorable tax treatment to retirement and pension income, so if you wanted to reduce a percived moral hazard of who pays and who benefits, KY could simultaneously reduce the preference given to lower the required rate changes further. Increased taxes can solve the situation fairly trivially, and still leave KY in the middle of the pack for total tax burden.
- justin66 9y ago
  > Increased taxation cannot resolve the crisis alone. None of the numbers you mentioned support that conclusion at all.
ng12 9y ago
> You might not agree with their priorities, but there's nothing irrational about teachers objecting to that. I mean if your lifeboat is sinking why would you insist on cramming more people on? Axing pension benefits for future employees is much preferable to what would happen to current ones if the state goes bankrupt.
- justin66 9y ago
  > Axing pension benefits for future employees is much preferable to what would happen to current ones if the state goes bankrupt. I assume the teachers understood that those are not the only two options.

nerdponx 9y ago

Teachers have walked out today in protest of a bill that did not affect any current state employees. This is why people are anti-union. It's unbelievably short-sighted.

pnutjam 9y ago
Bullshit, the legislature was short sighted. Over and over again they ignored this problem and usually exacerbated it. Now you want to hold the Union accountable?
Avshalom 9y ago
So you think "Fuck'em I got mine" is long-sighted?

dashundchen 9y ago

The problem with Kentucky and many other states is that the politicans raided the pension fund during good times to fund government operation, and then acts surprised when it's facing a huge shortfall. So it's disingenuous to paint this as greedy teachers and public servants when it was grossly mismanaged on the state politician side. However that seems to be a certain faction's goal. In addition, Kentucky teachers have worked under the assumption of getting a pension because the state never extended social security to them. They worked with lower wages and no future social security with the promise of pension would be there for them, sometimes as their only retirement income. How can you go back and threaten this pension when teachers took these low paying jobs under that assumption? https://www.bondbuyer.com/news/bevin-citing-pension-pressure-proposes-budget-that-cuts-70-programs https://www.bondbuyer.com/news/bevin-citing-pension-pressure... https://www.courier-journal.com/story/news/education/2018/03/20/kentucky-teachers-pension-reform-social-security/438031002/ https://www.courier-journal.com/story/news/education/2018/03...

TAForObvReasons 9y ago
"move fast and break things". Seriously though, short-sightedness and disregarding externalities like other people's lives is endemic in all areas of life. Sad world we live in.
oflannabhra 9y ago
Yes, I totally agree that the problem does not come from teachers. The problem comes from decades of shortsightedness of lawmakers. I only mentioned teachers because of their response, which is largely irrational. No ones benefits are being taken, the state is just ending a program that is unsustainable. The private sector did this decades ago. What happens if the state government goes bankrupt? That is not outside the realm of possibility with the current crisis.
- SolaceQuantum 9y ago
  If what the parent above you said is true and teachers are not on social security then the reform of pensions does indeed harm them.