Legislature(2003 - 2004)
02/06/2003 08:01 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 20 - REEMPLOYMENT OF RETIRED TEACHERS Number 0039 CHAIR WEYHRAUCH announced that the first order of business was HOUSE BILL NO. 20, "An Act relating to reemployment of and benefits for retired teachers and principals, including those who participated in retirement incentive programs, and to the employment as teachers of members of the public employees' retirement system who participated in a retirement incentive program; and providing for an effective date." Number 00074 REPRESENTATIVE STEVENS, Alaska State Legislature, as sponsor of HB 20, told the committee that he thinks [the proposed legislation] is important. He said that when he was president of the school board in Kodiak, Alaska, and that [board] considered the Retirement Incentive Program (RIP), it chose to allow its teachers to retire early. Representative Stevens noted that by using the RIP, retiring teachers could receive an additional three years' [credit towards] their retirement. He said, "I'm not sure it was a wise idea because, in fact, we lost some very fine teachers who decided to leave." REPRESENTATIVE STEVENS stated that he personally knows of cases where teachers wanted to come back to teach, "after going elsewhere," and it was "quite a costly matter for them to pay back the money they had received." He said he has seen teachers who have taught 20 years in Alaska go to Oregon or Washington to teach, for example, where their experience and qualifications are welcomed. REPRESENTATIVE STEVENS continued as follows: We put ourselves in a situation where ... it is very difficult to hire those people back, even though our districts may want them. What this bill would do is ... give the school districts that option. It's not a requirement - it doesn't force the school districts to do anything we don't want to do - it just gives them that option. REPRESENTATIVE STEVENS noted that if [a school district] has a vacancy and needs a particular teacher experienced in a particular field, it can hire back that person. Furthermore, it can make it's own decision regarding salary schedule, for example. Number 0265 REPRESENTATIVE STEVENS specified that HB 20 would allow the reemployment of retired teachers and principals who took part in a RIP, as well as those teachers who are members of the Public Employees' Retirement System (PERS) who took part in a RIP a few years ago. He reminded the committee that there is currently a shortage of teachers and principals, not only in Alaska, but throughout the [United States] - a problem which will continue to get worse. He noted that two years ago, the Twenty-Second Alaska State Legislature passed a bill allowing the rehiring of retired teachers; however, that bill excluded those who had taken part in a RIP. Number 0371 REPRESENTATIVE STEVENS said that additionally, [HB 20] would allow the Department of Education to hire "RIP" teachers in the various schools that it controls, such as the Alyeska Central School, Mt. Edgecumbe, the Alaska State School for the Deaf and Hard of Hearing, and the Alaska Vocational Technical Center. Representative Stevens, based upon his personal experience, expressed that the most important factor in early education is having an excellent teacher. [The proposed legislation] is another tool to use in "getting to that point." REPRESENTATIVE STEVENS noted that HB 416, a similar bill, passed through the House last year, but did not make it through the Senate because of time [issues]. He indicated a letter from the Association of Alaska School Boards and an email from a former teacher [included in the committee packet] supporting [HB 20]. Number 0455 REPRESENTATIVE STEVENS asked the committee to consider two amendments. Amendment 1 read as follows [original punctuation provided]: 1 Page 1, line 9: After "teach", Insert "or work", After "particular" Insert "education". 2 Page 1, line 10: Delete "by resolution". 3 Page 1, line 11: After "teach", Insert: "or work". Amendment 2 read as follows [original punctuation provided]: 1. Page 2, lines 16-20. Instead of deleting the last sentence in section 2. Change it to read: A member who participated in a retirement incentive program under ch 26, SLA 1986; ch 89, SLA 1989, ch 4, FSSLA 1996; or ch 92, SLA 1997, who makes [IS NOT ELIGIBLE TO MAKE] an election under this subsection will not lose the incentive credit provided under the applicable retirement incentive plan and is not subject to any related reemployment indebtedness. CHAIR WEYHRAUCH read the first line of HB 20 and asked Representative Stevens a question regarding the inclusion of the word "principals". REPRESENTATIVE STEVENS answered that [including the word "principals"] is equally important. In response to a follow-up question by Chair Weyhrauch, he clarified that [the proposed legislation] would only apply to those people in the Teachers' Retirement System (TRS). CHAIR WEYHRAUCH asked why it is necessary to pass a bill in order for teachers to