Topeka A proposal to borrow $500 million to shore up the state pension system turned into a political fight Tuesday.
The House-Senate Committee on Pensions, Investment and Benefits was scheduled to vote on a plan to sell bonds to help cover a projected budget hole in the Kansas Public Employees Retirement System.
But Chairman John Edmonds, a Republican state representative from Great Bend, abruptly ended the meeting before the committee could discuss the proposal and vote on it.
That brought protest from Senate Democratic Leader Anthony Hensley of Topeka.
"This was truly a waste of legislators' time and taxpayers' money," Hensley said. "Now we delay a decision to put the KPERS system back on solid ground. This is a poor way to conduct the state's business."
But Edmonds said, "I'm not going to try to rush that committee to judgment on a half-billion dollar plan."
Referring to Hensley, he said, "When he's a committee chairman, he can run it his way."
Edmonds said he feared that if the measure had been brought to a vote, it would have failed.
Hensley said Edmonds would have known for sure if he had allowed the committee to discuss it after hearing a presentation from KPERS staff.
"You get a feel for where the committee is when you open it up for discussion," Hensley said.
Hensley said he supported the $500 million in pension obligation bonds if it were part of a comprehensive package for KPERS that included increased contributions from the state to the pension system.
At issue is the financial health of the KPERS fund, which provides benefits for retired state employees, teachers and other governmental workers. Nearly 58,000 people receive KPERS benefits with the average annual pension at $10,425.
Proponents of issuing $500 million in bonds say the money could be borrowed at a 6.25 percent interest rate. Pension managers say they could invest that money and earn more than what would be needed to pay off the bonds with the extra helping close the gap between the system's assets and future benefits.
But critics say the proposal amounts to a high-stakes gamble that could hurt pensioners because the investments could go sour, as they have in recent years.
The pensions committee must approve the proposal before it can be advanced to another committee that is composed of Gov. Kathleen Sebelius and legislative leaders.
-- Staff writer Scott Rothschild can be reached at (785) 354-4222.