A Republican governor in Kentucky who faced the ire of teachers upset over loss of retirement benefits lost his re-election bid Tuesday.
Kentucky Attorney General Andy Beshear claimed victory in a close race against incumbent Gov. Matt Bevin. Mr. Beshear was ahead by 4,000 votes in unofficial results.
Mr. Bevin, who was elected in 2015, earned the teachers' ire by trying to move them from a traditional pension plan to a 401(k)-style plan and for criticizing a walkout. He had the support of President Donald Trump, who tweeted his endorsement and held a rally Monday night.
Teachers have helped lead the charge against Mr. Bevin, donning the "Red for Ed" shirts that have become synonymous with teacher strikes across the country and knocking on doors after school. "We're absolutely backing Andy Beshear — the guy who has fought with us and not the guy who has fought us," said Jeni Bolander, a high school teacher who was among those who protested last year.
Mr. Beshear has said he wants to use gambling-tax revenue to boost the pension system for teachers and first responders, saying it will include legalizing casinos, sports betting and capitalizing on fantasy sports.
State officials in Kentucky underfunded the pension system for years, leaving a plan for non-hazardous duty employees just 13% funded in 2018, according to its financial report. The state has spent years grappling with the large-and-growing costs: In 2013, the state moved new state workers into a cash balance plan, which combines elements of traditional pensions and 401(k) plans and determines the value of benefits based on individual accounts.
But teachers, covered by the $18.1 billion Kentucky Teachers' Retirement System, haven't had to withstand any changes, said Adam Koenig, a Republican state lawmaker. "They're the only ones that have not taken a haircut," he said.
In 2018, Mr. Bevin's administration passed a law that would move new teachers into a hybrid plan, which was later ruled unconstitutional because it violated legislative procedures. Mr. Beshear, as attorney general, fought the law in court. The teacher's pension is about 57.7% funded, according to its financial report.
While moving the teachers into a hybrid plan would likely have cost the state more money in the first decade of implementation, over 20 years, it would have saved the state $65 million a year, according to an independent actuarial analysis legislation.
Kentucky's efforts to rein in a $45 billion pension burden are complicated by constitutional limits on cuts to benefits and lawmakers' resistance to raising taxes.
Passing pension legislation wasn't always easy for Mr. Bevin, despite his party holding a majority in the state's legislature. A measure providing some agencies the option to exit the state's retirement system was held up in a months-long legislative fight and was only passed in a special legislative session after Mr. Bevin vetoed an early version of the bill.
