Health-committee leaders say policy decisions being driven by focus on pensions, with no consideration of tax reform for revenue

L-R: State Reps. Joni Jenkins, Rep. Tom Burch, Sens. Ralph Alvarado, Sen. Julie Raque Adams

By Melissa Patrick
Kentucky Health News

Four legislators told a group of health advocates Feb. 22 that health-policy decisions in the legislative session are being driven by Gov. Matt Bevin’s emphasis on funding state pensions, and both Republican panel members said no one in their party is talking about revenue as a possible answer.

“We are in such precarious financial times relative to our overall budget and our obligations that we have to look at the cost associated with any bill that comes through the Health and Welfare Committee,” said Sen. Julie Raque Adams, R-Louisville, chair of the Senate Health and Welfare Committee.

Adams and three other lawmakers spoke in Frankfort at the annual meeting of Kentucky Voices for Health, a coalition of interest groups that support health-care reform.

Democratic Reps. Tom Burch and Joni Jenkins of Louisville said they recognized the importance of paying for pensions, but argued that shouldn’t be done at the expense of everything else.

Jenkins, chair of the House Budget Review Subcommittee on Human Resources, said that she was “very concerned” about Bevin’s plan to “cut everything” by 4.5 percent this year, and then 9 percent in both 2017 and 2018, all while putting $1.4 billion into a “rainy-day fund” for pension funding to be determined after an audit of pension systems.

“I look at that plan as [if] your kids are hungry and the roof is leaking … but you are still going to put so much money in your savings account no matter what. I don’t think any of us would do that,” Jenkins said. “We need a comfortable amount in the permanent fund, or the rainy-day fund, we need to fund the pension. … We need to systematically work at dwindling down that pension debt, but we can’t let the health and education of our children and citizens suffer because of that.”

Burch, chair of the House Health and Welfare Committee, said the General Assembly needed to use a business approach to solve the pension crisis, noting that it could take several years to fix.

“We have to take this on as a business approach,” Burch said. “We have to attack the problem and you attack the problem by finding the problem. … but you don’t do that by cutting everybody’s health care or by making co-pays so high that we are back to where we were prior to Kynect,” the insurance exchange that Bevin wants to close.

As for tax reform or finding other revenue sources to fund the pension, Adams said, “There isn’t an appetite to talk about it. Not at all.”

She said to applause, “We’ve been talking about cuts and cuts and cuts and rolling back and this and that, but I think we need to really get into revenue discussions as well. I mean we are not talking about that at all and … if we don’t start talking about revenue options then we are missing a huge piece of the puzzle.”

Toward this end, Adams said she has co-sponsored a bill with Sen. Morgan McGarvey, D-Louisville, for a constitutional amendment to expand gaming in the state, which has a provision in it that 90 percent of state revenue would be used to shore up the pension shortfall. She also suggested possible privatization options as ways to find money, but said, “That is going nowhere.”

Adams continued, “It is our responsibility to be creative and innovative and not just keep saying, ‘We can’t do it that way.’ or ‘It’s never been done that way.’ or ‘Woe is us, we’ve got to cut.’ It is our job to say, ‘OK, we are looking at precarious financial situations. What can we think of? What can we do differently?'”

Sen. Ralph Alvarado, R-Winchester, chair of the Senate Budget Review Subcommittee on Human Resources, agreed with Adams and said tax reform, “which we need to have in this state desperately,” wasn’t getting any discussion. Alvarado said he had brought up the subject behind closed doors, but because it is a “philosophy thing” with so many Republicans he didn’t make any headway.

Alvarado didn’t offer much hope for the advocates when one asked him what it would take to convince his fellow partisans to support tax reform, to not dismantle Kynect, and to support Medicaid expansion.

“Guys, it is not a logic discussion,” he said. “First of all, you’ve got to understand it is a philosophy discussion.” Later adding that if advocates are trying to use logic on a philosophy issue, “You are not going to make that argument well enough to get there.”

He offered the example of his smoking-ban bill that didn’t make it out of committee last session. He said that despite all of the logic and facts that support such a bill, it still didn’t have the support it needed to pass because legislators were making their decision based on their philosophy.

Burch, the longest serving member of the legislature, reminded the advocates that policy change is often a slow process and that educating legislators takes time.

Alvarado agreed with Jenkins that the preventive approach was the best way to improve the health of Kentuckians, but said it was difficult to convince legislators of that because the results aren’t immediate.