Legislature(2003 - 2004)
03/06/2003 01:40 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 06, 2003
1:40 P.M.
TAPE HFC 03 - 30, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 1:40 P.M.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
MEMBERS ABSENT
Representative Eric Croft
Representative Jim Whitaker
ALSO PRESENT
Senator Gary Stevens; Guy Bell, Director, Division of
Retirement and Benefits, Department of Administration; Kevin
Sweeney, Legislative Liaison, Department of Education and
Early Development; Pam Varni, Executive Director,
Legislative Affairs Agency.
PRESENT VIA TELECONFERENCE
John Malone, Alaska Mental Health Trust Board, Bethel.
SUMMARY
CONFIRMATION - JOHN MALONE
Alaska Mental Health Trust (AMHT)
PASSED - NO OBJECTION
CHANGE IN THE LONGEVITY POLICY
PASSED - NO OBJECTION
HB 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.
CS HB 20 (STA) was reported out of Committee with
a "do pass" recommendation and with fiscal note #1
by the Department of Administration dated 2/19/03.
CONFIRMATION of JOHN MALONE
Alaska Mental Health Trust (AMHT) Board
Co-Chair Williams pointed out that Committee members had
received copies of Mr. Malone's resume and stated that they
would vote on his confirmation to the Alaska Mental Health
Trust Board of Trustees. Co-Chair Williams indicated that
no one had come forward with objections regarding this
appointment.
Co-Chair Harris asked how many years had Mr. Malone been on
the AMHT Board of Trustees.
JOHN MALONE, (TESTIFIED VIA TELECONFERENCE), ALASKA MENTAL
HEALTH BOARD OF TRUSTEE, BETHEL, noted that he had been a
founding trustee member. In response to questions, Mr.
Malone advised that Board spending is a public program. If
the idea is that the board is a supporting public program,
then they should be doing their work. If the Board does not
deviate from that, the people of Alaska will continue to be
the beneficiaries.
Co-Chair Harris asked if it was Mr. Malone's philosophy that
AMHT be charged with fully developing lands for the benefit
of their clients. Mr. Malone commented that these lands are
a part of the corpus of the trust. Generating the greatest
return on the corpus is the fiduciary obligation. He added
that the Board does explore options regarding the use of
those lands. Mr. Malone emphasized that his first
responsibility would be to the Trust itself.
Representative Stoltze pointed out that the position was
volunteer and thanked Mr. Malone for his many years of
public-service work.
Representative Hawker observed that AMHT is an independent
organization, however, they do not have a Certified Public
Accountant (CPA) annual audit. Representative Hawker asked
Mr. Malone if the Board would be willing to consider that,
as it would increase their accountability.
Mr. Malone replied that was a level of accountability that
he would support.
Representative Hawker explained that an annual audit should
be a routine business matter. He added that there has been
no indication that there have been problems with this
organization.
Co-Chair Williams commented that if there were no
objections, Mr. John Malone would be confirmed by the House
Finance Committee.
There being NO OBJECTION, in accordance with AS 39.05.080,
the Finance Committee reviewed the qualifications of John
Malone, the Governor's appointee, and recommended that his
name be forwarded to a joint session for consideration for
the Mental Health Trust Authority Board of Trustees.
CHANGE IN THE LONGEVITY POLICY
PAM VARNI, EXECUTIVE DIRECTOR, LEGISLATIVE AFFAIRS AGENCY
(LAA), explained that the Senate/House Employment policy,
which has been in effect since 1988, has worked well with
the exception of the longevity steps J-M. According to the
policy, "Steps J-M will be granted in accordance with AS
39.27.022". AS 39.27.022(d) permits a committee of the
Legislature to determine whether longevity pay increments
will be granted under AS 39.27.022 to employees under the
authority of that committee.
Ms. Varni stated that language does not work well because of
the inclusion of the word "continuous". "Continuous" comes
into play when legislative staff change position and then
depending on who they are working for, their range will
change contingent on budget constraints.
Ms. Varni noted that the new policy had been changed by the
Senate Rules, House Rules, Legislative Counsel,
Administrative Regulations Review and Senate Finance
Committees. She requested that the House Finance Committee
not adopt AS 39.27.022, but instead adopt the proposed
policy with an effective date of January 16, 2003. That is
the date that all new staff started their session, would
make it equitable and fair. She thought that action would
help retain long-term staff without changes.
Representative Foster MOVED that the House Finance Committee
not adopt AS 39.27.022 - pay increments for longevity for
State service but instead adopt their own plan which better
applies to legislative service. The new policy before
th
members would be effective January 16, 2003.
Vice-Chair Meyer inquired if a lot of people had been
impacted by the previous legislation. Ms. Varni responded
that at present time, there are about 10 staff members in
that area. She indicated that if action is not taken, there
will be more staff 'down the road' that would not be treated
equally.
