Legislature(1993 - 1994)

02/26/1993 09:03 AM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  Chairman  Leman called  the  Senate State  Affairs Committee                 
  meeting to order  at 9:03 a.m.   He announced the  following                 
  teleconference  sites would  be participating in  the public                 
  hearing on  SB 1  (RETIREMENT INCENTIVE  PROGRAM):   Valdez,                 
  Barrow,  Fairbanks,  Ketchikan,  Mat-Su,   Kotzebue,  Homer,                 
  Soldotna and Anchorage.                                                      
                                                                               
  Number 045                                                                   
                                                                               
  FRANK  PRICE, Regional  Director, Inland Boatmen's  Union of                 
  the Pacific, Alaska Region, testifying  in Juneau, said that                 
  in Alaska, they primarily  represent the unlicensed  members                 
  of  the  Alaska Marine  Highway  System.   He  voiced  their                 
  union's support for SB 1, which  he said will be a means for                 
  the  state  to save  money.    He criticized  the  Office of                 
  Management  and Budget's  position that  they don't  believe                 
                                                                               
                                                                               
  they should support the bill because they don't believe that                 
  it  will save  the  state money.   He  pointed out  that the                 
  legislation provides that the organizational units that want                 
  to implement the  plan, if it  is passed, basically have  to                 
  prove that agency's implementation of the plan will save the                 
  state money.                                                                 
                                                                               
  Number 108                                                                   
                                                                               
  FRED GAFFNEY, a  senior level staff  member with the  Alaska                 
  Department of Fish   & Game testifying in Juneau,  stated he                 
  was testifying on his own behalf in support of SB 1  and the                 
  reinstituting of the RIP program.                                            
                                                                               
  Mr. Gaffney related that two divisions within the Department                 
  of Fish & Game, the Division of Commercial Fisheries and the                 
  FRED  Division,  are in  the process  of  being merged.   He                 
  stated  his concern with proceeding with this type of merger                 
  as a cost savings device, while, at the same time, not being                 
  able to  take advantage of  a program and  planned reduction                 
  amongst  the  staff.    His  principal  concern is  for  the                 
  biologists who are  among the  longest employees within  the                 
  state  government.   Should these  people be laid  off, they                 
  have no other opportunity for employment.  He said  a lot of                 
  problems can be avoided by providing a planned reduction and                 
  taking  advantage of  savings,  which  have been  documented                 
  through the RIP programs in the past.                                        
                                                                               
  Number 150                                                                   
                                                                               
  SENATOR TAYLOR asked how many positions would be lost by the                 
  consolidation.  FRED  GAFFNEY responded that he  didn't have                 
  the specific numbers, but he knows that the principal reason                 
  for  merging  the   divisions  is  to  reduce   upper  level                 
  management.                                                                  
                                                                               
  Number 160                                                                   
                                                                               
  SENATOR LEMAN said there is some difference of opinion about                 
  the impact  of retirement incentive programs.   He asked Mr.                 
  Gaffney what he thought  the true savings to the  state were                 
  the last two times such a program was offered.  FRED GAFFNEY                 
  answered that he couldn't  speak for the department,  but he                 
  is aware  that  there  have  been savings  which  have  been                 
  documented.  He knows many people that did take advantage of                 
  the RIP, which provided them an opportunity to retire early.                 
  He noted that  many of the these people  are still in Juneau                 
  and in other areas of the state.                                             
                                                                               
  Number 195                                                                   
                                                                               
  DAVE SOULAK, City  Manager, City  of Palmer, stated  support                 
  for SB 1,  which will  allow his city  to humanely  downsize                 
  without disrupting the lives of their younger employees.  He                 
                                                                               
                                                                               
  pointed out that the City of  Palmer participated in the two                 
  previous  retirement incentive  programs  at a  considerable                 
  savings to their fiscal year budget.                                         
                                                                               
