Fiscal cost-cutters in the Alaska Senate have turned their attention on the state\u2019s Public Employees Retirement and Teachers Retirement systems as they seek to level Alaska\u2019s $4.1 billion budget deficit.<\/p>\n
In a press conference Monday, Sen. Pete Kelly, R-Fairbanks, introduced four bills on behalf of the Senate Finance Committee, which he chairs.<\/p>\n
The bills will, respectively, increase the local contribution for TRS, increase the local contribution for PERS, eliminate the Alaska Performance Scholarship, and decrease the state\u2019s revenue sharing program for large communities.<\/p>\n
\u201cWe\u2019re not just closing our eyes and taking big, meat cleaver swings at the budget,\u201d Kelly said, flanked by other members of the committee.<\/p>\n
\u201cAt this time in the state\u2019s history, the state of Alaska is on the brink of going broke,\u201d said Sen. Lyman Hoffman, D-Bethel. \u201cSomehow we need to come to terms with the fact that the financial condition of the state of Alaska has changed, and everything needs to be looked at and is on the table.\u201d<\/p>\n
Senate bills 207, 208, 209 and 210 will receive their first hearing in the Senate Finance Committee at 1 p.m. this afternoon.<\/p>\n
Details of their effects will be revealed in the next several days as the Senate Finance Committee holds hearings and gathers public testimony. Overall, however, the net effect is to increase local governments\u2019 share of costs while reducing the state\u2019s costs.<\/p>\n
SB 209 calls for raising the local government\u2019s contribution toward public employee retirement from 22 percent to 26.5 percent by July 1, 2018. SB 207 calls for the local contribution to teachers\u2019 retirement to rise from 12.56 percent to 22 percent by July 1, 2019.<\/p>\n
\u201cThis bill, as I understand it, could result in significantly increased taxes,\u201d said Sen. Bill Wielechowski, D-Anchorage, speaking on the Senate floor about SB 207\u2019s effect on local property and sales taxes.<\/p>\n
State and city offices were closed Monday for the Seward\u2019s Day holiday, but Assembly member Jesse Kiehl, a staffer for Sen. Dennis Egan, D-Juneau, performed a quick estimate of some costs after examining the bills pertaining to the public employees\u2019 and teachers\u2019 retirement system.<\/p>\n
\u201cBy my calculation, $2,155,000,\u201d he said, is the cost to the Juneau School District in FY17.<\/p>\n
Kiehl used 2013 gross salaries for the calculation, and he estimated that other branches of local government would also pay more. The City and Borough of Juneau, would pay $855,000 more for its employees; Bartlett Regional Hospital would pay $725,000 more.<\/p>\n
As an attempt to phase in those increases for school districts, SB 208 eliminates the Alaska Performance Scholarship program for college-bound high school students and makes the program\u2019s money available.<\/p>\n
\u201cIf things go the way my office is planning, there will be no impact on the districts this year,\u201d Kelly said.<\/p>\n
Students graduating this year and those already receiving scholarships will be assured of receiving them through 2022. After that year, the program will go away.<\/p>\n
Senate Bill 210 reformulates the state\u2019s revenue sharing program for municipalities. According to the text of the legislation, its effect would be to raise the amount for the state\u2019s smallest communities, while big cities – including Juneau, Anchorage and Fairbanks – would get less. According to state records, Juneau is eligible for $1.3 million in revenue sharing in the coming fiscal year. That figure is expected to drop if the bill passes.<\/p>\n
Also included in SB 210 is a clause that would allow municipalities to change the property tax exemption for seniors older than 65. Currently, the state requires a $150,000 exemption.<\/p>\n
If that exemption becomes optional, Kiehl said, it would have an effect on the state\u2019s formula for school funding. That formula is based upon the taxable value of property in a municipality, and making the mandatory exemption optional – even if the size of the exemption didn\u2019t change – would require the City and Borough of Juneau to pay $640,000 more per year for schools.<\/p>\n
Also included in SB 210 is a clause that would allow municipalities to completely exempt homeowners 65 and older from property taxes. Currently, the state maximum property tax exemption is $150,000.<\/p>\n
The four bills are expected to meet heated opposition from the Democratic minority in the Senate, which objected to the fact that all four – products of the Senate Finance Committee – have been referred to only that committee for review before a floor vote. That puts them on the fast track toward passage.<\/p>\n
\u201cWe\u2019re doing shortcuts here that are wrong,\u201d said Sen. Berta Gardner, D-Anchorage, who asked Senate President Kevin Meyer, R-Anchorage, to send the bills to an additional committee for vetting.<\/p>\n
The four-person minority\u2019s ability to influence legislation in the 20-person Senate is limited, however, and Gardner\u2019s objections were overruled.<\/p>\n
The minority did attempt to score a political point, however, as Sen. Dennis Egan, D-Juneau, asked for a PERS bill he sponsored – SB 88 – to receive the same treatment and be referred to the Senate Finance Committee only. His request was turned down by the Republican-led majority, 13-4.<\/p>\n
\u2022 Contact reporter James Brooks at james.k.brooks@juneauempire.com.<\/p>\n","protected":false},"excerpt":{"rendered":"
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