Legislature(2015 - 2016)BELTZ 105 (TSBldg)


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* first hearing in first committee of referral
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Heard & Held
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Heard & Held
Moved SCS CSHB 146(CRA) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         April 9, 2015                                                                                          
                           3:32 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Chair                                                                                                     
Senator Bert Stedman, Vice Chair                                                                                                
Senator Lyman Hoffman                                                                                                           
Senator Dennis Egan                                                                                                             
MEMBERS ABSENT                                                                                                                
Senator Anna MacKinnon                                                                                                          
COMMITTEE CALENDAR                                                                                                            
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 146(CRA)                                                                                
"An  Act  relating  to  a municipal  tax  exemption  for  certain                                                               
subdivided property."                                                                                                           
     - MOVED SCS CSHB 146(CRA) OUT OF COMMITTEE                                                                                 
SENATE BILL NO. 79                                                                                                              
"An Act relating to reemployment  of persons who retire under the                                                               
defined benefit plan of the teachers' retirement system."                                                                       
     - HEARD & HELD                                                                                                             
SENATE BILL NO. 88                                                                                                              
"An  Act relating  to new  defined  benefit tiers  in the  public                                                               
employees'  retirement   system  and  the   teachers'  retirement                                                               
system;  providing certain  employees  an  opportunity to  choose                                                               
between  the defined  benefit and  defined contribution  plans of                                                               
the  public  employees'  retirement   system  and  the  teachers'                                                               
retirement system; and providing for an effective date."                                                                        
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 146                                                                                                                  
SHORT TITLE: MUNICIPAL TAX EXEMPTION                                                                                            
SPONSOR(s): REPRESENTATIVE(s) MUNOZ                                                                                             
03/12/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/12/15       (H)       CRA                                                                                                    
03/24/15       (H)       CRA AT 8:00 AM BARNES 124                                                                              
03/24/15       (H)       Moved CSHB 146(CRA) Out of Committee                                                                   
03/24/15       (H)       MINUTE(CRA)                                                                                            
03/25/15       (H)       CRA RPT CS(CRA) 2DP 5NR                                                                                
03/25/15       (H)       DP: SEATON, TILTON                                                                                     
03/25/15       (H)       NR: REINBOLD, NAGEAK, DRUMMOND, ORTIZ,                                                                 
03/27/15       (H)       TRANSMITTED TO (S)                                                                                     
03/27/15       (H)       VERSION: CSHB 146(CRA)                                                                                 
03/30/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/30/15       (S)       CRA, FIN                                                                                               
04/07/15       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
04/07/15       (S)       Heard & Held                                                                                           
04/07/15       (S)       MINUTE(CRA)                                                                                            
04/09/15       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
BILL: SB 79                                                                                                                   
SHORT TITLE: REEMPLOYMENT OF RETIRED TEACHERS & ADMIN                                                                           
SPONSOR(s): SENATOR(s) DUNLEAVY                                                                                                 
03/18/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/18/15       (S)       EDC, CRA                                                                                               
03/26/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
03/26/15       (S)       Heard & Held                                                                                           
03/26/15       (S)       MINUTE(EDC)                                                                                            
03/31/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
03/31/15       (S)       Heard & Held                                                                                           
03/31/15       (S)       MINUTE(EDC)                                                                                            
04/02/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
04/02/15       (S)       Scheduled but Not Heard                                                                                
04/07/15       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
04/07/15       (S)       <Pending Referral>                                                                                     
04/07/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
04/07/15       (S)       Moved CSSB 79(EDC) Out of Committee                                                                    
04/07/15       (S)       MINUTE(EDC)                                                                                            
04/08/15       (S)       EDC RPT CS 1DP 1NR 3AM NEW TITLE                                                                       
04/08/15       (S)       DP: DUNLEAVY                                                                                           
04/08/15       (S)       NR: HUGGINS                                                                                            
04/08/15       (S)       AM: STEVENS, GIESSEL, GARDNER                                                                          
04/09/15       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
BILL: SB 88                                                                                                                   
SHORT TITLE: TEACHERS & PUB EMPLOYEE RETIREMENT PLANS                                                                           
SPONSOR(s): SENATOR(s) EGAN                                                                                                     
03/25/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/25/15       (S)       CRA, FIN                                                                                               
04/09/15       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
04/09/15       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
TERRY HARVEY, Staff                                                                                                             
Representative Cathy Munoz                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided an overview of HB 146 on behalf of                                                               
the sponsor.                                                                                                                    
SHEILA PETERSON, Staff                                                                                                          
Senator Mike Dunleavy                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided an overview of SB 79 on behalf of                                                                
the sponsor.                                                                                                                    
LISA SKILES PARADY, Executive Director                                                                                          
Alaska   Council    of   School   Administrators,    and   Alaska                                                               
Superintendents Association                                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 79.                                                                            
PETER HOEPFNER, Member                                                                                                          
Cordova School District Board of Education                                                                                      
Cordova, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of SB 79.                                                                            
PEGGY COWAN, Superintendent                                                                                                     