be rehired. REPRESENTATIVE STEVENS explained that current statutes require that if a teacher who has "RIPed" [is rehired], he/she must repay the amount of money that was received. He added that "this" might be a good opportunity to get that money back by allowing those returning teachers to teach for three to four years, at which point they would be "back where they would have been if they had stayed anyway." He said that he is hearing about teachers who retire from Alaska, are welcomed by other states to teach, and "would like to return to Alaska, but find they simply can't." He stated that he thinks [HB 20] would correct that. Number 0892 REPRESENTATIVE HOLM prefaced his statement by saying that his wife is a schoolteacher. He said he has a problem with the bill. In numerous cases, teachers have been given "great quantities of dollars" to retire early, he said, which gives them an "advantage of taxpayer dollars." He asked Representative Stevens why the people are not being required to return that money. He opined that it is inappropriate for the state to give financial incentives to urge employees [to retire], and then [rehire] those [past] employees without requiring them to pay the [incentive money] back. He asked how many teachers are involved and if all the teachers "out of the university system" have been hired. Number 1015 REPRESENTATIVE STEVENS explained that at the time when the retirement incentive was offered, there were many teachers at the high end of the salary scale. The teachers who replaced them eventually will become "higher end teachers" in time. He stated that he is not certain that it was a wise thing to do, but, on paper, it saved [the school districts] money. He said that he has heard people express that those [teachers who retired with the incentive program] should, perhaps, be punished for taking "gross advantage" of [the school district]; however, he stated that the truth of the matter is that those teachers are now needed. He said, "The districts are able to look at that and say, 'Well yeah, sure, they were very lucky at that time - they received an advantage.'" REPRESENTATIVE STEVENS stated his view that [Alaska] is allowing other states' districts to "have the advantage of our experienced teachers when, in fact, ... some of our districts would like to hire some of them back." He said that [if HB 20 is passed] the districts would be able to weigh the benefits of rehiring the aforementioned teachers versus hiring teachers at a lower [pay scale]. Number 1150 REPRESENTATIVE HOLM said that he has not been given evidence that would compel him to agree with [Representative Stevens]. He asked, "How many teachers are we talking about?" He opined that if [Alaska] is to make a significant difference in educational programming, or the ability to have enough teachers to teach its students properly, then [the number of teachers] needs to be significant. He reiterated that he has a problem with [teachers] being rehired without returning the money to the state that they got as a benefit [for retiring]. Number 1235 REPRESENTATIVE STEVENS responded that he does not know what those numbers are, if they even exist, or how they could be found. He said that he is not certain that he agrees that it has to be a significant number. He stated that he thinks [the legislature] should do all it can to offer the [school] districts options, and [HB 20] is an option. Number 1270 REPRESENTATIVE SEATON noted that the Kenai Peninsula Borough [School District] had a similar program. He recalled that it offered a flat $7,500 retirement incentive. Some of those teachers are still in the community, he added. He mentioned Kodiak and asked Representative Stevens to compare cases in regard to "reimbursement back to the district." REPRESENTATIVE STEVENS clarified that the RIP was part of TRS. He stated his understanding that it is separate from a decision by a local school district to offer an incentive on its own, for example. He recommended that Representative Seaton ask "the department people" his question. Number 1462 REPRESENTATIVE GRUENBERG referred to Amendment 2 [text provided previously]. He asked, "If we adopt Amendment 2, should we then delete Section 3 of the bill, because it would seem to be redundant?" Number 1505 GUY BELL, Director, Health Benefits Section, Division of Retirement & Benefits, Department of Administration, told the committee that Section 3 relates to PERS employees who participated in a RIP, then enter teaching as a profession under (indisc); therefore, [Section 3] is not redundant, but is specifically in reference to PERS. REPRESENTATIVE GRUENBERG asked how it is possible to have a zero fiscal note. MR. BELL reminded the committee that there were several RIPs. He said that when a RIP was implemented, it was up to the district and the teacher to pay the full actuarial cost of the RIP. He continued as follows: So, at the time that the RIP was approved, there was a cost - provided by the division, through our actuaries, to the school district - that had to be paid, and the school district and the teacher shared in that actuarial cost. The RIP penalty ... on returning is not based on the cost of returning that teacher to the system, but is effectively a penalty. MR. BELL stated that teachers who "took the RIP" understood that there was going to be a significant cost to them to return to teaching in Alaska. REPRESENTATIVE GRUENBERG asked if there would still be a penalty if HB 20 passes. MR. BELL answered that if the bill passes with the proposed amendments, there will be no penalty to returning [teachers]. In response to a question by Representative Gruenberg, he said that [the bill] would be "cost neutral"; it would have a zero fiscal note. CHAIR WEYHRAUCH asked Mr. Bell to address Representative Seaton's previously stated question. MR. BELL responded as follows: Unfortunately, I'm not an expert on ... each school district's collective bargaining agreement with the teachers' union, so it would really be dependent on the terms of the agreement between the district and its own employee units. REPRESENTATIVE SEATON asked Mr. Bell if he is aware of any [instance] when a district has allowed teachers to be hired, regardless of their years of service. MR. BELL answered that he is not aware of any, but reiterated that this is not his area of expertise. Number 1680 CHAIR WEYHRAUCH clarified as follows: So if the question is: "Can they rehire a teacher at any pay range, whether it's a beginning or exit level?" Under this program, we don't know - unless we go district by district - whether they would have to rehire them at the level they left, or the beginning level. MR. BELL answered, "I believe so, yes." Number 1701 REPRESENTATIVE SEATON stated that, having formerly been a teacher, he has not seen a situation where a district has had the opportunity to disregard people's time of service. He said there is a set pay scale in all the contracts he has ever seen. He stated that unless there is a specific amendment made to [HB 20] which requires that teachers be rehired at a lower pay rate, he thinks a situation may occur whereby teachers are rehired at the highest pay rate possible. He added that he is not even sure that [those teachers] might not even get credit for "the additional years of service, under periods that they were granted." He stated that his concern is that schools might actually incur high costs by [re]hiring teachers at the highest pay scale. He clarified that he is not totally opposed to the bill; however, he wants to see [language in it] that will make it economical. Number 1784 MR. BELL described the way "this return" works as follows: First, even by virtue of the RIP, the individual must have received a normal retirement benefit. Second, the school district declares a shortage in its particular area or discipline. Then, if it rehires a retiree, that retiree then "makes an election," which is to either continue receiving the retirement benefit and not accrue an additional retirement under a new salary, or to stop his/her retirement benefit and then continue accruing retirement credit. The return provision is the former, he said. He noted, "That's another way that we made this actuarially neutral; there's no additional cost to the system, and at the same time, neither the employer nor the employee - the teacher - is making contributions to the retirement system." He noted that, in effect, there is some savings to the school district, by virtue of their not contributing to the retirement system for that particular teacher. CHAIR WEYHRAUCH asked Mr. Bell to confirm that "the teacher coming back under this ... bill" would get no retirement benefits as part of their employment, but would have to set up his/her own individual retirement plan. MR. BELL replied, "In the case of a school district, it would be a 403(b), tax-deferred savings." He defined that as the opportunity [teachers] would have to make additional retirement savings, because they would not be contributing to the Teachers' Retirement System. CHAIR WEYHRAUCH asked whether there is anything to prohibit the district from reducing, by that margin, the amount of pay that teacher would receive through contract with that district. MR. BELL reiterated that that would be subject to the contract with the district. Number 1930 REPRESENTATIVE STEVENS told the committee he believes that, currently, teachers who retire "under normal retirement," with no RIP involved, can return to teaching and choose to remove themselves from that retirement system, no longer receive retirement pay, and accrue time in the system again. He reiterated that it is at the districts' discretion whether or not to rehire a teacher. He said, "There are several checks on this program, I believe." Number 1991 REPRESENTATIVE GRUENBERG referred to Section 3 [of the proposed bill]. He said that it refers to people who retired under PERS; therefore, the bill must [also] cover people who are not retired teachers, but who, technically, retire under PERS, as well as