Legislature(2021 - 2022)BUTROVICH 205
03/22/2021 09:00 AM Senate EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| SB10 | |
| SB80 | |
| SB6 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 72 | TELECONFERENCED | |
| += | SB 20 | TELECONFERENCED | |
| += | SB 80 | TELECONFERENCED | |
| += | SB 10 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 6 | TELECONFERENCED | |
SB 6-RIP FOR PUBLIC EMPLOYEES/TEACHERS
9:29:45 AM
CHAIR HOLLAND reconvened the meeting and announced the
consideration of SENATE BILL NO. 6 "An Act relating to
retirement incentives for members of the defined benefit
retirement plan of the teachers' retirement system and the
defined benefit retirement plan of the Public Employees'
Retirement System of Alaska; and providing for an effective
date."
He noted that there was a work draft committee substitute (CS)
and solicited a motion.
9:30:07 AM
SENATOR HUGHES moved to adopt the work draft CS for SB 6, work
order 32-LS0028\B, as the working document.
9:30:20 AM
CHAIR HOLLAND objected for purposes of discussion.
9:30:24 AM
ED KING, Staff, Senator Roger Holland, Alaska State Legislature,
noted two changes in the committee substitute.
Change #1:
To address the concern regarding losing teachers
in districts already facing teacher shortages,
language was added to direct the commissioner of
administration to deny an application by a
teacher if doing so would create undue hardship
for the school district. The change is in section
2, subsection (b), which appears on page 2, lines
14-15 of version B.
Change #2:
To acknowledge the fact that there may be
financial benefits even in situations that do not
result is a permanent reduction to positions, the
last line of the intent language was deleted.
MR. KING noted that Senator Micciche expressed concern that
allowing teachers to retire in school districts that already
have recruitment and retention problems might be problematic, so
language was added to attempt to address that.
9:31:26 AM
CHAIR HOLLAND removed his objection. There being no further
objection, version B was adopted. He invited bill sponsor
Senator Kawasaki to address the committee.
9:31:41 AM
SENATOR SCOTT KAWASAKI, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 6, thanked the committee for bringing the
bill forward. He said retirement incentive programs have been
used since the '80s in both the private and public sectors. In
Alaska, RIP bills were used in '86, '89, and '96. A bill in 2004
did something similar to what SB 6 proposes. The cost savings
are tremendous. In '86 the estimated savings was over $25
million in year one. According to Legislative Audit, the '89
retirement incentive program demonstrated $23 million in
savings, representing 1,700 employees. In '96, the fiscal note
for an identical bill showed a $41 million savings in year one.
He said this is a time to find savings and prevent layoffs, and
SB 6 does that.
SENATOR HOLLAND invited John Holst, the Sitka superintendent, to
testify.
9:33:40 AM
JOHN HOLST, Superintendent, Sitka School District, Sitka,
Alaska, said that he has read through the bill several times. It
is similar to bills in the past, but it seems unduly
complicated. Sitka is in the middle of a reduction and is
offering a bonus of $10,000 that is not connected to the Teacher
Retirement System (TRS). Four teachers are going to take
advantage of that. It is a simple and straightforward thing for
Sitka. The bill could allow for more local control if the
legislature instructed TRS to count any bonuses as earned
income. Right now, a bonus the district offers is outside of TRS
and does not qualify as earned income. That one change would
help Sitka immensely. People always want to know if a bonus will
count for retirement. The intent of this bill is aimed at the
right target. In the past these bills were related to a
significant downturn in population and as such allowed removal
of positions in an orderly fashion. The current situation is the
need for pruning budgets and making reductions in positions. In
most situations, the people taking the bonus will have to be
replaced. Inside the bill, in at least once case, it says the
position cannot be filled and must remain vacant.
CHAIR HOLLAND clarified that Mr. Holst is invited testimony.
9:37:43 AM
SENATOR BEGICH pointed out that the bill says the retirement
incentive program is not mandated, it is a "may." Sitka has the
wherewithal to go beyond this retirement program, so it is doing
so. The bill is provided as a tool to give guidance to districts
that cannot offer a substantial bonus. The bill will have no
material effect on Sitka if it chooses not to enter this
particular state retirement incentive program.