North Slope Borough School District                                                                                             
Barrow, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 79.                                                                            
CHRIS REITAN, Superintendent                                                                                                    
Galena City School District                                                                                                     
Galena, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 79.                                                                            
DEENA PARAMO, Superintendent                                                                                                    
Matanuska-Susitna Borough School District                                                                                       
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 79.                                                                            
PATRICK MAYER, Superintendent                                                                                                   
Wrangell Public School District                                                                                                 
Wrangell, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of SB 79.                                                                            
MARY MCMAHON, President-Elect                                                                                                   
Alaska Association of School Principals                                                                                         
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 79.                                                                            
JESSE KIEHL, Staff                                                                                                              
Senator Dennis Egan                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supplemented the introduction of SB 88.                                                                   
AARON DANIELSON, President                                                                                                      
Public Safety Employees Association                                                                                             
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 88.                                                                            
JACOB BERA, member                                                                                                              
Region VI Board of Directors                                                                                                    
National Education Association-Alaska                                                                                           
Chugiak, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of SB 88.                                                                            
PEGGY COWAN, Superintendent                                                                                                     
North Slope Borough School District                                                                                             
Barrow, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 88.                                                                            
ACTION NARRATIVE                                                                                                              
3:32:05 PM                                                                                                                    
CHAIR  CLICK  BISHOP called  the  Senate  Community and  Regional                                                             
Affairs Standing Committee meeting to  order at 3:32 p.m. Present                                                               
at the  call to order  were Senators Stedman, Hoffman,  Egan, and                                                               
Chair Bishop.                                                                                                                   
                 HB 146-MUNICIPAL TAX EXEMPTION                                                                             
3:33:18 PM                                                                                                                    
CHAIR BISHOP announced the consideration of HB 146. [Senate CS                                                                  
for CSHB 146, labeled 29-LS0048\H, was before the committee.]                                                                   
3:33:25 PM                                                                                                                    
TERRY  HARVEY, Staff,  Representative Cathy  Munoz, Alaska  State                                                               
Legislature,  Juneau,  Alaska,  summarized  that  HB  146  is  an                                                               
optional  tool  for  municipalities  to  help  develop  land  for                                                               
housing.  He   said  HB   146  addresses   a  housing   issue  by                                                               
incentivizing development  of three  or more lots  on a  piece of                                                               
property.  He   specified  that   HB  146   would  allow   for  a                                                               
municipality, if they  choose, to abate the  increase in property                                                               
tax  above  and  beyond  the   property  tax  base  at  the  time                                                               
development begins,  until the property  went into  commercial or                                                               
residential  use  where the  full  assessment  kicks in  for  the                                                               
municipality. He  summarized that  HB 146  has flexibility  for a                                                               
municipality to choose to abate all  or a portion of the increase                                                               
in property taxes.                                                                                                              
CHAIR BISHOP  confirmed that public  testimony was closed  at the                                                               
last  meeting and  noted that  the bill  had overwhelming  public                                                               
3:35:15 PM                                                                                                                    
At ease.                                                                                                                        
3:35:41 PM                                                                                                                    
SENATOR  STEDMAN  moved to  report  the  bill [29-LS0048\H]  from                                                               
committee with individual  recommendations, attached fiscal note,                                                               
and title change.                                                                                                               
CHAIR  BISHOP found  no objection  and announced  that [SCS  CSHB                                                               
146(CRA)]  was  moved  from the  Senate  Community  and  Regional                                                               
Affairs Standing Committee.                                                                                                     
3:36:06 PM                                                                                                                    
At ease.                                                                                                                        
         SB 79-REEMPLOYMENT OF RETIRED TEACHERS & ADMIN                                                                     
3:37:30 PM                                                                                                                    
CHAIR BISHOP announced the consideration of SB 79.                                                                              
3:38:05 PM                                                                                                                    
SHEILA  PETERSON,  Staff,  Senator Mike  Dunleavy,  Alaska  State                                                               
Legislature, Juneau,  Alaska, said  she would  address SB  79 and                                                               
the committee substitute that passed  out of the Senate Education                                                               
MS. PETERSON revealed  that Alaska is experiencing  a shortage of                                                               
qualified educators,  especially in hard  to fill areas,  and the                                                               
situation  is  compounded  by  the  drastic  reduction  in  state                                                               
revenue  due to  lower oil  prices. SB  79 expands  the pool  for                                                               
experienced   and   qualified   teachers  available   to   school                                                               
districts. SB  79 becomes another  tool for the  school districts                                                               
to be able to reach and educate Alaska's students.                                                                              
She set forth  that the bill allows school  districts to reemploy                                                               
educators younger than 62 who have  been retired for one year, or                                                               
educators older  than 62  who have  been retired  for at  least 3                                                               
months.  She specified  that SB  79 will  not require  any school                                                               
district  to reemploy  any particular  individual, the  bill only                                                               