TRS. He asked Mr. Bell to confirm that. MR. BELL said, "Correct." REPRESENTATIVE GRUENBERG suggested, that being the case, page 1, line 11, should be amended to permit the employment of retired teachers and "other people," to conform with Section 3. MR. BELL said that he does not think [an amendment] is necessary. REPRESENTATIVE GRUENBERG interjected that it may not be necessary, but he wants to eliminate any questions for those interpreting [the language of the bill in the future]. MR. BELL explained that Section 1 relates only to people retired under TRS. He stated that the reason Section 3 has been added is because it makes specific reference to PERS retirees. He said, "Under the retirement center programs, both retired public employees are excluded or are subject to paying penalties if they return in PERS or in [TRS]." For example, he said, a retired fisheries biologist who gets a teaching certificate and teaches in a school district will be subject to paying the penalty if he/she is a RIP retiree. Number 2100 REPRESENTATIVE GRUENBERG suggested Conceptual Amendment 3, as follows: So, shouldn't we also say "retired teachers or public employees" or something like that, to cover the former retired biologist? A technical amendment to make sure we don't have a problem. MR. BELL replied, "It might help, but it wouldn't do any harm." In response to follow-up questions from Representative Gruenberg, he suggested that, on Page 1, Line 11, the words "public employees" be added after the words "retired teachers". He said he did not think it necessary to add the word "retired" before "public employees". CHAIR WEYHRAUCH asked if the language being discussed would change the entire nature of the bill. MR. BELL said, "If that amendment were to be adopted, I would suggest a consultation with [Legislative Legal and Research Services]." Number 2207 REPRESENTATIVE GRUENBERG said that he does not want to change the bill, but he wants to "make it conform." Number 2247 CHAIR WEYHRAUCH indicated Amendment 2. He referred to the RIPs in [the years 1986, 1989, 1996, and 1997]. He asked if those were the referenced RIP programs for teachers and principals. MR. BELL concurred. CHAIR WEYHRAUCH asked about the basic intent of creating a RIP and "wanting to get them back now." He stated that he agrees with Representative Stevens regarding retired teachers as a valuable resource that the state doesn't want to lose. He emphasized that he thinks it is critically important to the state to get teachers back out in the Bush to teach. Regarding the RIP, he asked what the public policy is that drives it and if it's in the state's overall interest. Number 2295 REPRESENTATIVE STEVENS said, in hindsight, "I'm sort of sorry that I was involved in that as the president of the school board." He qualified that there were immediate savings from replacing teachers at the high end of the salary scale with those at the low end; however, a few years later, the teachers hired [as replacements] are at the high end of the salary scale and many qualified teachers have been lost. Number 2360 CHAIR WEYHRAUCH mentioned an inspiring teacher from his past. He pointed to the zero fiscal note. He noted that the Alaska Association of School Boards is in favor of [HB 20]. He asked, "What is the relationship between this organization and individual school districts?" REPRESENTATIVE STEVENS answered that he hoped they would speak in favor of [HB 20]. Number 2420 REPRESENTATIVE HOLM stated his understanding that there are two issues involved. The first, he said, is regarding PERS and a question of "whether or not you ... have to return any incentive to retire." The second issue, he highlighted, is the [retirement] incentive given by the school boards to the teachers. Representative Holm cited an example of a person who received a $10,000 cash bonus [to retire from the Fairbanks School District], in addition to the retirement paid. The person is now in the Anchorage School District as a teacher. He reiterated that he has a problem with not requiring pay back of the monies received in regard to the RIP. Number 2535 MR. BELL noted that there are a number of school districts that offer incentive bonuses - generally through a collective bargaining process - that are completely separate from the retirement system. He clarified that the retirement system has no say over the awarding of those bonuses, and the law states nothing regarding people who subsequently return to another district after receiving a separation or a second bonus from another district. [Neither] the "rehired retirement" law [nor] the retirement incentive law have [any] connection at all with district-sponsored bonuses. He stated the following: So, I would suggest that that should be separated from this particular bill, because this bill has no impact - either positive or negative - on that particular type of situation. That would occur regardless of whether this bill passed or did not pass. This bill strictly relates to teachers who participated in the