ATLANTA — Kentucky lawmakers will meet in a special session beginning the week of June 23 to address the state's mounting pension obligation.
Gov. Steve Beshear on Tuesday made the announcement, noting his proposals to deal with the state's unfunded pension liability of $26 billion.
"I am pleased that both the House and Senate leadership have announced they have reached agreement on pension reform legislation, which appears to be consistent with my proposal outlined to them on May 29," Beshear said in a news release. "My staff and I will be working with the House and Senate leadership to finalize the details of a draft bill. Assuming that these final details are ironed out I will issue a call for a special session of the General Assembly on June 23, 2008, to quickly pass that legislation. My staff has informed me that this is a date acceptable to leadership in both chambers.
The governor said he was "particularly pleased with the cooperation that has been demonstrated thus far, not only by House and Senate leadership, but by the various stakeholder groups that are affected by this very important and essential legislation."
Beshear's proposal to address the pension shortfall includes having workers contribute more to their retirement plans and working longer. The state estimates the unfunded liability could grow by $500 million through fiscal 2009.
In April, Fitch Ratings and Moody's Investors Service placed a negative outlook on some of Kentucky's debt. The outlook changes stemmed from the state using one-time sources of revenues, as well as its reserves, to support the budget because of declining revenue collections.
Kentucky does not issue general obligation bonds, but instead issues appropriation-backed debt through several state agencies.It has an issuer rating of Aa2 from Moody's. Standard & Poor's rates Kentucky AA-minus with a positive outlook.