gives the  school district the  option to  do so. She  noted that                                                               
educators  rehired   under  the  bill's  proviso   receive  their                                                               
retirement benefits during the period of reemployment.                                                                          
3:39:47 PM                                                                                                                    
She   explained  that   the  Division   of  Retirement   Benefits                                                               
recommended  that  the  CS  in  the  Senate  Education  Committee                                                               
require school  districts to  pay the  standard 12.56  percent to                                                               
the  Teachers'  Retirement System  (TRS)  that  is based  on  the                                                               
educator's salary. She  noted that the standard  12.56 percent is                                                               
the  same rate  that the  school  districts must  pay for  active                                                               
She revealed  that a  recent Alaska  Teacher Placement  (ATP) Job                                                               
Fair had 707  openings for teachers and  administrators, only 265                                                               
candidates attended.  She asserted  that the  job fair  shows the                                                               
disparity between people  looking for jobs and  the openings that                                                               
school districts have.                                                                                                          
She summarized that SB 79  does not replace active employees, but                                                               
provides school districts  with another tool to be  able to staff                                                               
their schools.                                                                                                                  
SENATOR HOFFMAN asked where the job fair openings were located.                                                                 
MS. PETERSON  replied that  she did not  know, but  would provide                                                               
additional information.                                                                                                         
3:41:37 PM                                                                                                                    
SENATOR  STEDMAN asked  to verify  that a  local school  district                                                               
pays the normal 12.56 percent TRS  rate. He asked what the future                                                               
accumulated benefits are  when a rehired-teacher is  pulling in a                                                               
MS. PETERSON explained that Senator  Dunleavy envisioned a school                                                               
district first  going to active  employees to fill  positions and                                                               
then turning to retired teachers  if a position cannot be filled.                                                               
She  added  that  a  reemployed   teacher  would  maintain  their                                                               
retirement benefits throughout their reemployment period.                                                                       
SENATOR STEDMAN asked that Ms.  Peterson address the accumulation                                                               
of any future additional benefits.                                                                                              
MS. PETERSON replied that there  is no accumulation of any future                                                               
SENATOR  STEDMAN asked  to  verify  that there  is  no impact  on                                                               
potential  unfunded liabilities  where the  school district  just                                                               
pays the 12.56 percent to help mitigate the unfunded liability.                                                                 
MS. PETERSON  answered that Senator  Dunleavy asked  the Division                                                               
of Retirement  and Benefits  to submit  a reasonable  fiscal note                                                               
that would  not slow down  the bill's concept and  provide school                                                               
districts  with   another  hiring   tool.  She  noted   that  the                                                               
division's actuary was concerned  that current employees might be                                                               
incentivized  to  retire  early  and  go back  on  the  rolls  as                                                               
reemployed retired  teachers. She asserted that  Senator Dunleavy                                                               
does not think the actuary's concerns  would be the case, but the                                                               
CS proposed in the Senate  Education Committee helps mitigate any                                                               
potential increase into the unfunded liability.                                                                                 
3:44:21 PM                                                                                                                    
CHAIR BISHOP asked how many  school districts will be impacted by                                                               
SB 79.                                                                                                                          
MS. PETERSON replied  that school districts have  been asking for                                                               
the option  provided by  SB 79.  She surmised that  a third  to a                                                               
half  of  Alaska's 53  school  districts  will be  interested  in                                                               
rehiring retired  teachers. She  explained that  Senator Dunleavy                                                               
envisions the  bill's benefit, particularly in  rural Alaska with                                                               
30  percent  turnover  rate,  is to  supplement  new  hires  with                                                               
experienced teachers that know Alaska and  can act as a mentor to                                                               
the new  teachers. She noted  that Senator Dunleavy was  a leader                                                               
several years  ago of  the mentor program  and saw  firsthand the                                                               
benefits from mentoring.                                                                                                        
3:47:02 PM                                                                                                                    
LISA SKILES PARADY, Executive Director,  Alaska Council of School                                                               
Administrators,  and  Alaska Superintendents  Association  (ASA),                                                               
Juneau, Alaska,  said she had  prepared testimony but  would also                                                               
answer questions.                                                                                                               
CHAIR BISHOP  asked for hypotheticals  that could be  employed if                                                               
SB 79 became law.                                                                                                               
MS. SKILES PARADY revealed turnover rates as follows:                                                                           
   · 30 percent or higher in rural areas,                                                                                       
   · 7 percent or higher for teachers in urban areas,                                                                           
   · 14 percent for principals,                                                                                                 
   · 50 percent for superintendents new to Alaska over the past                                                                 
     2 years.                                                                                                                   
She  explained  that  in  terms  of  answering  Senator  Bishop's                                                               
question  will  depend  on  the  position's  greater  need  where                                                               
rehiring retired superintendents will  be used more than rehiring                                                               
retired urban teachers.                                                                                                         
She provided  a breakdown of  707 positions available at  the ATP                                                               
Job Fair as follows:                                                                                                            
   · administrative positions: 53,                                                                                              
   · athletic positions: 15,                                                                                                    
   · elementary teaching positions: 125,                                                                                        
   · high school teaching positions: 115,                                                                                       
   · middle school teaching positions: 43,                                                                                      