Representative Joule pointed out that the concern only
addresses the longevity issue and he encouraged the benefit
of retention of all good staff.
There being NO OBJECTION to the change, the motion was
passed.
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.
SENATOR GARY STEVENS commented that Alaska, like the rest of
the nation is experiencing a severe shortage of qualified
teachers and principals. Research has shown that a
qualified teacher in the classroom is the single most
important school-based factor in a student's success. It is
incumbent upon the Legislature to provide additional tools
to Alaskan school districts to ameliorate the current
teacher shortage to assist school districts in their efforts
to improve student learning.
HB 20 would allow schools experiencing a shortage of
education professionals to reemploy teachers and principals
who had retired under a Retirement Incentive Program (RIP).
The bill would not require any school district to reemploy
any particular retired individual; it would only give them
the 'option' to do so.
Senator Stevens continued, school districts would be
required to certify that they are experiencing a shortage in
order to reemploy a RIP-retired teacher or principal. Those
reemployed under the provision would not be required to pay
back their retirement incentive and could elect to either
continue receiving their retirement benefits or to accrue
new Teacher Retirement System (TRS) credited service during
that re-hire period. The Department of Education would also
be able to hire RIP-retired teachers and principals for
Alyeska Central School, Mt. Edgecumbe, the Alaska State
School for the Deaf and Hard of Hearing and the Alaska
Vocational Technical Center.
Statute allowing school districts to hire any retired
personnel without penalty sunsets on July 1, 2005; school
districts would not be able to reemploy any additional
retirees after that date.
Co-Chair Harris asked what would happen in a district where
there was not a shortage of teachers.
Senator Stevens emphasized that the district would have to
indicate that there was a 'shortage'. The inability to find
a teacher with the specific criterion needed for that
position in that school district would have to be present.
Co-Chair Harris wanted to guarantee that the legislation
would only fill areas where there just were not enough
teachers. He pointed out that there are new teachers coming
up and that the proposed hirees had gone through the RIP
program and had benefited from it. He stressed that he
would not want to see an advantage for the retired employees
coming back, over and above the new teachers coming in.
Senator Stevens suggested that the Department remark
regarding that concern.
Representative Joule commented that the legislation
attempted to reach an element of 'quality'. Those teachers
that 'ripped' were often very valuable. He reiterated that
it is important to guarantee that the children have quality
in their classrooms, particularly in rural areas, where
quality teachers are seriously needed.
Co-Chair Williams interjected that the Committee's time be
used for questions rather than debate.
Representative Chenault observed that there has been concern
voiced regarding the 105% retirement benefit pay back. He
asked if these hired back teachers would continue to build
retirement benefits.
Senator Stevens explained that under present law, a teacher
who ripped can return to employment at 105% of the benefits
they received. They would come back into the system as a
full tenured teachers and would continue to accrue time in
the retirement system. The advantage of the proposed
legislation is that it would allow the district to hire
someone if there was a need. That person would have no
tenure and no guarantee of a job in the future. They would
have the option of returning to teach and getting back 105%
from the retirement system, or under HB 20, they could
continue to receive their retirement and benefits,
negotiating a deal with the school district for salary
without tenure or insurance. From the district's
standpoint, there would be financial advantages.
Representative Hawker referenced language 'adopt a policy',
which would allow the school district to adopt the policy
that permits the employment of retired teachers. He asked
if there was any information on that policy that could
provide guidance in defining 'shortage'. Senator Stevens
understood that language would be found in the Department's
regulations.
GUY BELL, DIRECTOR, DIVISION OF RETIREMENT AND BENEFITS,
DEPARTMENT OF ADMINISTRATION, noted that the Department had
submitted a zero fiscal note because the full cost of the
retirement incentive program was paid at the time that the
teacher retired.
Mr. Bell spoke to the declaration of shortage. The law
allows that the declaration of shortage be self-policing and
that each school district makes their own determination
regarding shortage. They will need to notify the Division
and then the school district would hire the retired teacher
under that provision. Regarding the statistical
information, only 80 of the 4,000 teachers have returned to
teaching under these provision waivers. There has been a
fairly limited use and it has been used judiciously when
there is a shortage. He did not foresee a need to go beyond
that self-policing arrangement.
Co-Chair Harris pointed out that the sponsor statement
indicates that they would not be required to pay back their
retirement incentive and could continue to receive those
benefits or to accrue new teacher retirement system credit
service during the rehire period. Mr. Bell explained that
they could continue to receive the rehire service during
that period but they would still be subject to the RIP
penalty. The only way to avoid that penalty would be to
file to elect the waiver and not accrue additional
retirement credit.
