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

Alaska State Troopers logo.
State Trooper convicted of attempted sexual abuse of a minor

Vance Peronto, formerly an Alaska State Trooper based in Soldotna, was convicted… Continue reading

Soldotna City Hall is seen on Wednesday, June 23, 2021 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Soldotna moves ahead with staff recruitment strategies

Soldotna City Council members last week gave city administration a thumbs up… Continue reading

State representatives Tom McKay, R-Anchorage, and Andi Story, D-Juneau, offering competing amendments to a bill increasing the per-student funding formula for public schools by $1,250 during a House Education Committee meeting Wednesday morning. McKay’s proposal to lower the increase to $150 was defeated. Story’s proposal to implement an increase during the next two years was approved, after her proposed amounts totalling about $1,500 were reduced to $800.
Borough, Soldotna call on Legislature to increase school funding

The City of Soldotna last week became the latest entity to call… Continue reading

Kenai River Brown Bears goalie Nils Wallstrom celebrates winning a shootout over the Fairbanks Ice Dogs on Saturday, March 25, 2023, at the Soldotna Regional Sports Complex in Soldotna, Alaska. (Photo by Jeff Helminiak/Peninsula Clarion)
Brown Bears sweep Ice Dogs, move into 3rd place

The Kenai River Brown Bears earned a two-game sweep over the Fairbanks… Continue reading

The waters of Cook Inlet lap against Nikishka Beach in Nikiski, Alaska, where several local fish sites are located, on Friday, March 24, 2023. (Jake Dye/Peninsula Clarion)
Unprecedented closures threaten setnet way of life

Setnetters have been vocal about their opposition to the way their fishery is managed

Legislative fiscal analysts Alexei Painter, right, and Conor Bell explain the state’s financial outlook during the next decade to the Senate Finance Committee on Friday. (Mark Sabbatini / Juneau Empire)
Legislators eye oil and sales taxes due to fiscal woes

Bills to collect more from North Slope producers, enact new sales taxes get hearings next week.

Expert skateboarder Di’Orr Greenwood, an artist born and raised in the Navajo Nation in Arizona and whose work is featured on the new U.S. stamps, rides her skateboard next to her artworks in the Venice Beach neighborhood in Los Angeles Monday, March 20, 2023. On Friday, March 24, the U.S. Postal Service is debuting the “Art of the Skateboard,” four stamps that will be the first to pay tribute to skateboarding. The stamps underscore how prevalent skateboarding has become, especially in Indian Country, where the demand for designated skate spots has only grown in recent years. (AP Photo/Damian Dovarganes)
Indigenous artists help skateboarding earn stamp of approval

The postal agency ceremoniously unveiled the “Art of the Skateboard” stamps in a Phoenix skate park

Bruce Jaffa, of Jaffa Construction, speaks to a group of students at Seward High School’s Career Day on Thursday, March 23, 2023, at Seward High School in Seward, Alaska. (Jake Dye/Peninsula Clarion)
Seward students talk careers at fair

More than 50 businesses were represented

Alaska state Sen. Bert Stedman, center, a co-chair of the Senate Finance Committee, listens to a presentation on the major North Slope oil project known as the Willow project on Thursday, March 23, 2023, in Juneau, Alaska. The committee heard an update on the project from the state Department of Natural Resources and the state Department of Revenue. (AP Photo/Becky Bohrer)
Official: Willow oil project holds promise, faces obstacles

State tax officials on Thursday provided lawmakers an analysis of potential revenue impacts and benefits from the project

Most Read