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Kan. proposal for $1.5B in pension bonds advances

Kansas state Rep. Steve Johnson, left, an Assaria Republican, and chairman of the House Pensions and Benefits Committee, confers with colleagues during a debate on a bill authorizing $1.5 billion in bonds to boost the short-term health of the state retirement system, Tuesday, March 26, 2013, at the Statehouse in Topeka, Kan. Talking to Johnson are, Rep. James Todd, center, an Overland Park Republican, and Arlen Siegfreid, right, an Olathe Republican. (AP Photo/John Hanna)

TOPEKA, Kan. (AP) -- A Kansas Senate committee has approved a bill authorizing $1.5 billion in bonds to bolster the short-term financial health of the state pension system for teachers and government workers.

The Ways and Means Committee's voice vote Friday sends the measure to the Senate for debate, probably after lawmakers return from their annual spring break in May. The House approved the bill last week.

The state pension system's assets now cover only 53 percent of its long-term obligations, and issuing bonds would allow the state to boost that percentage to 61 percent in 2015 and accelerate its rise to 100 percent by 2033.

But the state would be gambling that its pension system would earn more from investing the bond funds than it would pay in interest to bond buyers.