Legislature(1997 - 1998)
04/28/1997 01:33 PM Senate CRA
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SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
April 28, 1997
1:33 p.m.
MEMBERS PRESENT
Senator Jerry Mackie, Chairman
Senator Gary Wilken, Vice Chairman
Senator Dave Donley
Senator Randy Phillips
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 130
"An Act amending the retirement incentive programs for
municipalities and school districts; and providing for an effective
date."
PREVIOUS SENATE COMMITTEE ACTION
SB 130 - No previous action to record.
WITNESS REGISTER
Senator Jim Duncan
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 130
Roxanne Stewart, Staff to Senator Duncan
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on SB 130
Ms. Lucy Hope, President
Mat-Su Education Association
P.O. Box 870887
Wasilla, AK 99687
POSITION STATEMENT: Testified in support of SB 130
John Cyr, President
NEA-Alaska
114 Second St.
Juneau, AK 99801
POSITION STATEMENT: Testifed in support of SB 130
Jack Kreinheder, Senior Policy Analyst
Office of Management & Budget
Office of the Governor
P.O. Box 110020
Juneau, AK 99811-0020
POSITION STATEMENT: Testified in support of SB 130
Bill Church, Retirement Supervisor
Division of Retirement & Benefits
Department of Administration
P.O. Box 110203
Juneau, AK 99811-0203
POSITION STATEMENT: Present to respond to questions
ACTION NARRATIVE
TAPE 97-17, SIDE A
Number 001
SB 130 RIP FOR SCHOOL DISTRICTS AND MUNICIPALITY
CHAIRMAN MACKIE called the Senate Community & Regional Affairs
Committee meeting to order at 1:33 p.m., and noted all committee
members were present. SB 130 was before the committee as the only
order of business.
SENATOR JIM DUNCAN , prime sponsor of SB 130, explained the
legislation will amend the retirement incentive program passed in
1996 to allow school districts and municipalities to request one or
more window periods before June 30, 1999 so that their employees
may participate in the program.
Under the terms of the retirement incentive legislation which
passed in 1995, the window period for school districts expired on
December 31, 1996, with retirement required on or before August 30,
1997. The application period for municipalities is open until June
30, 1997 with retirement required on or before February 1, 1998.
Senator Duncan said there were varying windows with the school
districts having the shortest window.
Senator Duncan said SB 130 will allow school districts and
municipalities to request one or more window periods up until June
30, 1999, with retirement required within six months of the end of
the application period. This gives school districts and
municipalities more flexibility to address declining revenues over
the same period as is available under the retirement incentive
program that applies to state employees.
Senator Duncan related that updated figures from the Division of
Retirement & Benefits show that currently there are 37 of 61 school
districts participating in the retirement incentive program. These
districts have designated almost 1,800 employees to participate
with an estimated savings over three years of almost $80 million if
all choose to participate. To date, 125 school employees have
actually retired with the rest expected to retire this summer after
summer vacation begins.
Senator Duncan said he thinks it is in the best interest of the
state's municipalities and school districts to allow them maximum
flexibility to address declining state revenues and increasing
demands for public service. He urged the committee's favorable
consideration of the legislation.
Number 080
SENATOR PHILLIPS inquired if Senator Duncan had been contacted by
the Anchorage School District, although he noted that the district
did not offer the RIP last year. SENATOR DUNCAN responded that he
had not be contacted by them, and he pointed out that the
legislation would not mandate the district to offer the program,
but it would give them another opportunity.
CHAIRMAN MACKIE said he didn't have a problem with the change being
proposed by Senator Duncan, and in authoring the legislation last
year, it actually was an oversight on his part that there wasn't a
little better window period. He then asked what level of savings
the Juneau School District was able to generate by participating in
the program. ROXANNE STEWART , staff to Senator Duncan, said she
was informed by the business manager of the Juneau School District
that they won't know what the savings will be until the retirements
actually occur this summer, but they believe it will be a
substantial number.
Number 115
LUCY HOPE , President, Mat-Su Education Association, testifying from
the Mat-Su Legislative Information Office, related the Mat-Su
School District participated in last year's retirement incentive
program and many of the teachers who will be retiring in June are
at or near the top of the salary schedule. Extending the window
for the program could allow more teachers to retire early. She
noted the newly hired teachers in the district do not bring in any
years of experience and so they are placed at the beginning of the
salary schedule, therefore, when a teacher at the top retires,
there is a guaranteed savings to the school district.
She said the Mat-Su School District will see the affect of this
program next year.
Ms. Hope advised she would be written testimony from 50 teachers in
support of SB 130, and she urged passage of the legislation.
Number 150
SENATOR DONLEY commented that he objects to any testimony that says
passage of this legislation is for the benefit of individual people
rather than whether it is a good public policy call. MS. HOPE
assured Senator Donley that the people who did write in support of
SB 130 are speaking because it saves the state and the school
district money and not because it personally benefits them.
Number 170
JOHN CYR , President, NEA-Alaska, voiced NEA's support for SB 130
because it clear to them that the savings for districts will be
considerable, especially considering the shrinking purchasing power
the districts have had over the last 10 years.
Number 180
SENATOR PHILLIPS asked if NEA is concerned about the "brain drain"
that will occur with the retirement of teachers with many years of
experience and expertise. MR. CYR acknowledged that it is a
consideration, but he said the thing that comes into play is that
no one is being forced into retirement. The people who are looking
to retire are those people who wish to seek either another career
or wish to be out of the classroom.
Number 200
CHAIRMAN MACKIE asked Mr. Cyr is he feels that this type of system
is forcing good teachers to retire when they don't necessarily want
to retire. MR. CYR responded that he has been teaching for many
years and he is not ready to retire and he wouldn't take the RIP.
He added that every circumstance is an individual one, but the
program allows an option for those people who want to do something
else. It has made a difference in school districts when they lose
that many senior people. He advised that during the interim they
will be looking at a universal mentoring program to build some kind
of system to make sure that there is some continuity when these
teachers retire and they are replaced by younger, inexperienced
teachers.
Number 260
JACK KREINHEDER , Senior Policy Analyst, Office of Management &
Budget, voiced the Administration's support for SB 130. He said
when the retirement incentive program passed last year, they
weren't sure whether the local governments necessarily wanted a
three-year window at that time because there was some concern that
if they did a three-year window people might wait hoping there
might be a later one. He said that while this program doesn't
affect the state directly, to the extent that school districts and
local governments receive a lot of state funds, we all have an
interest in helping them save money and make the state dollars that
they do get go farther.
CHAIRMAN MACKIE noted the presence of Bill Church, Retirement
Supervisor, Division of Retirement & Benefits, Department of
Administration.
Number 295
There being no further testimony on SB 130, CHAIRMAN MACKIE asked
for the pleasure of the committee.
SENATOR WILKEN moved SB 130 and the accompanying zero fiscal note
be passed out of committee with individual recommendations.
Hearing no objection, it was so ordered.
There being no further business to come before the committee, the
meeting was adjourned at 1:52 p.m.
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