Legislature(2017 - 2018)GRUENBERG 120
02/08/2018 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HCR2 | |
| HB168 | |
| HCR10 | |
| HB224 | |
| HJR31 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HJR 31 | TELECONFERENCED | |
| += | HCR 2 | TELECONFERENCED | |
| += | HB 224 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 168 | TELECONFERENCED | |
| += | HCR 10 | TELECONFERENCED | |
HB 224-REEMPLOYMENT OF RETIRED TEACHERS & ADMIN
3:42:21 PM
CHAIR KREISS-TOMKINS announced that the next order of business
would be HOUSE BILL NO. 224, "An Act relating to reemployment of
persons who retire under the teachers' retirement system."
3:43:03 PM
REPRESENTATIVE JENNIFER JOHNSTON, Alaska State Legislature,
relayed that HB 224 is an act relating to reemployment of
persons retired under the Teachers' Retirement System (TRS).
3:43:23 PM
LIZ REXFORD, Staff, Representative Jennifer Johnston, Alaska
State Legislature, on behalf of Representative Johnston, prime
sponsor of HB 224, relayed that the proposed legislation would
reinstate the retire rehire provision adopted in 2005 under
House Bill 161 [during the Twenty-Fourth Alaska State
Legislature, 2005-2006], which had a sunset date of 2009. She
stated that Alaska is experiencing a severe shortage of
teachers, specialists, and administrators in its school
districts throughout every region of Alaska. Attracting and
retaining quality teachers has become a critical issue facing
school districts as they work to improve education in Alaska's
public schools.
MS. REXFORD relayed that the proposed legislation would give
school districts the flexibility to rehire a retired teacher; it
would expand the pool of qualified teachers to temporarily fill
a position until a permanent teacher can be hired. She said
that currently school districts are struggling to fill vacant
positions with qualified teachers, sometimes relying on long-
term substitutes and other replacements. The proposed
legislation would provide another tool for school districts to
address this problem in the short-term, while long-term
solutions continue to be considered.
3:44:50 PM
REPRESENTATIVE JOHNSON commented that the proposed legislation
is practical and sorely needed.
3:45:21 PM
LISA PARADY, Executive Director, Alaska Council of School
Administrators (ACSA), testified that she represents Alaska
superintendents, elementary school principals, secondary school
principals, school business officials, and other school
administrators. She mentioned that her testimony has the full
support of Norm Wooten [Executive Director, Association of
Alaska School Boards (AASB)] and noted that AASB has offered two
resolutions from its membership in support of the proposed
legislation. She stated that ACSA strongly supports HB 224 as
one tool that could help school districts at a time in which
they need immediate assistance to attract leadership talent to
the education profession. She maintained that ACSA recognizes
that this is not "a silver bullet" but could provide some
relief.
MS. PARADY relayed that HB 224 would allow for the reemployment
of retired educators to help districts fill vacancies; it is a
necessary tool to help meet school district personnel needs both
in urban and rural districts. She thanked Kathy Lea, Chief
Pension Officer for the Division of Retirement and Benefits
(DRB), Department of Administration (DOA), with whom the
sponsor's staff has worked to ensure that what is proposed
complies with the U.S. Internal Revenue Service (IRS) Treasury
Regulations that are supported by the Department of
Administration (DOA). She mentioned that ACSA has also worked
with the National Education Association (NEA)-Alaska, which
supports the proposed legislation but has suggested two minor
changes: that the districts show that they have tried, but were
unable, to hire a qualified teacher; and that the contract be
for one year at a time. She said that both changes can be
easily incorporated into the proposed legislation.
MS. PARADY suggested that it is a rare opportunity when all the
education partners collaborate and ask for legislative
assistance. She maintained that the issue is a basic "supply
and demand" issue, and the legislation is vital because the
shortage is critical. She said that ACSA members make the
hiring decisions in each district and deal directly with the
increasing difficulty of doing so currently. She referred to
the letters from districts, included in the committee packet.
She pointed out the "2018 Joint Position Statements" from the
organizations she represents, included in the committee packet,
and emphasized that members are very focused on preparing,
attracting, and retaining qualified educators and specifically
looking at areas of innovation and alternative pathways to
attracting teaching and leadership talent. She stated that
every one of ACSA's members voted to explore the retire rehire
provision.
