CJ: "Kentucky's pension debt to hit local governments' balance sheets"

Kentucky's pension debt to hit local governments' balance sheets

Despite roughly $27 million in net assets, a $7 million cash reserve and an AA- credit rating, the city of Hopkinsville, Ky., could be broke in less than two years — at least on paper.

That’s because new accounting rules that take effect July 1, 2014, require Kentucky and its 1,500 local governments, public agencies and other public employers that pay into the state retirement system, to reflect their portion of Kentucky’s massive pension debt on their financial documents.

That means that Hopkinsville, for example, will have to show an estimated $36 million pension debt, while cities such as Louisville and Lexington will be saddled with an accounting debt of $823 million and $191 million, respectively.

The newly reflected debt won’t alter those cities’ actual pension obligations. Public employers will pay for liabilities through annual pension contributions, as they do now.

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Of course, now take a look at those judicial appointments of legislators and the senior status program.  Who do you think is going to fund those folks getting large retirements?  Yup.  You and me.