Finch: New governor looks to KPERS refinancing for boost to state budget

By Kansas Rep. Blaine Finch, Speaker Pro Tem

As I write to you we are approaching the end of week three of the new session. This is a session of significant change as we have 27 new members in the Kansas House and a new governor beginning her term. In these first few weeks, it may seem there isn’t a lot happening very quickly but in committee rooms and offices around the Capitol ideas are bubbling up, bills are being drafted and things are beginning to move.

I predict we may end up with fewer bills this year but there are still some big issues that will need to be addressed. None of those issues is bigger than the budget. With a new governor we are seeing new budget priorities and some retreads when it comes to how to make ends meet. The biggest of those is the idea of reamortizing our public retirement system, KPERS.

In 2013 the state set out on a path that would have 100 percent of our public pension system fully funded by 2033. It was ambitious but vitally important if the state was to honor the commitment to those who made it their vocation to serve others. In 2017, our last governor proposed reamortizing or refinancing the pension system to reduce current payments and extend the term of the payoff. Some have compared this to refinancing a house where the loan is extended but the payments go down. That is an oversimplification, but it is true that pension refinancing reduces the payments for a short time, takes longer to pay off, and like that home refinance means you pay a lot more in interest over the long term.

The new governor has proposed a refinance of KPERS that would add $7.4 billion in cost and extend the time when the state catches up on payments clear out to 2048. This is a bad idea. So why has it been proposed? Because of those lower payments in the short term. The governor’s plan would see annual KPERS payments go down by about $145 million in the first few years before skyrocketing up to total over $1 billion per year. That short-term infusion of cash would allow for the extra spending proposed in the governor’s budget but will leave our children and their children paying for that spending. We will see how that issue fares in upcoming hearings and possible debate.

In other news, I have taken on a new role in the legislature this year as Speaker Pro Tem of the House. This is one of the two constitutionally required positions in the House, the other being the Speaker. As Pro Tem I serve our members and help them work to find solutions to problems their constituents are having with state government. Our office oversees the internship program which helps young people gain experience in the legislature. Finally, we work as part of the leadership team to help track legislation and keep our processes orderly and fair. This is quite a change as I no longer get to serve on the committees I have been a part of in past sessions, most notably the House Judiciary Committee, but I do continue to chair the House Rules Committee as we take on these additional responsibilities in the Legislature.

I look forward to writing as often as possible and keeping you informed on things happening in the Statehouse. It is a wonderful honor and privilege to serve you here and to be your representative. If I or my office can be of help, please call me at 785-291-3500 or email me at [email protected].

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