Co-Chair Harris asked if the penalty was the payback. Mr.
Bell advised that the penalty is a determination made by the
Legislature and if that person comes back, the 110%
additional benefit received, the person would loose the
credit received by virtue of their ripping. The only way in
which it makes sense is if the teacher was intending to work
more than three years; otherwise, the teacher would be
taking a 'big hit' in lost benefits.
Co-Chair Harris asked if it would be up to each individual
school district to determine the level of pay for the
returning teacher.
Mr. Bell noted that the bill is 'silent' regarding the pay
scale. The issue of pay is subject between the bargaining
agreement between the school district and its employee
union. Whatever is in place for that school district, would
apply.
Co-Chair Harris asked if the teacher would be hired back
with their longevity. Mr. Bell advised that could happen if
it was indicated in the school's contract.
Co-Chair Harris believed that the only way that the contract
would indicate that would be an inclusion stipulated in the
contract about retired teachers returning to work. Mr. Bell
acknowledged that he did not know about the law and how it
would apply to salary scales.
Mr. Bell advised that today, a non-ripped teacher could come
back under these provisions. The salary scale that they are
hired back at is subject to their school district's call.
They could come back at an entry-level position or with some
level of seniority. He reiterated that the Department does
not make that determination.
Co-Chair Harris commented that it might not be a cost
savings to the district to hire them back. Mr. Bell replied
that the State would no longer contribute to the retirement
system on that person's behalf, creating a savings.
Currently, the retirement system requires that the school
district pay 12% of the salary to the retirement system,
which would be waived.
Co-Chair Williams inquired about the health care costs. Mr.
Bell responded that as long as the person stays as a
retiree, they are subject to the retiree medical plan.
Representative Stoltze suggested that the intent should be
that the teachers come in at entry-level positions. He
believed that legislative intent should be added to indicate
that language.
Co-Chair Williams responded that had not been used in the
statewide school system information. Representative Stoltze
mentioned the 'unintended consequences' of not implementing
it.
KEVIN SWEENEY, LEGISLATIVE LIAISON, DEPARTMENT OF EDUCATION
AND EARLY DEVELOPMENT, impressed upon members of the
Committee that there exists a serious problem with teacher
shortages in the State of Alaska. There is a chronic
difficulty in attracting and retaining teachers in certain
areas of the State and in certain education fields. He
provided members with a handout, RETAINING QUALITY TEACHERS
FOR ALASKA, written by the Institute of Social & Economic
Research. (Copy on File).
Mr. Sweeney commended the Legislature in recognizing that
the challenge exists. He acknowledged that there were
several bills that deal with teacher shortages. Some of the
bills will help the Department and the individual districts
attract and retain qualified teachers for the communities.
He stressed that HB 20 is one of those bills and that the
Department supports it.
Mr. Sweeney clarified that the bill as amended by the House
State Affairs will assist the Department to attract
qualified people to fill positions within the Division of
teaching and learning support. These positions provide
support and monitoring of programs throughout the State and
as such, the positions require that they be certified
teachers. He noted that he was speaking to about 30
positions Division-wide and that there have been high rates
of turnover and positions have gone unfilled for extended
periods of time.
Mr. Sweeney reiterated that HB 20 addresses areas in which
shortages have been experienced and where the Department or
the district can declare a shortage. He reiterated that for
those reasons, the Department supports HB 20.
Co-Chair Harris reiterated his concern regarding multiple
applications for certain positions and who would be chosen
to fill them. Mr. Sweeney responded that multiple
applications would not indicate a shortage. The bill talks
about a place where shortages have been identified.
Co-Chair Harris commented that 'sometimes, politics rears
its ugly head', in these types of situations. Mr. Sweeney
hoped that would not happen and did not believe that was the
situation experienced in many of these districts.
Co-Chair Harris stated that his concern addresses those
areas where new teachers want to come and then perhaps
certain people are given an advantage over the new ones.
Mr. Sweeney reiterated that was not the intent of the
proposed legislation.
Representative Joule inquired if there would be a quick turn
around time for the people needing this certification. Mr.
Sweeney did not know if the legislation would require the
Department to oversee certification of the shortage.
Representative Joule asked who would verify that there was a
shortage. Mr. Sweeney stated that would be addressed by
each individual district. He emphasized that these
shortages are 'real'; in some areas, there is a 30% turnover
rate.
Representative Foster MOVED to report HB 20 (STA) out of
Committee with individual recommendations and with the
accompanying fiscal note.
There being NO OBJECTION, it was so ordered.
CS HB 20 (STA) was reported out of Committee with a "do
pass" recommendation and with fiscal note #1 by the
Department of Administration
ADJOURNMENT
The meeting was adjourned at 2:20 P.M.
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