Parnell reiterates call for action on pension issue

  • By Becky Bohrer
  • Saturday, March 22, 2014 9:18pm
  • News

JUNEAU — Gov. Sean Parnell on Friday reiterated his call for lawmakers to put $3 billion from savings toward paying down the state’s unfunded pension liability, saying it’s the best thing they could do to help ease pressure on Alaska’s budget.

With about a month left before the scheduled end of session, lawmakers have not yet decided how best to address the issue.

Last week, Rep. Alan Austerman, R-Kodiak, a co-chair of the House Finance Committee, said “everything” was on the table in discussions with his fellow majority members, including possible contribution increases by municipalities, extending the timeline for payments and Parnell’s proposal.

Sen. Anna Fairclough, R-Eagle River, and vice-chair of the Senate Finance Committee, said Friday that senators were still running numbers and analyzing the potential effects of different options. Sen. Kevin Meyer, R-Anchorage and Senate Finance co-chair, said he thought senators were pretty close to the governor but it was a matter of working out all the details.

The response to Parnell’s plan has been mixed. While some lawmakers support that kind of cash infusion to help lower annual payments — including members of the Senate Democratic minority, who pitched a similar idea two years ago — others are wary of taking so much from savings given the current budget environment.

Rep. Mark Neuman, R-Big Lake, falls in the latter category. Neuman, who chairs a House Finance subcommittee overseeing the state health department budget, knows future budget cuts won’t get any easier. But he said he hasn’t seen anything yet to convince him to move from the current payment plan the state is on for the pension obligation.

That plan calls for a schedule of rising payments over the next 15 years, on pace to top $1 billion a year before dropping. Under the current schedule, the payment for this year was about $630 million and is estimated to be about $700 million next fiscal year, according to Parnell’s budget office.

Parnell has said a $3-billion transfer from the state constitutional budget reserve fund, divided between the public employees’ and teachers’ retirement systems, would lower annual payments to $500 million. A draw from that reserve fund requires a three-fourths vote of the members of each the House and Senate.

In an interview Friday, he said the best thing lawmakers could do would be to join him in putting Alaska on a more secure foundation, which he believes his plan would accomplish. He said it would save the state hundreds of millions of dollars a year if lawmakers agreed to his plan or made minimal changes to it. A $1.5-billion infusion, for example, would not have the same impact when it comes to easing budget pressures as $3 billion would, he said.

While Parnell said he’s keeping an open mind to ideas, he said he didn’t think it was necessary to shift more liability over to municipalities at this time, citing concerns with the impact on local budgets.

Parnell also recently appointed a group to recommend changes to Alaska’s Medicaid program, which is another major budget driver. A report from that group is due later this year.

More in News

Assembly President Brent Johnson asks questions of representatives of the Kenai Peninsula Borough School District during a joint work session of the School Board and Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, April 2, 2024. (Jake Dye/Peninsula Clarion)
Borough to enter contract for asbestos flooring abatement in 3 central peninsula schools

The work will be done at Kenai Central High, Kenai Alternative High and Sterling Elementary schools

Alaska State Troopers logo.
1 dead, 3 missing after boat capsizes near Seward

Alaska State Troopers were notified by the U.S. Coast Guard of an overturned vessel around 1:30 p.m. on Wednesday

Kenai Central High School stands under clear skies in Kenai, Alaska, on Thursday, May 23, 2024. (Jake Dye/Peninsula Clarion)
Borough approves contract for KCHS parking lot rehabilitation

Soldotna-based Foster Construction will be awarded the bid of $648,997 to complete the project

Central Peninsula Hospital is seen in Soldotna on Wednesday, Oct. 13, 2021. (Camille Botello/Peninsula Clarion)
Central Peninsula Hospital to host Cancer Survivor’s Day event

The event will take place Sunday, June 2 from 1 p.m. to 3 p.m.

Jake Dye/Peninsula Clarion
Rep. Ben Carpenter, R-Nikiski, speaks to the joint Soldotna and Kenai chambers of commerce at the Soldotna Regional Sports Complex on Wednesday.
Carpenter gives wrap up on session as he nears end of House term

Carpenter is seeking election to state Senate District D

(from left to right) Jachin Sanchez, Carter Lemons, Rowan Mahoney, Adelyn McCorison and Taylor Rickard graduated from Ninilchik School on Monday, May 13, 2024 in Ninilchik, Alaska. Photo provided by Mattea Peters-Williamson
Ninilchik graduates 5 in 2024 commencement

The school held the ceremony Monday, May 13

Kenai Peninsula Education Association President LaDawn Druce, left, and committee Chair Jason Tauriainen participate in the first meeting of the Kenai Peninsula Borough School District’s Four Day School Week Ad Hoc Committee on Wednesday, Jan. 10, 2024, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
4-day school week committee adjourns

The committee will deliver recommendations to school board in July

Soldotna Elementary School Principal Dr. Austin Stevenson points out corroded insulation outside of the school building on Friday, Sept. 30, 2022 in Soldotna . (Ashlyn O’Hara/Peninsula Clarion)
Soldotna Elementary awaits action on approved bond

Almost two years after public OKs bond, borough asking for more time

Most Read