3:49:12 PM
MS. PARADY relayed that Alaska reflects the national shortage of
teachers and educators but has even greater struggles due to its
remoteness coupled with its loss of competitiveness. She
continued by saying that against the backdrop of the national
educator shortage, Alaska's retirement system and wages for an
Alaska cost of living (COL) does not draw teachers from the
Lower 48 as it once did. She said that Alaska recruits most of
its teachers from the Lower 48; therefore, Alaska's problem is
worse. She mentioned that in the past, the Alaska Teacher
Placement (ATP) Job Fair held every year in Anchorage would
attract hundreds of educators from across the country; at last
year's ATP Job Fair, there were more hiring personnel than
applicants. There were 211 registrants with 172 of them from
Alaska and 39 from out of state. She reported that there were
36 districts represented at the job fair.
MS. PARADY offered the following statistics: In the 2016-2017
school year, 24 percent of districts had a new superintendent;
from 2013-2017, 72 percent of districts experienced at least one
change of superintendent during the five years. There are about
400 school principals in the state; in the 2016-2017 school
year, 26 percent of principals were new to their schools. In
the 2016-2017 school year, there were 8,010 teachers; 22 percent
were new to their schools.
3:51:40 PM
MS. PARADY delivered statistics on educator retention, as
follows: the average retention rate for teachers in Alaska
schools was 72 percent; in urban areas - Anchorage, Fairbanks,
and Juneau - the average retention rate was 83 percent; in
urban fringe areas, such as Palmer and Sitka, the average
retention rate was 76 percent; in the rural fringe, such as
Healy and Bethel, the average retention rate was 71 percent; and
in rural remote Alaska, such as Arctic Village and Yakatat, with
72 percent of the schools in the state, the average retention
rate was 57 percent. Retention is an issue in all areas of
Alaska; the remote schools, where it is the most difficult to
attract teachers, are where Alaska has its most severe retention
problems. She mentioned the letter from Deena Bishop, Ed.D.,
superintendent of the Anchorage School District, included in the
committee packet, sharing the importance of the proposed
legislation to her school district.
MS. PARADY concluded by referring to the testimony of James
Johnsen, PhD, President, University of Alaska (UA) during the
2/7/18 Joint Meeting of the House Education Standing Committee
and the Senate Education Standing Committee, because UA
recognizes this as an emergent issue and is taking specific
action to work with the school districts to create more teachers
in Alaska; he set an ambition goal of preparing 90 percent of
the annual hired teachers by 2025. Ms. Parady offered that ACSA
supports this goal, but Alaska needs the educators now, and it
will take time for Alaska to "grow its own."
MS. PARADY relayed that the most pressing issue is unfilled
vacancies at the start of the school year. She maintained that
the direct intent of the proposed legislation to help districts
that have advertised positions but are unable to fill them. She
directed the committee's attention to the document from the UA
Alaska Teacher Placement (ATP) website, included in the
committee packet, and pointed out that as of 2/7/18, there were
486 openings. She mentioned that last December, ACSA worked
with UA on an emergency special education support piece, because
Alaska had 93 vacancies in special education. She pointed out
the category, "Student Support Services," which is further
broken down to clarify the need for special education support
personnel.
3:54:44 PM
MS. PARADY stated that the [ATP] Job Bank is a "live" system on
the website; as Alaska moves into recruitment season in the next
couple months, about 800 positions will be posted. She relayed
that an individual can retire in any other state in the country,
come to Alaska, and be employed as a teacher; however, Alaska's
retired educators, who committed their careers to Alaska's
children, are currently blocked from doing the same.
MS. PARADY relayed that House Bill 161 sunset in 2009. The DOA
provided a summary of the program, as follows: In the years
2001-2010, total utilization was 325 retired rehired
individuals; average time reemployed was 18.7 months; the
shortest period of reemployment was 3 months; the longest period
of reemployment was 46 months. The employer employing the
largest number of rehires was the Lower Kuskokwim School
District (LKSD), which is the largest rural district, and the
highest number employed in one year was 181. The highest use
[of the program] was by teachers with 149 teachers rehired; 45
special education teachers were rehired; 18 superintendents were
rehired; and 22 principals were rehired.
MS. PARADAY emphasized, "This isn't opening the floodgates, this
is targeting specific positions that we are not able to fill
with potentially a retired teacher who might be in the
community, who might be willing to come in and do a one year
contract, and preserve that quality in the classroom, which I
think we're all really focused on." She concluded by saying
that the proposed legislation may help to alleviate some of the
pressure felt by districts in recruiting teachers, particularly
in high poverty and rural areas. Alaska's students benefit by
experienced leadership, experienced Alaska teachers, and
educators working with new teachers to achieve a comprehensive
learning program for all Alaska students. She asked for
committee support of HB 224.