   · nutrition services and other: 116,                                                                                         
   · student support services: 131.                                                                                             
She pointed out that the 265  people attending the recent ATP Job                                                               
Fair  in addition  to  the University  of  Alaska (UA)  producing                                                               
about 250 people shows that there is a supply-demand issue.                                                                     
She said questions  have been asked whether new  teachers will be                                                               
denied the  opportunity to take  the positions;  school districts                                                               
wish  they  had  that  problem,  but  that  is  not  the  current                                                               
She summarized  that rehiring retired  teachers will  see limited                                                               
use,  but the  ability to  rehire  retired teachers  will add  an                                                               
additional  tool. She  surmised  that under  half  of the  school                                                               
districts will rehire retired teachers.                                                                                         
3:50:34 PM                                                                                                                    
CHAIR BISHOP noted that there  are 53 school districts in Alaska.                                                               
He asked that  Ms. Skiles Parady provide an  approximation of how                                                               
many positions would be filled by rehired retirees.                                                                             
MS.  SKILES PARADY  answered  that less  than  200 teachers  were                                                               
hired the  last time rehiring retirees  was in law. She  said the                                                               
school districts'  needs are greater  now, but  rehiring retirees                                                               
should be comparable.  She noted that 85 percent  of UA graduates                                                               
are working  in education occupations,  but a greater  need still                                                               
3:52:02 PM                                                                                                                    
SENATOR STEDMAN  asked what  the current  status was  for retire-                                                               
MS. SKILES PARADY  answered that school districts  are allowed to                                                               
hire up  to 49 percent of  the time for a  position. She admitted                                                               
that  recruiting someone  for  a halftime  position  in a  highly                                                               
qualified or  high needs  area like  special education,  math, or                                                               
science is almost impossible to do.                                                                                             
3:54:01 PM                                                                                                                    
SENATOR  STEDMAN asked  that Ms.  Skiles Parady  explain what  49                                                               
percent means.                                                                                                                  
MS. SKILES PARADY  answered that 49 percent refers  to time where                                                               
49 percent is less than halftime.                                                                                               
SENATOR HOFFMAN  noted that the  turnover rates for  rural Alaska                                                               
was 30  percent and 7 percent  in urban Alaska. He  asked why the                                                               
intent  was  to  make  the program  statewide  when  the  obvious                                                               
problem is  in rural Alaska.  He inquired why the  legislation is                                                               
not  made to  address only  hiring retired  individuals in  areas                                                               
that have the highest turnover percentage.                                                                                      
MS.  SKILES PARADY  concurred that  there  is a  greater need  in                                                               
rural Alaska, but noted that  one of the largest school districts                                                               
has suffered  from not  being able  to recruit  special education                                                               
teachers.  She  stated  that   the  teachers  and  administrators                                                               
shortage is a  statewide issue that impacts both  rural and urban                                                               
3:56:19 PM                                                                                                                    
SENATOR HOFFMAN  asked if there is  anything that can be  done to                                                               
address the  areas in the  state that have the  highest turnover.                                                               
He said  the legislation seems  to set  into motion a  program to                                                               
hire retirees to  address a statewide problem, but  four times as                                                               
much  of  a problem  in  rural  Alaska  versus urban  Alaska.  He                                                               
asserted that  the majority of  retire-rehires will occur  in the                                                               
urban areas.                                                                                                                    
MS. SKILES  PARADY answered that  she agreed that  recruiting for                                                               
rural areas is  more difficult, but urban  areas struggle equally                                                               
to  recruit highly  specialized areas  where teachers  in special                                                               
education, math, and  science are in short supply  both in Alaska                                                               
and  nationally. She  noted that  retire-rehire is  one of  ASA's                                                               
highest priorities.                                                                                                             
3:58:55 PM                                                                                                                    
SENATOR  HOFFMAN   asked  what  the  special   education  teacher                                                               
turnover  rates were  in rural  versus urban  Alaska. He  assumed                                                               
that special education teachers are  more specialized and tend to                                                               
look at getting employed in urban areas.                                                                                        
MS. SKILES PARADY responded that  she will provide specific data.                                                               
She conceded that specialized positions  are hard to recruit for.                                                               
She  said  131  specialized  openings exist  and  the  number  of                                                               
positions open climbs every day.                                                                                                
SENATOR HOFFMAN asked if the Legislature  should wait on SB 79 to                                                               
see exactly what  happens with teacher layoffs due  to the budget                                                               
cuts that are being contemplated.                                                                                               
MS. SKILES  PARADY replied  that ASA  hopes that  the Legislature                                                               
passes  SB  79  because  districts are  not  required  to  rehire                                                               
retirees,  but  the  legislation   provides  another  tool  as  a                                                               
SENATOR HOFFMAN asked  if there are programs  or legislation that                                                               
can be  proposed to  target hiring teachers  in rural  Alaska and                                                               
does ASA have any recommendations in that regard.                                                                               
4:01:38 PM                                                                                                                    
MS. SKILES  PARADY replied that  ASA supports all  districts. She                                                               
noted  that  ASA  has  been  on  record  supporting  things  like                                                               
mentoring. She stated that mentoring  focuses on rural Alaska and                                                               
is a best practice to retain teachers.                                                                                          
SENATOR HOFFMAN responded that mentoring  is an existing program.                                                               
He asked if  ASA has any new recommendations to  address the high                                                               
