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March 7, 2018

Kentucky employees and teachers could see health costs leap 50% under budget plan, critic says


FRANKFORT, Ky. — A Kentucky House proposal to transfer $481 million out of an employee health insurance fund could result in much higher premiums for thousands of teachers and other public workers, critics say.


“This is a huge concern, in some ways more so than the pension issue because it would have a more immediate, significant impact,” said Brent McKim, president of the Jefferson County Teachers Association “… It would come next year and the year after, and we could be looking at premium increases as high as 50 percent.”

David Smith, executive director of the Kentucky Association of State Employees, said, "It's a tax on state workers. ... It's bound to cause our workers’ health costs to go up.”

Last week the House revised the austere budget proposed by Gov. Matt Bevin in January, restoring money that Bevin would have cut in many areas of public education and higher education. The House found money to do so with a collection of modest tax increases — and with the massive transfer of funds from the Kentucky Employees’ Health Plan.

For several years this health insurance fund has accrued big surpluses. And governors and lawmakers have repeatedly tapped those surpluses to enhance spending in budgets strained by weak growth of tax revenues and soaring pension costs.

In the current 2016-18 budget, for instance, the fund is tapped for $250 million each year.

The budget Bevin proposed in January called for transferring another $201 million from that fund over the next two years. But last week the House increased that to nearly $481 million.

The Kentucky Employees’ Health Plan is administered by the Personnel Cabinet and insures about 146,000 teachers and public employees plus their family members. It gets roughly 80 percent of its money in contributions from the state and about 20 percent in premiums from the employees, said McKim, who sits on the board that oversees the plan.

As of Dec. 31, the fund had a balance of $728 million, according to the Personnel Cabinet's website.

But Jason Bailey, executive director of the Kentucky Center for Economic Policy, said his analysis of the fund's online records shows that more than $300 million of that must be transferred to the state's General Fund before July 1 under terms of the current state budget.

McKim said by transferring $280 million more out of the fund than Bevin proposed to transfer, the House budget would depart from past practices of tapping only surplus funds.

He said he was told by Personnel Cabinet officials that the move would likely result in premium increases of at least 10 percent for 2019 and as high as 49 percent in 2020. “Or the alternative would be to change the plan design by reducing the benefits. You pay one way or the other,” McKim said.

Smith said: “The concern is simple. The fund bases its decisions on what money is there. So the less money is in there, the more they charge state workers.”

Personnel Cabinet Secretary Thomas Stephens did not respond to a request for an interview about the fund. But Jodi Whitaker, the cabinet’s spokeswoman, said in an email that the much lower amount that Bevin proposed to be transferred out of the fund would not result in any premium increase for plan members over the next two years.

Rep. Steven Rudy, the Paducah Republican who chairs the House budget committee, said he believes the transfer can be made without such pain.

“We believe that it can," Rudy said. "We feel like if it was a private insurance company this would be the profits from that private insurance company. We are self-insured. This is taxpayers’ money that has gone into this thing. We took the excess from it and invested it back into state government.”

But Rudy added, “This is not the final product,” and said that the House is open to discussing the matter with the Senate as the final budget is hammered out over the next month.

Sen. Chris McDaniel, a Taylor Mill Republican who chairs the Senate budget committee, said the impact of the House move will be thoroughly examined by his committee. “We’ve got our people digging into that. It’s among the first things we’re trying to determine,” McDaniel said. “I know what the House did was with good intentions and applied to good purposes. But at the end of the day, depending on who you are talking to, the effects vary.”

McDaniel said he expects his committee will finish its review and approve a revised version of the budget bill within the next two weeks.

By Tom Loftus
Louisville Courier Journal

March 3, 2018

Jones says he is a 'no' vote on budget, pension plan

By Senator Ray S. Jones, II

FRANKFORT — This week, advocates lined the Capitol and Annex hallways, meeting rooms, tunnels and anywhere there were legislators. Unhappy Kentuckians --specifically school and public employees, active and retired – were seeking support for their pensions. The event corresponded with the committee hearing on the Senate Republican’s pension proposal, Senate Bill 1.