  Number 207                                                                   
                                                                               
  SENATOR  LEMAN  asked  how much  money  the  City of  Palmer                 
  actually  saved during  the  last two  RIP  programs.   DAVE                 
  SOULAK responded that during the three-year window, the City                 
  of Palmer's savings amounted to approximately $120,000.                      
                                                                               
  Number 215                                                                   
                                                                               
  BILL  MONROE, testifying  from the  Mat-Su LIO, said  he was                 
  representing approximately  450 employees of  the classified                 
  employee's association, and  he related  that in the  Mat-Su                 
  school district  as much as  five percent  of their  overall                 
  staff may lose  their jobs.  The  passage of SB 1  will help                 
  prevent this.                                                                
  Number 224                                                                   
                                                                               
  SENATOR TAYLOR  asked why they would be  losing five percent                 
  of their teaching staff.  BILL MONROE answered that they are                 
  facing  fairly stiff  budget constraints  locally, and  with                 
  funding set at the state level  at $61,000 per instructional                 
  unit, these are very real cuts they are facing.                              
                                                                               
  Number 235                                                                   
                                                                               
  CAROLE ANDERSON, testifying from Ketchikan, said her husband                 
  has taught in  the Ketchikan School  District for 18  years.                 
  She stated their support for SB 1, because they believe that                 
  it is financially  a sound plan to save the  State of Alaska                 
  money, and that it  is a creative, effective  alternative to                 
  layoffs.                                                                     
                                                                               
  Number 250                                                                   
                                                                               
  MIKE SALAMANCHUK,  a 45-year resident  of Alaska, testifying                 
  from Ketchikan,  questioned why retirement programs  work in                 
  other states and  why the  program worked in  Alaska in  its                 
  early inception.                                                             
                                                                               
  Number 270                                                                   
                                                                               
  RON WEST,  testifying from Anchorage,  stated the  Anchorage                 
  School District currently  faces a $10 million  deficit this                 
  year, so Anchorage is going to face  real bugetary problems,                 
  which  will  mean   layoffs  and   absolute  reductions   in                 
  personnel.   He said  the objections  of the  Administration                 
  with regards to the  early retirement bill don't seem  to be                 
  honest objections, because  even if the  bill passes, it  is                 
  still  voluntary as  to  which agencies  of  the state  will                 
  decide whether or not to participate.   He suggested that if                 
                                                                               
                                                                               
  there is not  support for a retirement incentive program for                 
  state employees,  that as an  alternative, it be  offered to                 
  teachers and local governments only.                                         
                                                                               
  Number 330                                                                   
                                                                               
  WAYNE  HEIMER,  a   Department  of  Fish  &   Game  employee                 
  testifying  from  Fairbanks,  said  he  and  his  co-workers                 
  support public employee inclusion in SB 1.  They believe the                 
  money   savings  would  be  good   for  the  state  and  for                 
  themselves.   He urged  passage of  SB 1  so that  long-time                 
  employees, like himself, who aren't so well  adapted to work                 
  there  anymore,  may leave  and  lead to  a  more productive                 
  youth-oriented  assemblage  of  employees  that  are  better                 
  adapted to work in today's system.                                           
                                                                               
  Number 352                                                                   
                                                                               
  VERN  HIRSCH,  Secretary-Treasurer  of   the  Alaska  Public                 
  Employee's  Association,  Alaska  Federation   of  Teachers,                 
  testifying from Juneau, stated  their support for SB 1  as a                 
  sensible, cost effective  and humane tool  to deal with  the                 
  conflict between  the need  to perform  public services  and                 
  dwindling revenues to  support these services.   The program                 
  is discretionary  and employers  have the  latitude to  deny                 
  participation to employees who possess unique or specialized                 
  knowledge in their field which cause a "brain drain."                        
                                                                               
  Mr.  Hirsch  said  the  savings   to  employers  in  earlier                 
  retirement incentive  programs  is well  documents  in  past                 
  audits.    However,  what  hasn't  been  documented  is  the                 
  positive effect  that the  prior two  programs  have had  on                 
  Alaska's economy.                                                            
                                                                               