turnover rate in rural Alaska.                                                                                                  
MS. SKILES  PARADY answered  that SB 79  is legislation  that has                                                               
come directly from superintendents in rural areas.                                                                              
SENATOR HOFFMAN  asked specifically  if legislation is  being put                                                               
forward  that  is aimed  at  those  areas  that have  30  percent                                                               
turnover, not  over-arching legislation that addresses  the whole                                                               
MS.  SKILES PARADY  replied that  ASA has  not put  forward ideas                                                               
specific to the 30 percent turnover rate in rural Alaska.                                                                       
SENATOR HOFFMAN asked which state  organization is looking at the                                                               
high  turnover rate  in  rural Alaska  and is  trying  to find  a                                                               
MS. SKILES PARADY answered that  ASA and the Alaska School Boards                                                               
Association  are the  two organizations.  She  remarked that  not                                                               
splitting between urban  and rural is a very  important tenet for                                                               
both organizations. She  said ASA advocates for  the entire state                                                               
and  both urban  and  rural  areas are  suffering  from the  high                                                               
turnover rate.                                                                                                                  
SENATOR HOFFMAN  replied that  he is not  trying to  divide urban                                                               
and  rural. He  detailed that  he is  trying to  acknowledge that                                                               
there is four times the problem  in rural Alaska than there is in                                                               
urban  Alaska.  He  said  students suffer  when  there  are  high                                                               
turnover rates and asked what can  be done to get the students in                                                               
rural Alaska on parity by reducing the turnover rate.                                                                           
4:04:52 PM                                                                                                                    
CHAIR BISHOP asked that when  exit reviews are done, why teachers                                                               
and  superintendents are  leaving.  He remarked  that fixing  the                                                               
turnover  rate cannot  be done  until the  reason for  leaving is                                                               
known.  He  pointed  out  that there  are  rural  districts  with                                                               
teachers  that have  served  for 20  years.  He recommended  that                                                               
rural  districts that  have  retained teachers  for  20 years  be                                                               
asked how  they are doing it.  He noted another problem  where he                                                               
knows  UA-Fairbanks  graduates  that have  applied  for  teaching                                                               
positions that  could not  get hired in  Alaska, but  states like                                                               
Arizona have hired them immediately.                                                                                            
4:07:17 PM                                                                                                                    
SENATOR  STEDMAN  revealed  that  he  has 12  of  the  53  school                                                               
districts  in his  district and  he monitors  turnover rates  and                                                               
performance scores.  He said  he does  not have  a good  feel for                                                               
regional  data on  the state's  other school  districts. He  said                                                               
having additional data  for the bill will allow  the committee to                                                               
focus  on  either the  problem  areas  versus a  broad  statewide                                                               
MS. SKILES PARADY  replied that she will provide  a turnover rate                                                               
breakdown  by  geographic  area.  She  addressed  Chair  Bishop's                                                               
previous statement  and noted that  districts do read  their exit                                                               
interviews.  She added  that part  of  what has  happened is  the                                                               
state  has   lost  competitiveness  in  terms   of  salaries  and                                                               
retirement benefits. She  asserted that Alaska no  longer is able                                                               
to hold its  own against the Lower 48,  particularly with pending                                                               
district   cuts.   She  noted   that   rural   areas  also   face                                                               
technological issues due to internet limitations.                                                                               
4:10:35 PM                                                                                                                    
PETER  HOEPFNER,   member,  Cordova  School  District   Board  of                                                               
Education, Cordova, Alaska, stated  that SB 79, the retire-rehire                                                               
bill,  is  a good  bill.  He  revealed  that the  Cordova  School                                                               
District faced a  sudden departure of its  superintendent in mid-                                                               
July  and was  allowed  special dispensation  to  hire a  retired                                                               
superintendent  for the  school year.  He said  SB 79  will allow                                                               
districts  to  utilize  teachers   and  administrators  during  a                                                               
crisis. He  set forth that  the bill  would be an  excellent tool                                                               
that districts  could use to  fill positions critical  to schools                                                               
when facing an  unexpected vacancy outside of  the regular hiring                                                               
season. He pointed  out that there are not an  adequate number of                                                               
teachers  applying  for  all  of   the  open  positions  and  the                                                               
superintendent pool has been diminishing  over the past number of                                                               
4:13:35 PM                                                                                                                    
PEGGY   COWAN,  Superintendent,   North   Slope  Borough   School                                                               
District,  Barrow, Alaska,  stated that  she supports  SB 79  and                                                               
noted that the  Alaska Council of School  Administrators made the                                                               
bill's legislation one of its  statewide priorities. She revealed                                                               
that the  North Slope  Borough School  District has  27 vacancies                                                               
remaining and  added that a  teacher resigned prior to  the start                                                               
of  the previous  year and  the position  was not  replaced until                                                               
January.  She   asserted  that  the   bill  would   help  provide                                                               
flexibility for a district in  high quality hires. She noted that                                                               
she  was superintendent  in Juneau  when  a similar  bill was  in                                                               
place and the district rarely used  it, but the district did hire                                                               
retirees mostly  for specialist positions.  She pointed  out that                                                               
the  new amendment  where the  districts are  billed for  the TRS                                                               
retirement  was different  than it  has been  with Alaska  Public                                                               
Employees' Retirement  System (PERS).  She remarked that  she was                                                               
wondering why there is a difference with TRS and PERS.                                                                          
4:17:16 PM                                                                                                                    
CHRIS  REITAN,  Superintendent,   Galena  City  School  District,                                                               
Galena, Alaska,  stated that SB 79  was a good bill  and provides                                                               
