There was much groaning in Frankfort when the Kentucky Supreme Court in 2018 struck down sound pension reform legislation passed during that year’s General Assembly.
The court’s unanimous decision ruling Senate Bill 151 unconstitutional had little to do with its substance.
Rather, the court took issue with the way it passed.
Amid heated protests led by teachers’ union bosses intent on obstructing meaningful change to their unsustainable retirement system, legislative leaders employed an end run strategy — gutting unrelated legislation that already had two of the constitutionally required three readings and replacing it with the pension bill which received a single reading, and that only by title.
It didn’t help that the legislation replaced a proposal to assist wastewater treatment plants, thus allowing pension reform opponents to deride it as a “sewer bill” in over-the-top statements.
Ben Self, then-chairman of the Kentucky Democratic Party, huffed that the court’s decision sent “a clear message” to lawmakers: “you can’t change a sewer bill in the middle of the night and use it to flush the retirement benefits of our teachers, police, firefighters and other state workers at the last minute with no public input.”
While Self’s mischaracterization of the bill’s content was distasteful, his complaint that legislative sleight-of-hand used to pass the bill limits “public input” isn’t without merit.
The Supreme Court had another concern — pointing to Section 46 of the Kentucky Constitution in ruling that the process used to pass SB 151 denied lawmakers themselves the “fair opportunity” to consider a bill before voting on it.
Kentucky’s founders sought to ensure such opportunity by insisting in the commonwealth’s foundational document that “every bill shall be read at length on three different days” in both the state House and Senate.
While the Constitution also allows a majority to vote to dispense with the “second and third readings,” the pension bill read by title only on its third reading was totally different from the wastewater-treatment bill which had received two readings.
Even those who favored the substance of the pension-reform legislation frowned on the process.
“While we understand that legislators have taken a similar approach with bills in the past, they should not have done so with legislation of this magnitude,” Dr. Bill Smith of the Bluegrass Institute Pension Reform Team said in response to the court’s ruling.
Sometimes such bill conversions occur when lawmakers want to introduce new legislation upon which agreement is reached after the deadline for filing new bills.
More often, however, it’s used as a tactic to avoid the transparency which comes through forcing bills to travel the entire legislative gauntlet with several readings and sufficient time to introduce and consider amendments, and the accountability which is served by getting legislators’ comments on the record during floor debates before votes are cast.
While the reforms in the 2018 pension bill were the right policy, it’s more often proposals harmful to taxpayers’ interest which get fast-tracked around the spotlight of readings and debates.
Similar chicanery during this year’s session resulted in House Bill 321, originally filed only as “AN ACT relating to revenue,” getting altered twice.
First, it got changed in the House to benign legislation requiring the Department of Revenue adhere “to any extension of the 2020 federal income tax return filing or payment for Kentucky income tax purposes.”
The unanimous vote approving the bill was unsurprising; few politicians would even consider opposing an extension of the deadline for filing tax returns.
But the bill morphed again in the Senate into a legislative blob creating a controversial tax increment financing district in west Louisville which will allocate up to $1 billion in sales and property taxes over the next 30 years to a board largely unaccountable to taxpayers.
Lawmakers were asked to vote on this version of the bill a half-hour before the entire legislative session ended.
The same approach was taken with House Bill 249, filed under the auspices of clarifying retailers’ sales and use tax permitting but which the Senate instead gutted to appropriate $75 million in film tax credits and $100 million in historical tax credits, including a $6 million earmark for an out-of-state multibillion-dollar hedge fund renovating a luxury hotel in downtown Louisville.
Such spending proposals are more likely to get fully unpacked and explained to citizens and voters — and become more politically unpopular — when forced to adhere to the constitutional process of committee hearings, full readings and floor debates.
Which is what the founders wanted.
If they couldn’t find a full-proof way to stop harmful tax, spending and regulatory increases, they at least wanted to do all they could to prevent legislative chicanery and ensure the light shone bright enough for citizens to see — and hold political representatives accountable for — policies detrimental to their prosperity and liberty.
Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. He can be reached at jwaters @freedomkentucky.com and @bipps on Twitter.