  Number 400                                                                   
                                                                               
  SENATOR LEMAN  noted that  in the  previous RIP, it  appears                 
  that in the first  year of that offering there is actually a                 
  higher cost to the state, and he wondered if the program can                 
  be designed so that there will actually be  a savings to the                 
  state even in that first year.                                               
                                                                               
  Number 415                                                                   
                                                                               
  GERRY  TULLOS,   testifying  from  Soldotna,  said   he  has                 
  discussed                                                                    
  SB 1 with the superintendent at the school where he teaches,                 
  who  has  indicated the  minimum  savings in  their district                 
  alone                                                                        
  would be from $600,000 to $700,000.   He said passage of the                 
  bill would definitely impact their area to an advantage.                     
                                                                               
  Number 400                                                                   
                                                                               
                                                                               
  LOWELL PURCELL, Deputy  Mayor of Fairbanks, said  their city                 
  has  suffered a great deal over  the last five to six years,                 
  basically at the hands of  municipal assistance, revenue and                 
  being unable  to pass any taxes at the referendum level.  He                 
  said  the City of Fairbanks doesn't know  how it is going to                 
  fund its city  fire department  for the last  six months  of                 
  1993,  so  anything  they  can  do  to save  money  or  help                 
  eliminate  some of  these  problems is  going to  assist the                 
  city.  He  noted that  the Fairbanks City  Council passed  a                 
  resolution on February 8 urging enactment of the RIP bill.                   
                                                                               
  Number 445                                                                   
                                                                               
  CLAUDIA DOUGLAS,  President of  NEA-Alaska, testifying  from                 
  Juneau,  stated  their  support  for  the utilization  of  a                 
  retirement incentive program  as a  cost effective means  to                 
  reduce school  district personnel  costs, thus  reducing the                 
  cost of  school district  operation during a  time when  the                 
  student population is increasing,  but additional funding is                 
  difficult.  She  also said that if  it is the intent  of the                 
  legislature and  the Administration  to reduce  the cost  of                 
  state  government,  this  is  an  excellent  opportunity  to                 
  achieve that goal without harming any employees at the upper                 
  or lower end of the salary schedule.                                         
                                                                               
  Number 495                                                                   
                                                                               
  BERNARD JOHNSON, testifying from Anchorage, asked if someone                 
  could  summarize   the  differences   between  the   current                 
  legislation and the legislation vetoed  by the Governor last                 
  year.                                                                        
                                                                               
  ROXANNE STEWART, staff to Senator Jim Duncan, explained that                 
  last year's legislation,  SB 337, had one  major difference,                 
  which was  an amendment that  was added  in the  House.   It                 
  would have put  the program  in permanent law  and it  could                 
  have been implemented by the Commissioner  of Administration                 
  when economic conditions warranted.   Governor Hickel stated                 
  that provision was  the reason  he vetoed SB  337, and  that                 
  provision is not contained in SB 1.                                          
                                                                               
  In  response  to Senator  Taylor's  question earlier  in the                 
  meeting on the number of employees that would be affected by                 
  the merger of  the two divisions  in the Department of  Fish                 
  and Game, Ms. Stewart said there  will be 35 permanent full-                 
  time  positions   eliminated  and   50  seasonal   positions                 
  eliminated in the FRED division alone.                                       
                                                                               
  Number 540                                                                   
                                                                               
  BOB WATTS, testifying from Fairbanks, said the "brain drain"                 
  argument   is  not   legitimate  because   the  program   is                 
  discretionary.  It is  going to impact every citizen  if the                 
  program  is  not  passed.     With  an  adequate  incentive,                 
                                                                               
                                                                               
  employees will retire,  and if they  retire in the State  of                 
  Alaska, they are going to spend their money in  the State of                 
  Alaska.  In addition, the position will be filled by another                 
  person  which will  put more funds  into the  local economy.                 
  The true beneficiaries will be the citizens of the state.                    
                                                                               