one extra  tool for  school districts  in the  recruiting process                                                               
with  no  financial  harm  to  the state.  He  pointed  out  that                                                               
superintendents have  turned over  quite a bit  in the  state and                                                               
districts are scrambling to find  administrators who have Alaskan                                                               
experience and  success who can  provide dedicated  leadership in                                                               
difficult times.  He summarized that  the bill provides  one more                                                               
avenue  to fill  high needs  areas and  positions that  cannot be                                                               
4:19:06 PM                                                                                                                    
DEENA  PARAMO, Superintendent,  Matanuska-Susitna Borough  School                                                               
District,  Palmer,  Alaska,  stated  that for  years  the  Mat-Su                                                               
School  District  has  accessed   the  extensive  experience  and                                                               
expertise  of retired  employees  and educators  by allowing  for                                                               
temporary  and part-time  employment opportunities.  She asserted                                                               
that the district's  efforts to capitalize on  a talented veteran                                                               
workforce  have  been severely  limited  without  a provision  to                                                               
allow for  the unrestricted reemployment  of retirees such  as SB                                                               
MS.  PARAMO stated  that  as she  understands  the proposed  bill                                                               
would  permit  districts to  essentially  enter  into an  at-will                                                               
employment agreement with a retired  teacher or administrator, so                                                               
long as the  individual has been retired for 3  months or a year,                                                               
depending  on  age. She  detailed  that  current protections  and                                                               
benefits such as  tenure, sick leave, and  health insurance would                                                               
not  be required  as the  nature of  the employment  relationship                                                               
with a retired individual.                                                                                                      
She  assured  the  committee that  the  reemployment  of  retired                                                               
teachers  is not  pursued  in Mat-Su  to avoid  the  hire of  new                                                               
teachers.  She said  retirees fill  gaps when  properly certified                                                               
staff cannot  be hired in hard  to fill areas. She  added that SB                                                               
79  can provide  significant  savings where  certain costs,  most                                                               
notably  health  insurance, would  not  need  to be  provided  to                                                               
retirees. She remarked  that savings could be  redirected back to                                                               
the  classroom environment  or even  used to  hire new  classroom                                                               
She  concurred with  Senator Hoffman's  sentiment  in regards  to                                                               
incentivizing  rural  Alaska  for  teachers.  She  proposed  that                                                               
another bill come forward where  individuals are offered an extra                                                               
$10,000 per  year to be collected  after the third or  fifth year                                                               
of   rural-service.  She   summarized   that   having  a   stable                                                               
educational  environment  was  an  imperative  for  children  all                                                               
around Alaska.                                                                                                                  
4:22:26 PM                                                                                                                    
PATRICK MAYER,  Superintendent, Wrangell Public  School District,                                                               
Wrangell,  Alaska,  said  he supports  the  legislation  but  was                                                               
puzzled   to  see   the  amendment   suggesting   a  12   percent                                                               
contribution  for rehires  paid for  by the  school district.  He                                                               
said   there  is   a  shortage   of  teachers,   principals,  and                                                               
superintendents.   He   added   that  the   turnover   rate   for                                                               
superintendents has  been 50  percent over the  past 2  years. He                                                               
noted that there is a  national shortage of teachers and asserted                                                               
that Alaska  was not  competitive in  benefits and  salaries with                                                               
the Lower  48, especially in recruiting  special education, math,                                                               
and science educators.                                                                                                          
MR. MAYER  remarked that  the bill  is not a  tool to  misuse and                                                               
will  be used  when needed,  but  he asserted  that the  district                                                               
encourages new hires  to fill vacant spots. He set  forth that SB                                                               
79  would allow  districts to  fill  positions in  a manner  that                                                               
won't negatively  impact a retired  teacher where  the individual                                                               
would  continue to  collect their  retirement benefits  while the                                                               
cost of the  district would be minimal. He summarized  that SB 79                                                               
would be a  great tool in the district's toolbox  in allowing the                                                               
option of employing retired teachers.                                                                                           
4:24:57 PM                                                                                                                    
MARY  MCMAHON,  President-Elect,  Alaska  Association  of  School                                                               
Principals, Palmer, Alaska,  stated that SB 79  would provide the                                                               
best educators by increasing the  pool of candidates for Alaska's                                                               
students, especially  when the state  is experiencing  a shortage                                                               
in securing  quality candidates.  She remarked  that she  did not                                                               
have a  concern in people retiring  and wanting to get  back into                                                               
the system  right away. She  set forth that retirees  that return                                                               
to public education could very well  be the best candidates to do                                                               
the job in serving the best interests of students and schools.                                                                  
4:27:46 PM                                                                                                                    
CHAIR BISHOP  closed public  testimony and  announced that  SB 79                                                               
would  be held  in committee.  He called  on school  districts to                                                               
consider how  they are planning  for succession in  growing their                                                               
own teachers, principals, and superintendents.                                                                                  
4:29:07 PM                                                                                                                    
At ease.                                                                                                                        
         SB 88-TEACHERS & PUB EMPLOYEE RETIREMENT PLANS                                                                     
4:30:06 PM                                                                                                                    
CHAIR BISHOP called the committee back to order and announced                                                                   
the consideration of SB 88.                                                                                                     
4:31:16 PM                                                                                                                    
SENATOR EGAN, as the sponsor, introduced SB 88 as follows:                                                                      