state-sponsored Retirement Incentive Program - TRS Retirement Incentive Program - those four that Representative Weyhrauch mentioned. Number 2602 REPRESENTATIVE STEVENS noted the importance of local control over education. Whatever the districts decide to do [in regard to offering bonuses] is beyond the purview of HB 20. He clarified that his previous statement that bonuses [in the RIP] were not a good idea was his own personal one. Number 2648 REPRESENTATIVE SEATON asked if the teachers that are rehired would immediately have tenure. He said, "If we're looking at a short-term need, and the highest paid individuals are people we bring back into the system, I'm wondering if we're stuck there for the long term and whether there's any impact here at all." REPRESENTATIVE STEVENS said that he retired after 25 years as a university professor, and he had tenure. He stated that he never thought that tenure was an important issue. He asked what difference it makes whether a teacher has tenure or not, if the school district has decided it needs that valuable teacher back [regardless of the money]. REPRESENTATIVE SEATON described a situation in which budget cuts might require a district to let go of its lower-paid teachers and retain the rehired, higher-paid teachers with tenure. He stated that his concern was that [the proposed] legislation might build a longer-term budgetary problem. REPRESENTATIVE STEVENS responded, "It might be an important issue to ask of the bargaining units." He added that it is an issue that would be controlled by the contracts with bargaining units. Number 2770 REPRESENTATIVE BERKOWITZ stated his belief that legislation has been passed in the last couple of years that allows people to be reemployed without, in essence, negating their seniority. Number 2796 CHAIR WEYHRAUCH asked the committee if there was any objection to Amendment 1 [text provided previously]. REPRESENTATIVE BERKOWITZ objected to point out that the deletion on [page 1, line 10] should also [delete] the commas. CHAIR WEYHRAUCH again asked whether there was any objection to Amendment 1. There being no objection, Amendment 1 was adopted. Number 2830 CHAIR WEYHRAUCH asked if there was any objection to Amendment 2 [text provided previously]. There being none, Amendment 2 was adopted. Number 2850 CHAIR WEYHRAUCH referred to Conceptual Amendment 3, a handwritten, photocopied amendment, which read as follows [original punctuation provided]: p 1 l 11 after "teachers" insert "or public employees [subject to technical correction by legal counsel] He asked if there was any objection to [Conceptual] Amendment 3. There being no objection, Conceptual Amendment 3 was adopted. CHAIR WEYHRAUCH asked the sponsor if he would like to comment on [Conceptual] Amendment 3. Number 2870 REPRESENTATIVE STEVENS concurred with the aforementioned comments of Mr. Bell, that [Amendment 3] is not necessary, but will do no harm. Number 2887 CHAIR WEYHRAUCH outlined the steps that would be taken to include the above three amendments in a committee substitute. Number 2910 ED McLAIN, Ph.D., Deputy Commissioner of Education, Office of the Commissioner, Department of Education and Early Development (EED), said that he recalls the legislation previously mentioned by Representative Berkowitz, although he does not remember the bill [number]. He urged the committee to consider [the content of] that legislation, which provided allowance for districts to negotiate "the number of years they would get." He said that would be consistent with "current policy - negotiated agreements." He said that districts vary in the amount of years allowed to be "brought in." He explained that that is probably why a person might leave one district to go to another and might not only receive retirement pay, but also might "get credited with 'X' number of years." TAPE 03-04, SIDE B Number 2996 DR. McLAIN stated that the issue, critical to savings, was heavily debated last year. DR. McLAIN noted that he has served as both assistant superintendent and superintendent in several districts throughout the state. Regarding bonuses, he said that some districts, for various reasons, did decide to offer incentives, which were separate from any state agreement. He added, "It had an impact in that that salary quite often raised the pay, which would raise the average, which increased the amount of retirement. But those were really outside of this bill and outside of the one that was passed last session or the session before." DR. McLAIN said that another component of [HB 20] is that it [would] allow "the department" to "take advantage of this program." He mentioned an amendment added in so that "our people and our teaching-learning support system would be able to participate." He added, "It's a critical division in our department." He explained that the people [in that division] are required to be "certificated," and they provide direct support services to teachers, schools, districts, and the administration, for example, regarding curriculum and instructional