State Senator Ray S. Jones State Senator Ray S. Jones No action was taken on the bill in the Senate State and Local Committee. We were told the bill is being modified by a Senate committee substitute. There was brief testimony, following a breakdown of SB 1 by the bill sponsor who is also committee chair. As to the committee substitute, it arrived late Thursday. I read the proposal. The modifications made were not significant enough to change my mind about SB 1. The changes will not fulfil the obligations we have to all those whose lives and livelihood it will ultimately affect.

As it stands now, I do not support SB 1. I cannot, in good conscience, vote favorably on a bill that will be detrimental to so many school personnel, public employees, retirees, and all those associated with the retirement systems.

This bill has grave effects on teachers, state troopers, social workers and an ongoing list of people with whom we depend daily for services. Further, it will do great harm to our education system and our government agencies because recruitment and retention will be made much more difficult. Not only will the bill in its current form have a negative impact on Kentuckians, but it will also have an adverse effect on fundamental services. For instance, it will increase the financial hardship on school districts across Kentucky – putting many districts, especially districts in eastern Kentucky, in a financial crisis. This legislation will endanger public services provided to our most vulnerable citizens and the retirement situations of many of our elderly citizens.

Another factor to consider is that Kentucky's attorney general Andy Beshear has said that large parts of the bill are illegal because they disregard the inviolable contract of current state, city, and county retirees.

In my opinion, SB 1 is bad public policy. It will hurt school employees, public employees, taxpayers, local school districts and public education, and hamper government agencies and services. It is not good for individuals and is not good for Kentucky.

Unless the amended version overhauls the bill to create legislation that keeps our pension promise to teachers, public employees, and retirees -- I will continue to fight the legislation.

Having passed the two-thirds mark of the 2018 session, our pace will continue to pick up. The House has passed its version of the two-year budget and tax reform. Those bills have just arrived in the Senate and I will be reviewing those, along with any changes to the pension reform bill.

Over the next few weeks, the number of bills voted out of committee and on the floor will increase significantly. It is more important than ever that you stay engaged and share your input. To follow bills or check a bills status, go to To leave a message for any legislator, call the General Assembly’s Message Line at 800-372-7181. You can also e-mail me at This email address is being protected from spambots. You need JavaScript enabled to view it..


March 3, 2018

EPA proposes rollbacks to Obama-era pollution rules for coal ash waste, air pollution from oil and gas drilling


The Environmental Protection Agency announced significant changes Thursday to Obama-era regulations governing air pollution from oil and gas operations and coal ash waste. States and utilities would have more freedom in how they dispose of such wastes, but detractors say the revisions would lead to a dirtier environment and could be hazardous to human health.

"The announcement came on the eve of a deadline for utilities to release reports documenting coal-ash contamination of water supplies at hundreds of power plants across the United States. The pollution reports were intended as a first step toward cleaning up the contamination leaking from the ash pits," Michael Biesecker and Matthew Brown report for The Associated Press.

"The EPA also proposed amending rules to give state regulators more authority over how utilities dispose of the ash left behind when coal is burned to generate electricity. The gray ash, typically dumped near coal-fired power plants in unlined pits, contains toxic heavy metals such as lead and arsenic that over time can leach into groundwater or nearby rivers, potentially contaminating sources of drinking water," Biesecker and Brown report.

Another part of the Obama-era standards were aimed at reducing the amount of methane and volatile organic compounds released from oil and gas drilling operations. Methane is a greenhouse gas that contributes to global warming, and VOCs can aggravate respiratory ailments and lead to early death. The agency said the proposed changes will save utilities $100 million per year, and oil and gas operations up to $16 million by 2035.

The EPA said it will accept public comment on the proposed changes for 45 days, and will hold a public hearing.

Written by Heather Chapman