Once the go-to-gal for the GOP, Sen. Cathy Giessel of South Anchorage was the darling of the Democrats on Wednesday afternoon.
She was the star of a reception with AFL-CIO Alaska President Joelle Hall, celebrating the movement of Giessel’s bill, SB 88, out of Senate Finance, which means it will get a floor early this session. Unions have flooded the Alaska Capitol this week to make sure it does keep moving.
Giessel is now the AFL-CIO’s water-carrier, at least in the Senate.
SB 88 is written for state and local public employees: “An Act relating to the Public Employees’ Retirement System of Alaska and the teachers’ retirement system; providing certain employees an opportunity to choose between the defined benefit and defined contribution plans of the Public Employees’ Retirement System of Alaska and the teachers’ retirement system; and providing for an effective date.”
While existing public employees would have the option of choosing between defined benefits (old-style pensions) and 401K contribution plans, anyone new coming into the Alaska State and teachers employment systems will go into the back-from-the-dead defined benefit program.
It would almost certainly put Alaska in the red and hurt its bonding capacity. Alaska is the only state considering going back to pensions, while other states are sunsetting them. The Alaska defined benefits plan was closed to new entrants in 2006, just before it collapsed under its own weight. States that have these public employee pension plans are going bankrupt.
Sen. Burt Stedman pointed out in the committee hearing that the fiscal notes are inadequate.
“I’m just struggling here trying to figure out, because we’ve got dueling actuaries, and we’ve got these fiscal notes. What do we use for thes fiscal note? We should be able to — we’re dealing with 100,000 people, I think — we should be able to put a hopefully a finer point on it. I don’t know what documents to rely on,” he said.
There was dead silence for several seconds. Stedman was the senator who helped get rid of the old defined benefits program and he is co-chair of the Finance Committee, along with Sen. Click Bishop, who favors reviving defined benefits from its grave.
Olson, who was chairing the meeting, bought up to the witness stand his aide, Ken Alper, who has been trying to get an income tax passed on Alaskans and now is endeavoring to reinstate the costly defined benefit plan that would drive up the state’s retirement costs. He gave a lengthy soliloquy but did not answer the question of why the fiscal note was not ready.
Alper said there is a regular agency fiscal note, but that the fiscal notes attached to the actuary are dated May, 2023 and written for the Senate Labor & Commerce Committee’s version of the bill. He said it will be updated, but not until the Finance Committee votes the bill out of committee.
“Because of the nature of the analysis, it’s expected to take over a month,” he said. The sponsors had all summer to update it, but neglected to do so, evidently.
With 11 sponsors who are in the Senate Democrat-dominated majority, the bill will have passed the Senate and be in the House for consideration before the actuary fiscal note is ready.
The 11 cosponsors on the bill are:
Democrats: Senators Jesse Kiehl, Scott Kawasaki, Loki Tobin, Bll Wielechowski, Elvi Gray-Jackson, Forrest Dunbar, Matt Claman, Donny Olson
Republicans: Senators Cathy Giessel, Click Bishop, Gary Stevens
Audio is available for the Wednesday Senate Finance Committee deliberation and vote at this link.
Video of the hearing can be found at this link.