$1 billion+ headed to KPERS fund with Gov.’s signature on newly passed bill
TOPEKA, Kan. (WIBW) - More than $1 billion is headed to the KPERS fund as Gov. Kelly pays off debt with her signature freshly inked on Senate Bill 421.
On Thursday, May 12, Kansas Governor Laura Kelly says she signed bipartisan legislation, Senate Bill 421, which transfers $1.125 billion from the State General Fund to the Kansas Public Employees Retirement System - KPERS.
Gov. Kelly said SB 421 will provide immediate and long-term benefits to the Sunflower State with the elimination of debt from the state’s balance sheets and reducing future employer contributions.
“Balancing the budget, paying off debt, and providing financial relief for Kansans has always been my top priority – and today we delivered on that promise,” Kelly said. “We’re fixing the damage done to KPERS because our public service employees and retirees deserve their retirement fund to be replenished after the previous administration skipped payments to cover reckless tax policy.”
The Governor noted that SB 421 will provide immediate and long-term benefits to the state with reductions to the debt owed to the fund and further enhancement of the state’s historical financial strength.
Kelly indicated that payment of the debt builds on her record of debt reduction obligations that the previous administration was content to pass onto future generations to pay for reckless tax policy.
“This legislation repays all the delayed KPERS contributions, which is a great relief to KPERS members and their beneficiaries,” State Treasurer Lynn Rogers said. “Governor Kelly’s record of paying off significant debt allows us to have the capacity to better serve the people of Kansas and focus on investing in our future.”
In addition to the KPERS funds, Kelly said the state is set to pay off hundreds of millions of dollars in bonded debt as recommended in January. She said she also paid off a loan from the Pooled Money Investment Board 2 years ahead of schedule.
“Since before she was elected Governor, Laura Kelly has demonstrated her steadfast support for improving the strength and financial resilience of our state’s public employee retirement system,” Alan D. Conroy, Executive Director of KPERS, said. “SB 421 not only makes significant progress in reducing our long-term unfunded actuarial liability, it also takes long-term KPERS debt completely off the books. Taken together, this infusion of one-time funding will provide immediate savings to the state, it will lead to a significant reduction in long-term KPERS payments, and it will further affirm for our retirees that they will receive the full pension benefit they have earned from their public service within Kansas to the State, cities and counties, and local school districts.”
Before the legislative session began, Kansas Attorney General Derek Schmidt said he called on the Legislature to prepay the state’s public pension debt for 2022, however, the Governor’s budget excluded the move.
“Before the legislative session began, I called on the Legislature to prepay at least $1 billion of the state’s public pension debt this year. Retiring that debt early is estimated to save taxpayers nearly $100 million per year far into the future,” Schmidt said. “Although the governor’s budget did not include this fiscally responsible proposal, senior Republican leaders including Speaker Ron Ryckman and President Ty Masterson stepped up and got the job done. This bold initiative, which retires $1.1 billion in public pension debt, is transformative – for Kansans who rely on state services, for taxpayers who can benefit from future tax relief, and for all the law enforcement officers, firefighters, teachers, and other public retirees who rely on KPERS pensions. Kansas needs more of this kind of commonsense conservative leadership that prioritizes the fundamentals of good government, including paying our debts, running government efficiently, and minimizing the burden on taxpayers. A penny saved really is a penny earned. The old ways of borrowing from the future to spend more now no longer will do, and I commend all who answered the call to make this happen.”
AG Schmidt said on Jan. 9, he called on the legislature to prepay at least $1 billion of the pension debt. He said the initiative contrasted with Kelly’s repeated budget recommendations to borrow more from KPERS with refinancing payments at a cost of billions to taxpayers. He also said in 2019 she vetoed a more modest proposal to prepay $51 million in KPERS debt.
The bill was introduced in January and unanimously passed by the Senate under a final action vote. Once in the House, Representatives Troy Waymaster (R-Bunker Hill) and Rui Xu (D-Westwood) offered amendments to the bill, of which only the amendment offered by Waymaster was adopted.
The House voted on March 9, 113 to 5 to pass the bill as amended under emergency final action. Once back in the Senate, legislators disagreed on the amendments and requested a conference committee, of which Sens. Rick Billinger (R-Goodland), J.R. Claeys (R-Salina) and Tom Hawk (D-Manhattan) and Reps. Steven Johnson (R-Assaria), Chris Croft (R-Overland Park) and Cindy Neighbor (D-Shawnee) were appointed as conferees.
A conference report was made available on March 31 and the same day the House unanimously voted to pass the report as adopted. On April 28, the Senate voted 26-10 to do the same. The bill was enrolled and presented to Gov. Kelly on May 6.
With Kelly’s freshly-inked signature, the SB 421 will head to the Secretary of States Office for printing in the Session Laws, which typically happens on July 1 and will codify the legislation as law.
Reprsentative Ron Ryckman (R-Olathe), Speaker of the House, said the Governor attempted to take political credit for the Republican-led measure.
“For the second day in a row, the governor is signing into law and attempting to take political credit for a Republican-led measure that she has consistently opposed over the last three years. The Legislature has three times stopped the governor’s efforts to “reamortize” KPERS and add over $6 billion in new debt for taxpayers. Like the food tax, the governor vetoed good KPERS policy in 2019 that we overrode. Thankfully for Kansas taxpayers, today she has reversed course,” Ryckman noted.
To read the full text of the bill, click HERE.
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