  Number 575                                                                   
                                                                               
  JOHN  VINETTE, from the  Mat-Su School  District, testifying                 
  from the Mat-Su  LIO, said their  school district is  facing                 
  some  drastic  monetary  cuts  for  the  next  fiscal  year.                 
  According to their  school board,  they will be  eliminating                 
  approximately  30 teaching  positions, and fiscal  year 1993                 
  looks even  gloomier.  Their school district views the early                 
  retirement incentive bill as a mens of avoiding job layoffs.                 
  During  the 1989-90 retirement  incentive program the Mat-Su                 
  School  District had 22 teachers retire  and, in every case,                 
  they  saved  money over  the  course  of three  years.   The                 
  minimum amount saved was $3,128 and the maximum amount saved                 
  was $36,643, which worked out to  an average of $21,276, and                 
  the approximate grand total that they saved over three years                 
  was a half million dollars.  He  stated their support for SB
  1.                                                                           
                                                                               
  TAPE 93-14, SIDE B                                                           
                                                                               
  Number 012                                                                   
                                                                               
  BOB  COLLINS,  a  state employee  testifying  from Kotzebue,                 
  stated he was interested in passage of SB 1 for himself.  He                 
  said it would save the state a lot money because he works at                 
  a  Range 18 L and someone could take his place at a Range 18                 
  A or  B and  save at least  $30,000 a  year on  his position                 
  alone.  He  said with the declining oil revenues, it is more                 
  fair to  let people retire  early instead  of laying  people                 
  off,  as long  as it  saves  the state  money, and  he can't                 
  understand  the  Administration's  failure  to  support  the                 
  legislation.                                                                 
                                                                               
  Number 555                                                                   
                                                                               
  CAROLE  ANDERSON  from  Ketchikan asked  what  has  been the                 
  effect  of the  Administration's  opposition  to  the  bill.                 
  SENATOR  LEMAN answered that his office  is working with the                 
  Administration and members of the  committee to formulate an                 
  approach that may be acceptable to the parties involved.                     
                                                                               
  Number 055                                                                   
                                                                               
  PAM CONRAD, President of  the Mat-Su Education  Association,                 
  testifying  from the  Mat-Su LIO,  spoke to  the cuts  their                 
  school district is  facing, and she said  the implementation                 
  of SB  1 will ensure that current employees will not be laid                 
  off, thereby crushing  their ability to provide  services to                 
                                                                               
                                                                               
  children  even  further.      She stated  the  Association's                 
  support for passage of the legislation.                                      
                                                                               
  Number 070                                                                   
                                                                               
  JOHN CYR, a  teacher at Wasilla High  School testifying from                 
  the Mat-Su  LIO, spoke  to the  effect layoffs  have had  on                 
  employees in the past.  He  said it is a sad situation  when                 
  school districts all  over the state  are forced to lay  off                 
  employees when SB 1  would alleviate the problem.   He urged                 
  the committee's favorable consideration of the legislation.                  
                                                                               
  Number 080                                                                   
                                                                               
  KATHLEEN  MANGELSDORF,   a  teacher  in  the  Mat-Su  School                 
  District  testifying from the  Mat-Su School District stated                 
  her support  for SB 1.   She believes the advantages  of the                 
  legislation outweight the  disadvantages of the legislation.                 
                                                                               
                                                                               
  Number 112                                                                   
                                                                               
  KARIN HOLSEN, testifying from  the Mat-Su LIO, said she  was                 
  just  a  concerned citizen  and passage  of  SB 1  would not                 
  affect her insofar as  retirement is concerned, but  it does                 
  affect her as a citizen  because of the money it  could save                 
  the state.  She said the bill makes sense, and she urged its                 
  passage.                                                                     
                                                                               
  There being no other  witnesses wishing to testify on  SB 1,                 
  SENATOR LEMAN closed  the public hearing and  announced that                 
  work would be done on a potentional committee substitute and                 
  that the bill  would be back  before the committee on  March                 
  12.                                                                          
                                                                               
  SENATOR LEMAN  adjourned the  meeting of  the State  Affairs                 
  Committee at 10:03 a.m.                                                      

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