3:57:12 PM
REPRESENTATIVE LEDOUX asked whether Alaska passed a law
forbidding teachers from being rehired.
MS. PARADY replied that Alaska has a prohibition for a rehired
retired person working for the state more than .49 of a day.
REPRESENTATIVE LEDOUX asked for the rationale of the
prohibition.
3:58:29 PM
KATHY LEA, Chief Pension Officer, Division of Retirement and
Benefits (DRB), Department of Administration (DOA), responded
that there is a statute prohibiting a retired member from coming
back into fulltime service or part-time service over 50 percent
of the normal work week; the statute is AS 14.25.043. She
explained that it is a standard provision in retirement plans
that once a person initiates his/her retirement benefit, he/she
does not work and receive an active salary from an employer in
the same plan from which the person retired.
REPRESENTATIVE LEDOUX asked, "Besides it being standard, why do
we do it?" She asked for when the statute was enacted and the
rationale behind it.
MS. LEA replied that the statute has been in existence since the
1950s and is due to the perception of "double-dipping." She
stated that for someone who has earned a retirement but is still
working, there are IRS rules that require a bona fide
termination of employment before coming back to work for the
same employer. She relayed that mostly the reason is to protect
the retirement plan. If you have provisions for retirees to
come back into service, then there is a potential for
contribution to that plan to be lost; it precludes new enrollees
in the plan who would be paying contributions. She maintained
that in the proposed legislation, contributions would be
required; therefore, the plan would be kept whole.
4:01:12 PM
REPRESENTATIVE LEDOUX pointed out the lack of a fiscal note and
asked whether the proposed legislation would have no fiscal
impact on the state.
MS. LEA answered that there is no fiscal note at this time
because it has not been ordered by the House and Senate
leadership; she conceded that a fiscal analysis is needed. The
proposed legislation would require the employer to pay the
employer contributions for the rehires and to offer active
employee health insurance. She maintained that these are the
two areas that would create cost. She stated that she did not
know what the fiscal note would be but offered that there are
elements in the proposed legislation addressing those cost
concerns.
REPRESENTATIVE LEDOUX asked for clarification that fiscal notes
are not prepared unless requested by the leadership of the House
or Senate.
MS. LEA said that this procedure has been in effect for a couple
years; the reason is that the actuarial analysis is very costly;
it cannot be paid from the [retirement] trusts but must be paid
from the general fund (GF). She relayed that DRB gets a GF
budget every year, which is managed by the House and Senate
leadership.
4:03:06 PM
The committee took a brief at-ease at 4:03 p.m.
4:03:42 PM
CHAIR KREISS-TOMKINS directed the committee's attention to the
fiscal note, included in the committee packet.
4:03:58 PM
REPRESENTATIVE BIRCH referred to the forthcoming committee
substitute (CS) for HB 224 [labeled 30-LS0759\J, Wayne, 2/6/18],
included in the committee packet, and cited page 1, lines 12-14,
which read in part: "certifies that the member and the school
district did not arrange before the member retired from the
school district for the member to be reemployed by the school
district". He asked whether the provision has a basis in the
plan.
MS. LEA replied that the provision is a requirement of IRS to
prevent what is referred to as an "in-service distribution."
She said that IRS want to ensure that when a person draws
his/her retirement benefit, that person has had a bona fide
termination of employment.
REPRESENTATIVE BIRCH asked whether the proposed legislation
would impact the current Public Employees' Retirement System
(PERS)/TRS liability.
MS. LEA clarified her answer to Representative LeDoux's question
by saying that there is a fiscal note on HB 224 but not an
actuarial analysis. She stated that it is the actuarial
analysis which needs to be ordered by the leadership of the
House or Senate. She explained that until that analysis is
performed, the impact on the [retirement plan] fund is unknown.
She added that the analyses are performed by DRB's consulting
actuary, Conduent Inc. She said that once DRB gets an order for
a fiscal analysis, Conduent Inc. will perform the analysis to
determine the future impact of the proposed legislation on the
fund.
4:06:39 PM
REPRESENTATIVE BIRCH offered that typically there is a
requirement for union membership and dues for hires and asked if
that would apply to rehires.
