Kansas State Treasurer Ron Estes today announced concern with Governor Sam Brownback’s plan to transfer $40.7 million from the state’s pension plan as part of his budget reform.
The changes in the state budget are in response to the state’s $280 million budget shortfall for the current fiscal year.
“While I understand the need to re-balance the budget in light of unexpected shortfalls, the decision to delay state contributions to our underfunded pension system is disappointing,” said Kansas State Treasurer Ron Estes.
The governor does have the responsibility to make the allotment cuts to keep the state’s ending balance positive. And when the Consensus Revenue Estimating Group lowered the forecasted revenue amount four weeks ago, he was forced to act.
"Assets in KPERS are currently $7.35 billion short for state and K-12 school employees (overall $9.77 billion short) of the amount needed to pay promised benefits to all current employees and retirees. This is why so much hard work was put into the pension reform plan passed by the 2012 legislature. By delaying action now, we run the risk of KPERS consuming an even larger amount of our state’s budget at the expense of other vital state services to Kansans in the future," explained Estes.
Rather than completely cancelling the increase in state contributions as outlined in the 2012 pension reform plan, Treasurer Estes encourages the governor and legislature to consider alternative courses of action that wouldn't completely halt progress toward a fully funded state pension system. Alternatives could include pension bonding and revising the amortization period. These may not be able to be implemented this year and may take two to three years to implement.
"KPERS is a resource that more than 289,000 members and retirees depend on,” said Estes. “And our state government has a fiduciary responsibility to preserve and protect what so many Kansans rely on for their retirement. Although these problems have been neglected for over 20 years, these benefits have been earned and should be paid to the state and local employees for their years of service.”
Ron Estes is the 39th state treasurer for the state of Kansas and is the first state-wide elected official from the city of Wichita in 20 years. He was elected to serve as the Midwest Regional Vice President for the National Association of State Treasurers 2012-2013, and now serves on the College Savings Plans Network Executive Board. Ron has also served as Sedgwick County Treasurer and as the treasurer for the Kansas County Treasurers’ Association. He was born in Topeka and is a fifth-generation Kansan. His family continues to run a farm in Osage County. Ron and his wife, Susan, have three children.