AARP Kentucky Legislative Agenda 2019

Strengthen the Solvency of Retirement Systems

AARP is working to protect promised retiree pension benefits, specifically preserving cost of living adjustments, and encouraging improved funding to ensure pension system sustainability. Retirees have paid into the system over a lifetime of work and are counting on Kentucky to keep its promise.

Enhancing Financial Security

Financial security is in jeopardy for the nearly 800,000 Kentuckians working in the private sector who do not have access to a workplace retirement program. AARP is asking lawmakers to examine the feasibility of creating a voluntary retirement savings program which employers and working Kentuckians could opt-in to participate. The so-called Work and Save program would offer workers a simple and low fee payroll savings option. Work and Save programs are typically designed to give employers access to professionally managed plug-and-play retirement savings plans that employees determine whether to participate.

Kentucky

Longevity and Kentucky Economy

Kentucky is home to 1.5 million citizens age 50-plus.

They represent a powerful force driving economic growth and value. The contributions of this age group are collectively known as the Longevity Economy. It is the sum of all economic activity driven by the needs of Kentuckians age 50-plus, including both the products and services they purchase directly and the further economic activity this spending generates.

Based on an analysis of all economic activity of people 50 and older conducted by AARP in 2017, the total economic contribution of Kentuckians 50-plus accounted for 41 percent of the state’s gross domestic product and 40 percent of state and local taxes.

The Longevity Economy is poised to become the driving force not only in Kentucky, but across the United States and globally. While government officials are formulating policy in Frankfort, AARP Kentucky is urging lawmakers to recognize the Longevity Economy and envision it as a foundation for future economic prosperity and innovation. “The 50-plus across Kentucky are making a substantial and positive contribution to our economy—far more than people realize,” according to AARP Kentucky State Director Ron Bridges. “Policymakers need to recognize the value of contributions made by older Kentuckians.”

Kentucky

The Longevity Economy is the sum of all economic activity education & health services (266,000), trade, transportation & in Kentucky that is supported by the consumer spending of utilities (247,000), and leisure & hospitality (150,000). households headed by someone age 50 or older—both in This $81.6 billion impact of the Longevity Economy was driven Kentucky, as well as spending on exports from Kentucky to & Health Economic impact Jobsbyimpact by sector $76.9 billion in consumer spendingEducation by over-50 households other and DC. This includes the direct, indirect (supply Services ofstates the Longevity Economy in Kentucky, or 56% of total comparable consumer spending. chain), and induced economic effects of this spending.

(The Trade,spending Transportation & % of 77,000 where Longevity Economy The categories accounted Utilities induced impact involves the ripple effects from theTotal spending of Impact for the largest share of total consumer spending were health 86,000 266,000 those employed either directly or indirectly.)

Leisuremargins & Hospitality care (66%), entertainment (57%), and trade & personal State GDP $81.6 billion 41% 89,000 Professional & Business People over 50 contribute to the economy in a positive, outsize transport services (55%).

Services proportion to their share of the population.

Despite46% being 36% of Employment 1,125,000 92,000 People over 50 also make a significant contribution to Kentucky’s Financial Activities Kentucky’s population in 2015 (expected to be 37% in 2040), the workforce, with 58% of people 50-64 Other employed, compared to totalLabor economic contribution of the Longevity Economy 247,000 income $50.3 billion 42%accounted 118,000 73% of people 25-49. Overall, people over 50 represent 32% Manufacturing for 41% of Kentucky’s GDP ($81.6 billion). This supported 46% of Kentucky’s people, 12% of 150,000 workforce. Among employed of Kentucky’s jobs tax (1,125,000),$8.0 42%billion of labor income State & local 40% ($50.3 Other Services those 50-64 are self-employed entrepreneurs, compared with billion), and 40% of state and local taxes ($8 billion). The greatest 7% of those 25-49. Additionally, 39% of those 50-64 work in number of jobs supported by the Longevity Economy were in professional occupations, compared to 41% of those 25-49.

Other (60%)* Fuel (49%) Utilities (55%)

Consumer spending Billions % of $80

population over 50 56%

Population by age Education (41%)

4.0

$40

3.0

$20 $0

2.0 Spend over 50

1002320191801007873615651006058484371002120171541006541

Labor force status by age

Miscellaneous durables (54%) Entertainment (57%) Telecommunications (53%) Cars & other transp equip (54%) 18.7% services (47%) 15.2%Personal 16.1%and professional19.2% Miscellaneous nondurables (54%) Restaurants & hotels (49%) 18.1% 20.4% 20.0% 17.9% Food, alcohol & tobacco (52%) Financial services (53%) Trade margins & pers. transport services (55%) 31.9% 31.6% 32.0%Health Care (66%) 31.9%

Millions 5.0

44%

$60

Spend under 50

1.0

* Numbers in parentheses are the % of spending by people over 50.