matters. Mr. McLain noted that the salary structure and the "twelve-month contract nature of that work" sometimes make it hard for [the department] to attract people. He urged the committee to consider "anything that we can do to open up that as a possibility, to make it more attractive." He said that [HB 20] would allow retired people to elect to work with "us," and that the state as a whole would benefit from their experience. He reiterated that there would be no cost to the state; there is a zero fiscal note. He demonstrated that point as follows: "The person, if they ... took the retirement and left - went down to Oregon - we're still paying out the retirement benefit. Now, we still pay out the retirement, but we also get the benefit of their expertise back with us." Number 2860 REPRESENTATIVE GRUENBERG stated that the amendment he had offered was designed to ensure that the employees who are non- teachers could be hired back. They would be former public employees who would be employed to work in the system. He said he thinks that it is important that "we make certain there is no question that they can be reemployed." DR. McLAIN responded to Representative Gruenberg as follows: "I appreciate the amendment that you offered, and I also hesitate, without legal counsel, on the exact wording." He said that he understood Representative Gruenberg's intent and that it would not cause the department any problems. He stated his understanding that Representative Gruenberg's proposed amendment would mean that a biologist, for example, who left employment, then gained a teaching certificate, could "come back in and take on the teaching." He clarified that he did not interpret Representative Gruenberg as saying that a person could leave "as a custodian and come back in as a custodian." REPRESENTATIVE GRUENBERG said that Mr. McLain had focused on Amendment 1 and the addition of the phrase, "or work". Since someone had asked to have that phrase added, he opined, "It sounds like there are people who are going to be brought back in, not just to teach, but to work." He asked if that was correct. Number 2770 DR. McLAIN clarified that Teaching and Learning Support is a particular division of EED. Those individuals [in it] are required to have teaching certification in order to do their job; they are required to have the background and skill set that would make them eligible for TRS. They are not PERS employees, he said. That is why the language [of the proposed legislation] was changed from "teach" to "work", because what they do is work with curriculum development and grant management, for example. He said that he would not have a problem with the addition of adding "PERS opportunities" to the proposed legislation. Number 2714 REPRESENTATIVE GRUENBERG said that it sounded as though the certification was the key issue. DR. McLAIN said yes. He listed some areas where certification is necessary. CHAIR WEYHRAUCH recognized Representative Crawford in the room. Number 2651 REPRESENTATIVE GRUENBERG clarified that the intent of his [proposed] amendment was not to expand, but to conform. He stated that his intent was to include only the people who Mr. McLain intends to include. Furthermore, [to that purpose], the bill must be carefully drafted. Number 2625 DR. McLAIN reiterated that he had understood that Representative Gruenberg had been bringing in the idea that someone retired under PERS might earn a teaching certificate and come back [to teach] as a second career. He said, "I think that's an exciting extension and builds into our statewide efforts on retention and recruitment, and to that degree, I thought it fit in well." REPRESENTATIVE GRUENBERG concurred that that had been his exact intent. DR. McLAIN noted that the state's university system only prepares about 30 percent of its teachers; there is a general teaching shortage in the state, which is acute in some areas and chronic in others. In the past 23 years, application files have decreased in size. He [encouraged] anything that can be done to attract and retain teachers. He stated that it's difficult to watch a teacher with twenty years of experience leave to teach in another state. He offered to make a report regarding teacher retention and recruitment available to the committee. Number 2529 CHAIR WEYHRAUCH suggested that Mr. McLain not limit the distribution to only the House State Affairs Standing Committee, because he said he thinks everyone in the legislature is concerned about the issue. He stated that "whatever your department can do" to provide incentives [to teachers], while implementing any cost-effective programs would be of benefit. In response to a comment by Mr. McLain, he clarified that there was a zero [fiscal] note to the state, but he wasn't sure about a cost to the district. DR. McLAIN said that the districts would have the option not to exercise [the proposed legislation] if it did not work out for them to do so. [HB 20 was heard and held.]
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