Legislative Update for February 27, 2023
The 2023 Session of the Kentucky General Assembly passed the halfway mark this week. 286 bills have been filed in the State Senate while 594 bills have been filed in the State House of Representatives. The new bills filed this week include many “shell” bills that could morph into anything during the final days of the session. KRTA will keep watchful eye on bills that are of interest to Kentucky’s Retired Teachers. Currently we are tracking the following bills and will alert membership if they show signs of movement.
- Senate Bill 128 was filed by Senator Higdon and is an act related to sick leave reporting for the Teachers’ Retirement System. The bill would require each school district to annually report sick leave balances to TRS, beginning in fiscal year ending June 30, 2023. The bill would require TRS to report in the annual actuarial valuation the total liabilities and costs of the sick leave program.
- Senate Bill 149 and House Bill 350 was filed by Senator Douglas and Representative Bentley, respectively. Both bills are related to patient access to pharmacy benefits.
- Senate Bill 68 Sponsored by Senator Meredith relating to prescription drugs.
- Senate Joint Resolution 83 was filed by Senator Higdon and directs the establishment of the Public Pension Advisory Committee of the Public Pension Oversight Board.
- House Bill 553 filed by House Appropriation and Revenue Chairman Jason Petrie. This bill removes excess General Fund support for the actuarial cost of sick leave benefits for new retirees under the Teachers Retirement System.
Background
| TRS included funding of $39M per year for the cost of unused sick leave at time of retirement in their request for the 2022 budget. The budget enacted in 2022 included this funding, but during 2022, with higher than expected General Fund Revenue, the state paid off all the ‘Green Box’ dollars – money the state had previously borrowed from TRS.
Because the Green Box dollar debt was paid off after the 2022 budget was in place, the state took the position that they had double paid for unused sick leave. Appropriating the additional $39M per year ($78M over the biennial budget), while no longer necessary to cover the cost of unused sick leave due to the retirement of the Green Box debt, would still have helped reduce the unfunded liability at TRS.
However, HB 553 has been introduced to claw back this $78M – likely to help find the approximately $130M the state needs to stabilize the budgets of districts facing ADA loss due to natural disasters, COVID and other factors.
It should not go unnoted that using sick leave at the time of retirement is not part of the inviolable contract and there have been discussions about revising or even eliminating this benefit. However, bottom line regarding unused sick leave at time of retirement is that TRS still has the funds to cover this benefit and no legislation has been introduced this session that would revise or eliminate the benefit. |
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We have confirmed with Deputy Executive Secretary and General Counsel Beau Barnes that this simply reconciles the budget for an overpayment of approximately $39 million to this fund. HB553 does not impact sick leave accumulation for active TRS members in any way.
KRTA staff, lobbyists, and legislative volunteers are closely monitoring the progress of these bills. As we enter the second half of the short session, please stay connected to KRTA for legislative alerts. Your advocacy makes a difference.
The Public Pension Oversight Board is scheduled to meet on Monday, February 27.
In the meantime, below is a link on how to sign up for text alerts.
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Warm regards,
Tim Abrams, Executive Director
