TOPEKA, Kan. (AP) — Kansas would issue $1.5 billion in bonds toimprove the short-term financial health of its pension system forteachers and government workers under a bill receiving first-roundapproval Tuesday in the state House.

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The measure would allow the state to inject a big dose of newdollars into the Kansas Public Employees Retirement System so thatits assets would cover more of its long-term obligations to provideretirement benefits to workers. Also, supporters believe that thestate's annual contribution of tax dollars to keep KPERSfinancially stable wouldn't have to grow as much as it would now,even with the bond payments.

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House members advanced the bill on a voice vote. They expectedto take a final action on the bill by Wednesday, and passage thenwould send the measure to the Senate.

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Rep. Dan Hawkins, a Wichita Republican, said the state pensionsystem is "kind of like a patient going to a doctor."

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"The patient's just kind of run down, maybe a little sick,needing a little bit of help," Hawkins said. "And so they give thatpatient a booster shot to get them going."

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The pension system's assets now cover only 53 percent of itslong-term obligations, and issuing bonds would allow the state toboost that percentage to 61 percent in 2015 and accelerate its riseto 100 percent.

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But the state also would be gambling that KPERS investmentearnings would outstrip the interest it would pay on the bonds, andsome House members questioned using debt to bolster the pensionsystem.

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"We need to solve the problem with assets, with income. We needto be paying down our liabilities," said Rep. Pete DeGraaf, aMulvane Republican. "My concern is that if we say yes to bonding,we're going to go to sleep."

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The bill would follow up on two years' worth of legislationoverhauling KPERS to eliminate a projected $9.3 billion shortfallbetween anticipated revenues and benefits promised to teachers andgovernment workers through 2033. The pension system projects thatthe gap will be eliminated over two decades even if lawmakers donothing more.

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The two years' worth of legislation committed the state tolarger annual contributions to KPERS and dedicated future profitsfrom state-owned casinos to the retirement system. Reining in theannual contribution of tax dollars to the pension system wouldlessen the squeeze on other parts of the budget.

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The state authorized $500 million in pension bonds in 2004 tohelp lessen the long-term KPERS funding gap. Supporters of thisyear's bill noted that the state is paying 5.4 percent interest onthose bonds while KPERS has earned 6.4 percent on its investmentssince they were issued, even with the Great Recession.

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The pension bill is HB 2403.

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