The Interim Appropriations & Revenue Committee met yesterday in Frankfort and took testimony on the SEEK formula, KRS actuarial assumptions, and Tobacco Settlement dollars. My notes and relevant presentations are below.
Robin Kinney and Chay Ritter from KDE gave a very factual presentation on how the SEEK formula works and how local districts can equalize funding. The presentation is encapsulated on these slides. There was no specific ask from KDE and this was very much an informational presentation.
There were several legislative questions, but most were directed at technical formula items and not necessarily policy items around SEEK.
KRS Actuarial Assumptions
KRS Executive Director David Eager provided an overview of current and revised actuarial assumptions for the public employee pension system.
Slides are available HERE. Two key takeaways are:
1. New actuarial assumptions in the KRS system related to mortality, retirement age, etc will add significant cost to the state budget as well as local government budgets over the next 20 years.
2. The KRS is in a positive cash flow situation (taking in more revenue than paying out benefits) for the first time in several years, which Mr. Eager said is a good indicator of the near term health of the fund.
Lots of legislative questions ranging from questions on quasi-pension bill and impact to the state and the KRS to questions on financial health of KRS and need for broader pension reform. On the new assumptions, legislators were sensitive as to how the state and local governments would be able to afford these changes.
Tobacco Settlement Funds
The committee received an informational overview on the Tobacco Settlement Funds provided by Perry Nutt, LRC Economist. The slides are available HERE and in particular went through past history of the MSA Fund and how those funds were appropriated in the current biennium.
- Legislators questions and comments were focused on positive impact of settlement dollars.
- There was no indication of any downturn in the funds over the near term.