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

Nate Rochon cleans fish after dipnetting in the Kasilof River, on June 25, 2019, in Kasilof, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)
King closures continue; Kasilof dipnet opens Saturday

The early-run Kenai River king sport fishery remains closed, and fishing for kings of any size is prohibited

An "Al Gross for Congress" sign sits near the driveway to Gross’ home in Anchorage, Alaska, on Tuesday, June 21, 2022, after he announced plans to withdraw from the U.S. House race. Gross has given little explanation in two statements for why he is ending his campaign, and a woman who answered the door at the Gross home asked a reporter to leave the property. (AP Photo/Mark Thiessen)
Alaska judge rules Sweeney won’t advance to special election

JUNEAU — A state court judge ruled Friday that Alaska elections officials… Continue reading

Ashlyn O’Hara/Peninsula Clarion 
Soldotna City Manager Stephanie Queen listens to a presentation from Alaska Communications during a meeting of the Soldotna City Council on Wednesday, March 9, 2022 in Soldotna, Alaska.
ACS pilots fiber program in certain peninsula neighborhoods

The fiber to the home service will make available the fastest internet home speeds on the peninsula

Nurse Tracy Silta draws a dose of the Moderna COVID-19 vaccine at the walk-in clinic at the intersection of the Kenai Spur and Sterling Highways in Soldotna, Alaska on Wednesday, June 9, 2021. COVID-19 vaccines for kids younger than 5 years old are now approved by both the Food and Drug Administration and the Centers for Disease Control and Prevention. (Camille Botello / Peninsula Clarion)
COVID shots for kids under 5 available at public health

Roughly 18 million kids nationwide will now be eligible to get their COVID vaccines.

Megan Mitchell, left, and Nick McCoy protest the U.S. Supreme Court’s decision overturning of Roe v. Wade at the intersection of the Kenai Spur and Sterling highways on Friday, June 24, 2022 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
‘Heartbroken’, ‘Betrayed’: Alaskans react to Roe decision

Supreme Court decision ends nearly 50 years of legally protected access to abortion

Demonstrators gather outside the Supreme Court in Washington, Friday, June 24, 2022. The Supreme Court has ended constitutional protections for abortion that had been in place nearly 50 years, a decision by its conservative majority to overturn the court’s landmark abortion cases. (AP Photo / Jose Luis Magana)
Alaskans react to Supreme Court overturn of Roe v. Wade

The Supreme Court has ended constitutional protections for abortion.

Tara Sweeney, a Republican seeking the sole U.S. House seat in Alaska, speaks during a forum for candidates, May 12, 2022, in Anchorage, Alaska. (AP Photo/ Mark Thiessen)
Lawsuit says Sweeney should advance in Alaska US House race

The lawsuit says the fifth-place finisher in the special primary, Republican Tara Sweeney, should be put on the August special election ballot

Gubernatorial candidate Bill Walker stands in the Peninsula Clarion office on Friday, May 6, 2022, in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Alaska AFL-CIO endorses Walker, Murkowski, Peltola

The AFL-CIO is Alaska’s largest labor organization and has historically been one of its most powerful political groups

A portion of a draft letter from Jeffrey Clark is displayed as the House select committee investigating the Jan. 6 attack on the U.S. Capitol continues to reveal its findings of a year-long investigation, at the Capitol in Washington, Thursday, June 23, 2022. (AP Photo/Jacquelyn Martin)
Federal agents search Trump-era official’s home, subpoena GOP leaders

Authorities on Wednesday searched the Virginia home of Jeffrey Clark

Most Read