Retiring teachers would be able to count fewer unused sick days toward their final salary under a measure that advanced in the Senate State and Local Government Committee on Wednesday.
Under Senate Bill 4, from Republican Sen. Jimmy Higdon of Lebanon, only 10 unused sick days per year of service could be counted towards a teacher’s final salary upon retirement.
Retiring teachers are paid out 30% of the value of their unused leave when they retire. That payment is considered part of their final annual salary, which is used to calculate the employee’s pension annuity. The state gives teachers a minimum 10 sick days a year, but many districts provide more leave, including vacation days, emergency leave or personal days, some of which roll over into sick days and can be paid out upon retirement.
Higdon said his measure is aimed at curtailing the growing liability the state owes toward funding the Teacher Retirement System. Kentucky will owe $2 billion by 2030 in total annual payments to fund teacher pensions, according to Higdon.
“That wagon is getting pretty hard to pull,” Hidgon told the committee Wednesday.
Hidgon said in some districts that provide more leave, teachers are paid out for far more than 10 days. One individual who retired in 2018 was paid out for 591 days of unused leave that was accumulated over 25 years of service, Higdon said.
He acknowledged the fiscal analysis of the proposal “didn’t show a lot of savings.”
The analysis showed the measure would result in a “slight decrease” in the current annual costs of the program, which are around $52 million in 2024, or about 1.24% of payroll.
Analysts also noted that even without SB 4, the annual costs of the program are expected to decrease due caps lawmakers imposed on how much sick leave can be paid out to teachers hired after 2008.
But he also said the state doesn’t have a firm grasp of what the total sick leave liability is because districts don’t report how much leave their employees have accrued each year.
His measure creates those reporting requirements going forward.
SB 4 would not apply to any leave teachers have accrued prior to June 30, 2024.
“The bill is not retroactive,” Higdon said. “It only affects going forward.”
The measure would impact most of Kentucky’s 43,000 full time teachers.
Two teachers testified against the bill in committee, saying it is a reduction in benefits for teachers at a time when the state is struggling to attract and retain educators.
“Most Kentucky teachers work an entire career and earn a very modest pension at retirement without social security,” Fayette County Public Schools kindergarten teacher Jessica Hiler said. “The provisions of SB 4 will make that amount even less.”
Hiler is the president of the Fayette County Education Association.
The teachers said the bill would incentivize teachers to use their sick days, thereby increasing the need for substitutes when schools are already facing a shortage of teachers, subs and support staff.
Hiler also noted that the measure will have an outsized impact on women, who often use up their sick days earlier in their career for maternity leave or to care for sick children.
“As our kids get older, we can start rebuilding our leave time as we prepare for retirement,” Hiler explained.
The measure passed the committee 8-3. Republican Sen. Damon Thayer, of Georgetown, supported the bill. He referred to teachers’ use of sick-day payouts to increase their pension payments as “spiking.”
“These sick days when used for spiking, they cost the taxpayers money… It flies in the face of everything I stand for as someone who stands up for our taxpayers,” he said.
Meanwhile Republican Sen. Brandon Storm, of London, sided with the committee’s two Democrats in opposing the measure. Lawmakers who voted against the bill said they were concerned SB 4 would exacerbate the teacher shortage.
“I believe our teachers are underpaid, they are undervalued. I would hope this body would be passing legislation that would pay them more and give them more benefits,” Louisville Democratic Sen. Cassie Chambers Armstrong said.
The measure heads next to the Senate floor.