     SB 88  let's teachers, police, firefighters,  and other                                                                    
     public  employees choose  one of  two state  retirement                                                                    
     systems: an individual  defined contribution retirement                                                                    
     account, or earning a new defined benefit pension.                                                                         
     A defined  benefit pension takes  time to earn,  but it                                                                    
     rewards  public   servants  by  letting  them   earn  a                                                                    
     guaranteed monthly benefit when  they retire. For long-                                                                    
     term  employees,   they  can   earn  help   paying  for                                                                    
     healthcare, they  can stay in  Alaska and  pay property                                                                    
     taxes  to their  local municipality.  Alaska's teachers                                                                    
     and public  employees don't  earn the  private sector's                                                                    
     defined benefit  of Social Security and  many even lose                                                                    
     Social  Security benefits  they  earned  in their  past                                                                    
     jobs. For most, a  defined benefit pension makes sense,                                                                    
     but many will still  choose defined contribution; as an                                                                    
     example,  some  have  a   military  or  private  sector                                                                    
     pension or  some have a  spouse employed in  Alaska and                                                                    
     only plan to  stay a few years. Others  want to control                                                                    
     their investments  or take their savings  to their next                                                                    
     job, they could choose defined contribution.                                                                               
     SB 88 creates  a new, more stable  and more predictable                                                                    
     defined benefit  pension tier. A few  years ago, Alaska                                                                    
     beefed up oversight of the  pension system; SB 88 keeps                                                                    
     those  smart  safeguards,  making  Alaska's  retirement                                                                    
     system  stronger  than  ever. Analysis  of  a  previous                                                                    
     version of  this bill showed  it saved the  state about                                                                    
     $70 million  in 5 years and  it is cost neutral  in the                                                                    
     long term,  it shares the  risk of rising  health costs                                                                    
     between employees  and employers, and it  adds nothing,                                                                    
     not one  red-cent to the unfunded  liabilities from the                                                                    
     past. To  make the  new system cost  neutral, employees                                                                    
     will  share the  risk  of health  costs  rising in  the                                                                    
     future, that's  a risk  worth taking,  I think,  and is                                                                    
     fair to Alaskans.                                                                                                          
4:33:55 PM                                                                                                                    
JESSE   KIEHL,  Staff,   Senator   Dennis   Egan,  Alaska   State                                                               
Legislature,  Juneau,  Alaska,  noted  that  testimony  from  the                                                               
previous bill  pointed out some  of the difficulties in  the very                                                               
complex question  of teacher retention.  He stated that  he would                                                               
focus on the economic impact of pensions as follows:                                                                            
     The  total economic  impact of  just the  PERS and  TRS                                                                    
     pensions  to   Alaska,  according  to   an  independent                                                                    
     research group,  is about $1.4 billion  in our economy.                                                                    
     More than 70 percent of  Alaska's PERS and TRS retirees                                                                    
     stay in-state and that's by  design, the pension system                                                                    
     has a cost of living  increase if you retire in Alaska.                                                                    
     The  PERS and  TRS  trust together  paid  more than  $1                                                                    
     billion  in  fiscal  year  2014  in  pension  payments,                                                                    
     roughly 90  percent of those  dollars stayed  in state.                                                                    
     So that really  will show you how effective  that is in                                                                    
     helping  Alaska's public  servants  to  retire here  in                                                                    
     Alaska, and as  Senator Egan said, have  homes in their                                                                    
     communities  and contribute  to their  local economies.                                                                    
     In that sense,  the pension system has been  one of the                                                                    
     shock-absorbers  for our  economy through  the national                                                                    
     downturn, there  have been a number  of them, certainly                                                                    
     healthy  capital  budgets  were  a  major  piece;  but,                                                                    
     through the coming years, that  more than $1 billion in                                                                    
     functionally  payroll,   retirement  payroll,   and  an                                                                    
     additional $500 million in medical  benefits, will be a                                                                    
     huge element in keeping our local economies healthy.                                                                       
4:36:35 PM                                                                                                                    
MR. KIEHL stated that SB 88 addresses turnover as follows:                                                                      
     SB  88 also  addresses a  major cost  for the  State of                                                                    
     Alaska  from  municipalities  and school  districts  of                                                                    
     turnover. The  cost of training  new employees  is very                                                                    
     high and when  you can retain good  employees, not lose                                                                    
     them to  other places and  other folks, you save  a lot                                                                    
     of public dollars,  you make a much  more efficient use                                                                    
     of  the public  treasury, that  is of  course vital  to                                                                    
     municipalities   and  school   districts  using   local                                                                    
     property taxes. Just  to give you a  couple of, frankly                                                                    
     fairly dated  estimates, ten  years ago  the Department                                                                    
     of Fish and  Game estimated the cost of  training a new                                                                    
     biologist was  $16,000 in their first  couple of years,                                                                    
     the Department  of Public Safety  estimated that  a new                                                                    
     state  trooper  through  the  academy,  equipment,  and                                                                    
     training was $150,000.                                                                                                     
     For those who wish to  earn a pension, those who choose                                                                    
     to make that choice, at  present, that is not available                                                                    
     to them  in Alaska, and so  we are beginning to  see in                                                                    
     exit  interviews  an  increasing number  of  folks  who                                                                    
     elect  to begin  their  careers  here, get  significant                                                                    
