What others say: Pay now, not later

  • Tuesday, April 8, 2014 5:24pm
  • Opinion

Using a quarter of your savings to pay down an ever-growing debt makes sense, but it’s hard not to pause when you’re paying $3 billion.

That’s the plan Gov. Sean Parnell has put forward to address the state’s growing unfunded liability to the public employees’ and teachers retirement systems, better known as PERS and TRS. The rationale behind the move is that by injecting $3 billion from state reserves now, future payments will be smaller and easier to manage without breaking the piggy bank. The money will go into a trust fund account so the interest along with starting balance would pay off benefits owed by 2037.

Considering the alternatives on the table, the governor’s proposal makes the most fiscal sense. Without it, the state will pay billions more over the next few decades as annual contributions continue to climb. Alaska’s contribution for this year is expected to be nearly $1 billion, according to a February report by Buck Consultants.

The retirement system has been compared by some to mortgage payments, and the governor wants to use state reserves as a lump-sum down payment. The big winners in this scenario are the employers, namely municipalities, who contribute to the retirement systems. With that said, everyone who benefits from local government — all of us — wins. Without the cash injection, municipalities will see their payments balloon out of control during a time when municipal budgets, including school funding, are being slashed.

Using a quarter of the state’s savings may put some on edge, but it’s the only way to ensure the payments don’t bankrupt municipalities in decades to come.

Some have argued that with oil production steadily declining and the state cutting back on spending, now isn’t the time to pilfer reserve funds — Alaska may need that money in the future. We believe the state needs to pursue this option to pay down its unfunded liability while it still has options on the table. Kicking the can down the road for someone else to deal with is irresponsible and places the burden on future generations.

Alaska can afford putting $3 billion toward resolving this issue. What it can’t afford is to do nothing.

— Juneau Empire,

April 3

More in Opinion

Apayauq Reitan, the first transgender woman to participate in the Iditarod, tells the House Education Committee on March 30, 2023, why she opposes a bill restricting transgender rights. (Mark Sabbatini/Juneau Empire file photo)
Opinion: The imaginary transgender sports crisis

House Bill 183 is a right-wing solution to a problem that doesn’t exist now and never will.

Sen. Jesse Bjorkman, a Nikiski Republican, speaks in favor of overriding a veto of Senate Bill 140 during floor debate of a joint session of the Alaska State Legislature on Monday, March 18, 2024. (Mark Sabbatini / Juneau Empire)
Sen. Jesse Bjorkman: Session ends with budget, dividend and bills passed

Capitol Corner: Legislators report back from Juneau

The Alaska State Capitol. (Clarise Larson / Juneau Empire file photo)
Listen to PAs; support Senate Bill 115: Modernizing PA Practice in Alaska

Health care is rapidly evolving, demanding a more flexible and responsive system

Mount Redoubt can be seen across Cook Inlet from North Kenai Beach on Thursday, July 2, 2022. (Erin Thompson/Peninsula Clarion file photo)
Opinion: Hilcorp Alaska: Powering Southcentral Alaska — past, present and future

Hilcorp Alaska has and will continue to fully develop our Cook Inlet basin leasehold

Sen. Jesse Bjorkman, a Nikiski Republican, speaks in favor of overriding a veto of Senate Bill 140 during floor debate of a joint session of the Alaska State Legislature on Monday, March 18, 2024 (Mark Sabbatini / Juneau Empire)
Sen. Jesse Bjorkman: Collegiality matters

Capitol Corner: Legislators report back from Juneau

Juneau Empire file photo
Larry Persily.
Opinion: Alaska might as well embrace the past

The governor, legislators, municipal officials and business leaders are worried that the Railbelt will run short of natural gas before the end of the decade

The Alaska State Capitol on March 1. (Ashlyn O’Hara/Peninsula Clarion)
Opinion: Physicians oppose Alaska Senate Bill 115 — Independent Practice for PAs

Alaskans don’t want access to just any health care, they want access to high quality care

Norm McDonald is the deputy director of Fire Protection for the Alaska Division of Forestry & Fire Protection. (Photo courtesy Bureau of Land Management Alaska Fire Service)
The Swan Lake Fire can be seen from above on Monday, Aug. 26, 2019, on the Kenai Peninsula, Alaska. (Photo courtesy Alaska Wildland Fire Information)
Opinion: This wildfire prevention month, reflect on ways to protect each other and our communities from wildfire

Alaskans saw what happened in Canada last year, and they know it can happen here too

Jason Sodergren and retired veterinarian Ralph Broshes capture and attend to crane shot with an arrow, July 9, 2023, in Homer, Alaska. (Photo provided by Nina Faust)
What happened to the ‘Arrowshot Crane’?

In many animal rescues, the outcome is fairly quickly known, but the… Continue reading