Gov. Kelly defends her plans to refinance KPERS loan

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TOPEKA, Kan. (WIBW) -- Governor Laura Kelly told retired state workers on Monday that Republican lawmakers are wrong when comes to her plans to re-finance the state’s pension fund.

The Governor is adamant, her plan will work and make payments to KPERS easier for the state.

“I think they are making a lot of political hay over this when many of them were actually recommending this several years ago,” said Kelly (D-Kansas).

“We looked at it in the past and it didn’t make sense when Brownback had a much smaller plan. It didn’t make sense. This one’s even larger and makes even less sense today,” said Speaker of the House Ron Ryckman (R-Olathe).

Kelly disputes that. She told the Kansas Coalition of Public Retirees this plan will be affordable in the long run.

“There’s no way that we can’t as a state, that our agencies can afford to do this. So by leveling it out, we make it much more doable. Much more sustainable over time,” she explained why holding up a graph outlining the payments over the next 15 years.

“When you’re asking us to make a decision that saves us $145-million, but then costs us $7.4-billion? That’s a big decision,” Ryckman said.

Kelly agrees it will cost more over time, but argues the state cannot afford the upcoming payments. Some lawmakers say they understand, but the responsibility doesn’t fall on the legislature.

“The KPERS Board actually makes the re-amortization decision. The only way the legislature weighs in is by refusing to put the full amount in,” explained Rep. Steve Johnson (R-Assaria).

The KPERS board isn’t set to look at the issue until next year, and at least one told us he's skeptical.

“It’s a legal responsibility and the state will someday have to pay for it. It looks to me like this idea makes it worse,” said Ernie Claudel.

Governor Kelly says her plan isn't necessary to balance the budget, however, she says not doing it should raise more concern about tax cut ideas, like a bill suggested by Senate President Susan Wagle.