Pensions Update

Click here to visit KentuckyPensions.com for more information.

Bringing about a flurry of facts and a storm of misconceptions, Kentucky’s pension crisis has become one of the most dominating news stories in recent months. One thing is for certain: if our state pensions are not addressed in the very near future, we will face huge cuts in state funding. Education, Medicaid, and other government services would likely be affected—a risk our state is not in a position to take.

So how did we get to this point? In the early 2000’s Kentucky’s pensions were in a healthy condition. While there was not one single cause for the pensions’ downhill slide, factors such as faulty assumptions led to underfunding which continued throughout the decade. The lack of proper funding over this amount of time eventually led to the critical state of our pensions today. The General Assembly took steps toward reforming the Kentucky Employees Retirement Systems (KERS) and the County Employee Retirement System (CERS) in 2013, but unfortunately the Kentucky Teachers Retirement System (KTRS) was not included in those measures and the problem continued to grow.

This is not a partisan issue. In 2016 the General Assembly—Republicans and Democrats—made a commitment to address the problem. This started with a dedication of $1.2 billion annually to help with the shortfalls in KERS and KTRS as well as establishing a permanent pension fund. We also hired a third party organization, the PFM Group, to investigate the state of our pension systems.

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In 2016, PFM was hired pursuant to legislation that passed 38-0 in the Senate and 99-1 in the House.

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On Monday, August 28, the PFM Group gave its final presentation to the General Assembly’s Public Pension Oversight Board, offering its recommendations on how to best address the problem. I, along with my colleagues in the General Assembly and Governor Bevin, will consider PFM Group’s recommendations and craft a plan that will be implemented in a special session.

What happens if we keep kicking the can down the road? The only path forward would be to cut funding in other areas of state government. Kindergarten-12 public education, already under the burden of larger class sizes, too few teachers, and a shortage of resources, could face cuts. Higher education would also feel the cuts and make college less affordable. Medicaid, public safety and infrastructure—all services of state government many would agree are mission-critical—would also suffer in this unfortunate scenario.

However, there are ways to avoid that situation. There is a path forward that allows us to balance our legal and moral obligation to our retirees while reforming the broken systems. Our priority is ensuring our retirees have a secure retirement that will provide for them in the years to come without taking away from other priority state programs. Addressing this crisis will not be an easy task, but I will continue to work alongside my colleagues in the General Assembly to ensure we find a solution that provides for our retirees while being responsible stewards for taxpayer dollars. Now that the study from PFM has been completed, discussions on specific policies will begin. If you have questions or concerns about pension reform, please do not hesitate to contact my office directly. If you would like to see the reports for yourself, head to kentuckypensions.com.

If you have any questions or comments about these issues or any other public policy issue, please call me toll-free at 1-800-372-7181 or email me at Whitney.Westerfield@LRC.ky.gov.  You can also review the Legislature’s work online at www.lrc.ky.gov.

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A Revenue Shortfall

Yesterday, the Office of the State Budget Director, John Chilton, sent out the press release linked below, indicating that General Fund receipts fell 0.3 percent and that Road Fund receipts fell 5.7 percent in the month of June.

As we head toward an anticipated special session to address pension reforms, and move closer to the 2018 Regular Session when we'll write Kentucky's biennial budget, the fiscal position of the Commonwealth continues to be precarious.  Difficult decisions lie ahead.

Right to Repair

An interesting public policy debate is happening across the country right now that runs across industries as diverse as cell phones and John Deere tractors.  In fact, those two examples are the subject of cases that have been in the news recently, presenting this question:

Do we have a right to repair the goods we buy? 

My instinctive response to that is, of course, yes.  And thank goodness, right?  I'm at the tail end of what is likely the last generation  (for a while) of consumers who are willing to fix things that break or wear out rather than running to the store for a new one. In fact, even my own inclination often follows the latter path when it comes to technology gadgets. But my oldest brothers (born in the 70's), and certainly my parents (born the in 30's and 40's) nearly always prefer the former.

It also strikes me that this policy ground should be already well plowed. Third-party (vs. manufacturer) repairs are not new.  Think of your car.  The Advance Auto Parts of the world wouldn't exist if we weren't allowed to be our own shade tree mechanics.  So why is this debate stirring up now?

Here are three stories of note worth checking out. The third is particularly interesting (and troubling) because it's about an internet-of-things manufacturer taking an affirmative step to remotely halt a device from functioning out of spite.  What do you think?  Do we have a right to repair?

SB200 Rebuttal

I am writing in response to the story “WDRB Investigation: New KY law contributes to rise in Louisville juvenile crime,” done by Mr. Gil Corsey. I was the sponsor of Senate Bill 200, a major 2014 juvenile justice reform law aimed at holding youth accountable, while getting youth and their families the services and programming they need to get back on track. I serve as chair of the Juvenile Justice Oversight Council monitoring its implementation. Since passage, we’ve meticulously reviewed data from across the juvenile justice system, which show better outcomes for youth and families statewide.

I took issue with a number of the points Mr. Corsey made in this story. In Jefferson County, 42% of youth who were put on diversion in CY 2016 had committed a status offense. Status offenses are behaviors that many kids need to be steered away from at one point in their youth, like truancy or tobacco possession, but they are not considered crimes for adults. The increase in diversion cases in Jefferson County is driven primarily by these status offense cases, not crimes. 