32.4%

31.3%

31.9%

Occupation by age 0.0

2015 2020 45%–50% 100% Not in the labor force 0–24 25–49 90% Unemployed 80% 80% EmployedGovernment 70% 70% Sources: Population by age by county is from the Census Bureau population estimates for 2015. State population projections to 2040 are from the Employed60%Cooper Center for Public Service. Labor force status and occupation 60% Weldon by age are from the 2015 American Community Survey (ACS). Consumer Not for profit spending by age of household head for 2015 is calculated by Oxford Economics using data on relative household consumption levels by product type 50% 50%are combined with the number of households from the 2015 Consumer Expenditure Survey and the 2012 National Health Expenditures Data. These Employedby age of household head from the ACS, and then total spending Private by product is scaled to 2015 household spending data from IMPLAN. The 2015 40% 40% economic impact of this spending by the Longevity Economy is calculated sectorby Oxford Economics using IMPLAN software, and benchmarked against IMPLAN 30% totals for the state.

30% EmployedSelf 20% 20%

100% 90%

25%–30% 30%–35%

35%–40% 40%–45%

10%

10%

0%

0%

0–24 25–49 50–64 65–74 75+

31.3%

2030 2040 Production, transportation 50–64 65+ Construction, agriculture Administrative support Sales Food, cleaning, personal services Health Education, arts Legal, protective, military Science, engineering Management, business

0–24 25–49 50–64

65+

Learn More: aarp.org/2017longevityecon

Staying Connected:

AARP Kentucky State Office 10401 Linn Station Road, Suite 121 Louisville, KY 40223 Phone: 1-866-295-7275 (toll-free) Fax: 1-502-423-7031 email: kyaarp@aarp.org

Online: aarp.org/ky facebook.com/aarpkentucky twitter.com/aarpky youtube.com/aarpky

LEGISLATIVE AGENDA 2019

AARP KENTUCKY 2019 LEGISLATIVE AGENDA

Introduction

AARP Kentucky remains one of the Commonwealth’s largest membership organizations with some 470,000 Kentucky members. Since 2001, AARP Kentucky has worked to advance policies that help its members live with dignity and purpose. Those policies are determined by our national volunteer Board of Directors with member input - surveys, focus groups and field hearings.

The AARP Kentucky legislative priorities that matter most to our members in 2019:

• Family Caregivers Support • Quality Long-Term Services & Supports (LTSS) • Retirement Security • Tax Fairness • Consumer Protection • Affordable and Accessible Health Coverage

Our Priorities

Protecting Retirement Financial Security

AARP Kentucky is urging lawmakers to hear the voices of Kentuckians and take action to protect retirees. The state office is calling on the General Assembly and Governor Bevin to reject 2018 tax increases on retirement income and restore deductions for medical expenses.

AARP Kentucky urges the General Assembly and Governor Bevin to reverse last year’s changes in the state’s tax code that reduced the existing level of the pension income exclusion, as well as changes that eliminated the medical expense deduction.

Working Kentuckians and today’s retirees did not create the current state fiscal crisis. AARP believes it’s unfair to balance a state budget on the backs of Kentuckians’ with high health care expenses or those who have worked hard saving for retirement. Calls for taxing retirement income fail to acknowledge the vast number of older Kentuckians who contribute financially to the well-being of their children and grandchildren, and act as primary caregivers. Taxing retirement income will minimize retirees’ ability to care for their loved one’s needs and provide assistance with food, housing, transportation, and medical costs.

On behalf of its 470,000 members and all individuals aged 50 plus and their families, AARP Kentucky urges the General Assembly and Governor to find a solution to protect older Kentuckians and today’s retirees from paying millions of dollars more in taxes.

Helping Kentuckians Live Independently More than three-quarters (77%) of Kentucky registered voters age 45 and older believe that being cared for at home with caregiver assistance is the ideal situation when the basic tasks of life become more difficult due to aging or illness.

AARP supports improving the balance of funding for home and community-based services (HCBS) by redirecting spending away from costly institutional care and towards supports and services in the community. These vital and cost-effective services promote consumer choice, help Kentuckians live independently, and can save taxpayer dollars.

Long-term Services & Supports (LTSS) AARP seeks appropriate priority funding for community senior services to meet growing demands and reducing waiting lists for services. These include: meals-on-wheels, in home care, local senior centers and stable funding for the Long-Term Care Ombudsmen program.

Health Security: Supports for 50 to 64 year olds The share of adults age 50 to 64 who are at risk for increased healthcare spending is rising, while the share with employersponsored health coverage is declining. In 2019, it will be important to assess how well the system serves people most at risk in our current system, especially Kentuckians age 5064 not yet eligible for Medicare.

Tax Fairness

Affordable Utility Services AARP is working for our members and Kentucky families to ensure fair and affordable and reliable electric, gas, and internet services. AARP has been one of the few organizations in Kentucky working at both the federal and state levels to fight against unfair utility rates and to help people save money on their utility bills.

Livable Age-Friendly Communities

AARP Livable Communities supports efforts of neighborAARP remains committed to ensuring that any reforms made hoods, towns, cities and rural areas to be great places for to state tax structures are equitable, progressive and safeguard people of all ages. We believe livable communities provide the financial security of our 50-plus population. In addition to safe, walkable streets; age-friendly housing and transportaraising sufficient revenue, state and local tax systems should tion options; access to needed services; and opportunities follow the general guiding principles of equity, neutrality, for residents of all ages to participate in community life. administrative efficiency, and consistency with broader social goals.