     training,  and  then  take  their  portable  retirement                                                                    
     benefit  south. Now  for  those who  want  to do  that,                                                                    
     that's the ideal  choice and SB 88  retains that choice                                                                    
     for them,  but for  those who would  prefer to  stay in                                                                    
     Alaska throughout  their lives,  stay local as  we grow                                                                    
     our own, the  opportunity to earn a  pension comes back                                                                    
     into existence with SB 88.                                                                                                 
4:38:19 PM                                                                                                                    
CHAIR  BISHOP  noted that  there  was  no  need for  a  sectional                                                               
analysis, because  the bill does  not have  a fiscal note  at the                                                               
present  time. He  stated  that he  looks  forward to  ultimately                                                               
reviewing the bill's numbers in Senate Finance.                                                                                 
MR. KIEHL summarized as follows:                                                                                                
     Employees will  pay more of  their paychecks  into this                                                                    
     new defined benefit  tiers than any of  the old defined                                                                    
     benefit tier.  Employees will contribute more  cash and                                                                    
     will  always  pay  a  share   of  their  healthcare  in                                                                    
     retirement; in the old defined  benefit tiers, that was                                                                    
     not the case.  In this tier, depending on  how long you                                                                    
     serve,  you will  pay anywhere  from 10  percent to  30                                                                    
     percent or more of  your retiree health insurance; that                                                                    
     saves a great deal of money,  it shares a great deal of                                                                    
     risk with  the employees, and  there is an  adjuster in                                                                    
     the bill  that ensures  that the pre-funding  cost, the                                                                    
     amount  we put  away  each pay  period, pre-fund  these                                                                    
     benefits  as  they  are   earned,  doesn't  exceed  the                                                                    
     defined contribution.  So our pre-funding  systems will                                                                    
     be equal  no matter which system  our employees choose.                                                                    
     Mr.  Chairman,   you  alluded   to  the   forth  coming                                                                    
     analysis, the  department has worked very  closely with                                                                    
     our office, we understand  that they are beginning work                                                                    
     on analysis  and will work with  us on the bill  and we                                                                    
     appreciate their  willingness to  get that  rolling and                                                                    
     work with the sponsor.                                                                                                     
CHAIR BISHOP  expressed that  he looks  forward to  reviewing the                                                               
numbers to  see if the  state really  can save money  because the                                                               
Legislature needs to look at  all ways to save revenue regardless                                                               
of economic conditions due to oil prices.                                                                                       
4:41:10 PM                                                                                                                    
AARON DANIELSON, President,  Public Safety Employees Association,                                                               
Fairbanks, Alaska, remarked that the  value of experience is what                                                               
Alaska  is  losing with  having  the  current  Tier IV  plan.  He                                                               
disclosed that  many police  and fire  officers have  left Alaska                                                               
because the state cannot keep up with Lower 48 offerings.                                                                       
4:43:10 PM                                                                                                                    
JACOB  BERA,  member,  Region VI  Board  of  Directors,  National                                                               
Education Association-Alaska,  Chugiak, Alaska, said SB  88 would                                                               
greatly  improve the  current  public  employee retirement  plan,                                                               
improve  teacher quality  and retention,  and save  the State  of                                                               
Alaska money.  He noted  that according  to statistics  from Buck                                                               
Consultants, Alaska has hired 3,037  teachers since 2006, by 2012                                                               
only 632  of those  teachers have  stayed in  Alaska more  than 5                                                               
years; this  has led  to more cost  in recruitment  and training,                                                               
leading  to the  revolving door  in the  classroom that  does not                                                               
contribute positively  to educational  outcomes for  students. He                                                               
set forth that  SB 88 creates a choice-pension  system that helps                                                               
attract and  retain quality and  effective teachers for  the long                                                               
haul,  especially in  specialized, high  need areas  in education                                                               
and  for  rural Alaska.  He  disclosed  that according  to  state                                                               
actuaries, new  healthcare costs safeguards and  smaller employer                                                               
contributions, SB 88 would save $70 million over 10 years.                                                                      
4:46:40 PM                                                                                                                    
PEGGY   COWAN,  Superintendent,   North   Slope  Borough   School                                                               
District, Barrow, Alaska, stated that  she supports SB 88 for the                                                               
same reasons that she supports SB  79. She noted that SB 88 gives                                                               
options,   especially  in   recruiting   the  "millennial"   aged                                                               
workforce.  She  summarized  that  defined  benefits  do  make  a                                                               
difference for  attracting long term  teachers and  asserted that                                                               
retention is good for Alaska's students.                                                                                        
4:47:46 PM                                                                                                                    
CHAIR BISHOP announced  that public testimony is  closed. He said                                                               
SB 88 will be held in committee.                                                                                                
4:48:27 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Bishop adjourned the Senate Community and Regional Affairs                                                                
Standing Committee hearing at 4:48 p.m.                                                                                         

Document Name Date/Time Subjects
SB 88.PDF SCRA 4/9/2015 3:30:00 PM
SB 88
SB 88 Sponsor Statement.pdf SCRA 4/9/2015 3:30:00 PM
SB 88
SB 88 Sectional 2015-04-02.pdf SCRA 4/9/2015 3:30:00 PM
SB 88
SB 88 Hearing req CRA 2015-04-02 Letterhead.pdf SCRA 4/9/2015 3:30:00 PM
SB 88
CSHB 146 version H.pdf SCRA 4/9/2015 3:30:00 PM
HB 146
CSHB 146 version H Resolution.pdf SCRA 4/9/2015 3:30:00 PM
HB 146
SB 79 Dr. Paramo Support.pdf SCRA 4/9/2015 3:30:00 PM
SB 79
SB 79 Legislation.pdf SCRA 4/9/2015 3:30:00 PM
SB 79
SB 79 Support Email.pdf SCRA 4/9/2015 3:30:00 PM
SB 79
CS for SB 79 Legislation.pdf SCRA 4/9/2015 3:30:00 PM
SB 79
CS for SB 79 (EDC) Sponsor Statement.pdf SCRA 4/9/2015 3:30:00 PM
SB 79
CS for SB 79 (EDC) Changes.pdf SCRA 4/9/2015 3:30:00 PM
SB 79
CS for SB 79 (EDC) Legislation.pdf SCRA 4/9/2015 3:30:00 PM
SB 79
SB 79 Superintendent Turnover.pdf SCRA 4/9/2015 3:30:00 PM
SB 79
CS for SB 79 (EDC) Sectional Analysis.pdf SCRA 4/9/2015 3:30:00 PM
SB 79
CSHB 146 Fiscal Note.pdf SCRA 4/9/2015 3:30:00 PM
HB 146
CSSB 79 Fiscal Note.pdf SCRA 4/9/2015 3:30:00 PM
SB 79