SENATOR BEGICH described the following as a critical component
of the bill: "RETIREMENT INCENTIVE PROGRAM (a) An employer
including a state agency, a political subdivision of the state,
a public organization, and the University of Alaska may elect to
adopt a retirement incentive program under this Act." It is not
designed to negatively impact the Sitka School District. It is
designed to provide a tool for those districts that don't have
the tax base or wherewithal that Sitka enjoys. There are "shall"
retirement incentive programs that are dangerous for local
jurisdictions that he would never support. This is not one of
those.
9:39:35 AM
MR. HOLST said he understands this is voluntary. Whenever
teachers want to tack on three years to their service in order
to retire and get a larger benefit, the pressure will be on the
district to participate. If it is a year of negotiation with the
teacher union, it will be on the table for discussion and may be
part of the agreement. There are significant financial impacts
on districts. The intent is wonderful, but it is unduly
complicated and going to create problems for local districts. He
understands it is a choice to participate, but the pressure will
come from teachers and their unions to force districts to
participate.
SENATOR HUGHES questioned the need for the bill if a district
can choose to participate and structure the program in a way
that works for the particular district.
9:41:33 AM
SENATOR KAWASAKI answered that it seems that Sitka is offering a
one-time $10,000 payment to retire. By contrast, the school
district in Fairbanks has a $25 million deficit next year and
there may be 200 layoffs throughout the system, from custodial
staff to certified teachers. Fairbanks does not have the cash to
pay an incentive to retire.
SENATOR HUGHES asked, should become law, if the Sitka
superintendent could continue to offer a monetary incentive to
retire or if that district would have to follow the process
structured in the bill.
SENATOR KAWASAKI answered that nothing prevents a school
district from offering a signing bonus or retirement incentive.
SB 6 codifies the retirement incentive program for school
districts, the university, and state service. It includes
everyone in the TRS or PERS (Public Employee Retirement System).
SENATOR HUGHES recalled that either last year or the year
before, Senator Micciche introduced a bill to rehire retired
teachers. She asked how that law would mesh with SB 6 and if it
had a two-year wait period like SB 6.
SENATOR KAWASAKI responded that the retiree rehire bill, which
was Senate Bill 185, passed the Senate 19-1. Its conditions are
different from SB 6. A retired educator can be rehired if they
have been retired for at least six months and are 62 years of
age or younger. If older than age 62, they have to wait for 60
days. If people want to retire with the retirement incentive
program in SB 6, they would be under a different part of law
than the retire rehire system. He deferred to Mr. Hayes to
discuss the particulars.
9:45:02 AM
JOE HAYES, Staff, Senator Scott Kawasaki, Alaska State
Legislature, explained that under SB 6, the district can bring
educators back under contract or as substitute teachers, but
they cannot come back under TRS.
SENATOR HUGHES recalled that under Senator Micciche's bill,
retired educators cannot return under TRS. She noted the
different waiting periods for the two bills and asked, since
there is a teacher shortage, if it would make more sense to
bring the early retired teachers back in six months rather than
two years.
SENATOR KAWASAKI advised that under Senator Micciche's bill,
retirees have to come back under TRS and school districts will
be required to pay 12.56 percent of base salary to TRS.
CHAIR HOLLAND noted that the next committee of referral is Labor
and Commerce and then Finance. The committee has resolved the
education aspect of the bill. There will be time for additional
discussion.
SENATOR HUGHES asked the sponsor to entertain the idea of
shortening the waiting period for teachers because the problem
is not going to go away, especially in rural communities.
9:47:56 AM
CHAIR HOLLAND opened public testimony on SB 6; finding none, he
public testimony. He solicited a motion.
9:48:22 AM
SENATOR HUGHES moved to report the work draft CS for SB 6, work
order 32-LS0028\B, from committee with individual
recommendations and attached fiscal note(s).
CHAIR HOLLAND found no objection and CSSB 6(EDC) was reported
from the Senate Education Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSSB6 ver. B.pdf |
SEDC 3/22/2021 9:00:00 AM |
SB 6 |
| SB 80 version B.pdf |
SEDC 3/22/2021 9:00:00 AM |
SB 80 |
| SB 10 Committee Substitute (SEDC).pdf |
SEDC 3/22/2021 9:00:00 AM |
SB 10 |
| SB 80 Explanation of Changes in version B.pdf |
SEDC 3/22/2021 9:00:00 AM |
SB 80 |
| SB 6 Explanation of Changes in version B.pdf |
SEDC 3/22/2021 9:00:00 AM |
SB 6 |
| SB 10 Explanation of Changes in version G.pdf |
SEDC 3/22/2021 9:00:00 AM |
SB 10 |