MS. LEA stated that the question was outside of her purview.
4:07:23 PM
REPRESENTATIVE KNOPP suggested that double dipping might be the
reason behind the IRS provision. He relayed his experience with
local government; some administrative positions were exempted
from PERS to allow people to retire and still receive paychecks
as employees. He relayed that under the proposed legislation,
the school district would be required to make PERS contributions
for the temporary rehire, but that person would no longer be
eligible for additional benefits under PERS. He suggested that
the result of this would be a net gain for the retirement
system.
MS. LEA responded that there would not necessarily be a net gain
because if there had been a permanent teacher hired in that
position, those contributions would have been made as well. She
relayed that it is more of "a wash."
REPRESENTATIVE KNOPP offered that with a permanent hire, those
contributions would be distributed in the future, but for a
temporary rehire, they would not be distributed, therefore,
would constitute a net gain to the system.
MS. LEA replied that it would be a de minimis amount.
4:09:20 PM
ANNMARIE O'BRIEN, PhD, Superintendent, Northwest Arctic Borough
School District (NWABSD), testified that there are 2,136
students in 12 schools in the 11 villages in the district; none
of the villages are accessible by road; and supplies are
delivered via air carrier. She relayed that she has been
employed by NWABSD for 18 years - 6 as director of curriculum
and instruction, 8 as assistant superintendent, and she is in
her fourth year as superintendent. She stated that she urges
legislators to pass HB 224. She declared that rural Alaska,
especially Western Alaska, is in a crisis due to the shortage of
qualified staff to teach its students; for the first time in her
years at NWABSD, school opened without full staffing. As the
district recruits for the 2018-2019 school year, the situation
is predicted to be worse. She offered that as parents and
grandparents, legislators would find this situation
unacceptable.
DR. O'BRIEN relayed that the UA System graduates a fraction of
the teachers needed to fill open positions throughout the state.
The in-state candidates are in high demand and mainly seek
positions on the road system; this further decreases the number
of candidates for rural Alaska. She said that as a result, her
district recruits in the Lower 48 at great expense. She offered
that with the entire country facing a teacher shortage, her
district must continually seek out new areas in which to
recruit. She relayed that Utah, for example, no longer allows
out-of-state recruiters to attend its major education career
fairs. Other states, such as Montana, allow in-state recruiters
to speak with their candidates first to gently discourage out-
of-state recruiting.
DR. O'BRIEN stated that in an environment of ever-shrinking
resources, her district is asking for assistance. She said that
the district is taking advantage of the technology available to
grow and expand its programs; it is trying to use staffing as
effectively as possible during this time of teacher shortage.
Using a video teleconferencing system, the district has been
able to offer electives to remote sites that do not have the
staff to support the additional courses. Currently in the
district, there are eight sites and 61 students taking these
classes. She added that there are three students from two
villages outside the school district who are involved in
Introduction to Education I, along with the students. The
education focus is the result of an active Educators Rising
program. She said that currently there are 14 students enrolled
in internships in four of the district's schools. This class
uses Canvas [Learning Management System (LMS)] as a lesson
management platform. There are 35 students enrolled in the
Introduction to Education I course this year; the course is only
offered via Bellingham Technical College (BTC) and is available
to all district sites. She maintained that the district is
doing its best to grow its own and offer its support; these are
dual credit classes.
DR. O'BRIEN relayed that the district also maintains a 40-bed
high school dormitory available to 11th and 12th grade students,
locally and statewide. She said that NWABSD houses both
fulltime students and students who come to Kotzebue for the
variable length programs. These programs, offered through the
magnet school, are designed to introduce students to careers in
health care, education, process technology, and culinary arts.
This efficiently allows the district to fill the need for
classes in these areas by offering them to students in schools
outside of Kotzebue that do not have the staffing or students to
make these courses viable. She said that NWABSD maintains
quality instruction by offering its distance delivery and magnet
school boarding program; she maintained that it is not enough.
4:13:34 PM
DR. O'BRIEN offered that HB 224 would favorably impact district
finances by reducing costs associated with recruitment efforts
in the Lower 48 and would favorably impact students by having
fulltime temporary teachers for their classes. She urged all
legislators to assist school districts struggling with
maintaining qualified staff for students in rural Alaska; she
asked for passage of HB 224.
4:14:52 PM
CHAIR KREISS-TOMKINS announced that HB 224 would be held over.