As Kentucky faces a budget deficit of more than $450 million, cities and counties are grappling with their own revenue shortfalls.
In Frankfort Tuesday, Governor Steve Beshear announced a proposal that would allow cities and counties to spread out their pension contributions over ten years rather than the currently required five years.
“It will save or provide immediate relief to cities and counties of about $37.5 million for the next fiscal year that they can use to balance their budgets and perhaps not have to cut as many of the services as they otherwise would have to during this economic downturn,” Beshear said.
But Mike Burnside, executive director of Kentucky Retirement Systems, believes Beshear’s plan would cost local governments more than it saves, and would undermine some of the pension reforms approved by lawmakers this year.
The proposal will be debated during next month’s Kentucky General Assembly.