This is exactly what we want to see. Research is clear that for low-level youth, such as those committing status offenses, pulling them deeper into the system can actually produce the opposite of the desired outcome. The youth’s behavior often gets worse, not better. Instead of fixing the problem, the government ends up pulling the youth away from their family and isolating them more.

I also want to point out a problem with how Mr. Corsey categorized “serious violent offenses” in his recidivism definition. In that definition he included four different types of assault in the 4th degree, a misdemeanor crime that results in either no visible injury or only minor injury. These crimes are not included in the FBI’s Uniform Crime Reporting category of violent offenses, and as a former prosecutor I personally do not believe they should be considered “serious, violent offenses” in the same category as crimes like robbery, rape and murder.

This recidivism definition is important to clarify because more than one-third of diverted youth who Mr. Corsey categorized as serious, violent re-offenders were charged with some form of assault in the 4th degree as their subsequent offense. If you exclude those youth from his recidivism definition, less than 4% of youth who were diverted in CY 2016 have subsequently committed a serious, violent offense. This is an extremely low recidivism rate.

I believe these data are important to clarify because examining data related to Senate Bill 200 implementation is a core component of the Juvenile Justice Oversight Council’s responsibility. We have defined performance measures to routinely track the implementation of the legislation, and we regularly receive data reports from the Administrative Office of the Courts, the Department of Juvenile Justice, and other relevant agencies charged with policy implementation. 

In examining statewide data, we have seen many positive results from Senate Bill 200 implementation. Statewide, public offense complaints (offenses that would be considered crimes if committed by an adult) have continued to decline in the years following the reforms. While we have seen an increase in diversions, we have also seen that more than 90% of youth successfully complete diversion and are kept out of the court system, and the vast majority of youth who successfully complete diversion do not reoffend. When youth are successful in diversion, it frees up time for the juvenile court to handle more serious cases and for judges to use their resources on the cases that truly pose a risk to public safety.

Finally, I want to make a critical point about Senate Bill 200: this legislation did not change any statute related to how the most serious crimes can be handled in juvenile court, or impact any juveniles who commit such serious offenses that they end up being sent to criminal court. Senate Bill 200 was designed to curb unnecessary, ineffective and costly detention for the lowest level offenders, and provide more effective community-based programs to address problem behavior. This allows the state to prioritize  scarce resources in court and in the Department of Juvenile Justice to better address the needs of youth who commit serious offenses and have significant prior history. This can improve public safety and improve outcomes for youth, which should be the ultimate purpose of Kentucky’s juvenile justice system.

Sen. Westerfield Named Co-Chair

Earlier this year, the National Conference of State Legislatures named me, along with a colleague from the Nebraska Senate, as Co-Chair of a newly formed Juvenile Justice Principles Working Group.  My Co-Chair and I have been working with NCSL staff over the last few months to prepare for the group's upcoming meetings this year.  We aim to produce a report, or white paper of sorts, to guide states looking at reforming their juvenile justice systems.  Here's my release about the news:

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For Immediate Release
Contact: John Cox
859-492-2963
John.Cox@LRC.KY.GOV

SENATOR WHITNEY WESTERFIELD APPOINTED AS CO-CHAIRMAN OF NCSL JUVENILE JUSTICE PRINCIPLES WORK GROUP

FRANKFORT, Ky. (June 5, 2017) – State Senator Whitney Westerfield was recently appointed as co-chairman to the newly-established Juvenile Justice Principles Working Group, a subset of the National Conference of State Legislature’s (NCSL) Law, Criminal Justice And Public Safety Committee.

“It is easier to build strong children than to repair broken men.”

— Frederick Douglass

According to NCSL, the purpose of the juvenile justice work group is to discuss and develop a set of principles of effective juvenile justice state policy that NCSL will publish as a report to guide policy review and reform in the states. The report is intended to identify policy-making strategies that are rooted in research, reflect bipartisan/nonpartisan values, and help states invest in proven methods to put justice-involved youth back on the right track, while also keeping communities safe.  The principles and report will be an important tool that state lawmakers can apply both now and well into the future.

Senator Westerfield, the chairman of the Senate Judiciary Committee and a member of both the Juvenile Justice Oversight Council and Governor Matt Bevin’s Criminal Justice Policy Assessment Council, thanked NCSL for the appointment. “Our work in the juvenile justice system here in Kentucky has set a national standard, giving a template for several other states to follow, yet we still have so much to do to improve outcomes for youth and improve public safety,” said Senator Westerfield. “I thank NCSL for this opportunity and I look forward to bringing my experience to the table, working with many dedicated men and women from across the United States to shape policy that will help our children in Kentucky and across the country.”

The Juvenile Justice Principles Working Group’s first meeting is June 6-8. Senator Westerfield championed Kentucky's comprehensive juvenile justice reform in 2014, and the Commonwealth's 2017 criminal justice reform law, Senate Bill 120, and will be presiding at two of the conference’s meetings. Those meetings will focus on juvenile justice research and data and juvenile justice reform, both for which Senator Westerfield has been an advocate in Kentucky.
 

The National Conference of State Legislatures was established in 1975 and is a bipartisan, non-governmental organization dedicated to the success of state legislatures. NCSL has three main objectives: improve the quality and effectiveness of state legislatures; promote policy innovation and communication among state legislatures; and ensure state legislatures have a strong, cohesive voice in the federal system.

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