JUNEAU -- Alaska legislators are maneuvering to keep the public out of their decision-making process for education funding and are now blaming the public they excluded for not being more involved in the process.
The House Finance Committee Tuesday adopted a dramatic change to teacher retirement funding, pushing costs off on future generations and giving legislators more money to spend in the near future.
House Finance Committee Co-chair Bill Stoltze, R-Wasilla, said the plan, proposed by Legislative Finance Director David Teal, was to stop setting aside money to pay for retirement benefits that have often already been earned but which may not have to be paid out for decades.
That plan, called "pay as you go," wouldn't directly cut retirement payments, but it would exhaust the Teachers' Retirement Trust Fund and then rely on future legislators to make annual appropriations to pay retirement costs until the last beneficiary of a traditional retirement program has died. Teachers hired after 2006 are responsible for their own retirements through a 401(k)-style program.
Stoltze Wednesday said no one should be surprised by the plan he and Teal proposed.
"Everybody knew this proposal and this different approach was circulating," Stoltze said Wednesday, following its first public airing Tuesday.
Prior to revealing the plan, Stoltze had denied a request from Alaska Dispatch to know what he'd propose to deal with the state's unfunded retirement liability. Stoltze said he didn't want to "start playing the chess game too early" by revealing his strategy.
Tuesday the House Finance Committee added the Teal/Stoltze pay-as-you-go plan into Gov. Sean Parnell's omnibus education bill. Parnell administration officials called the plan "fairly radical" and said it could threaten the state's credit rating and ability to finance a natural gas pipeline.
The omnibus education bill, House Bill 278, had been scheduled for a vote by the full House of Representatives as soon as Wednesday, but that was delayed for further consideration, including amendments, in the House Finance Committee Wednesday.
Rep. Cathy Munoz, R-Juneau, tried to strip the Stoltze/Teal plan from House Bill 278.
"My concern is the depletion of the trust funds," she said.
Building up the retirement trust now will continue to allow investment earnings over decades to pay a big share of the retirement costs, she said.
"We are able to generate billions of dollars over the course of that obligation by having the trust fund," she said.
Stoltze said that Parnell didn't do enough, beyond including it in his budget, to support his plan for extra retirement payments. He could have introduced a specific bill to do that. Stoltze said he would be open to changes in the bill by the Senate.
Munoz' proposed amendment to House Bill 278 to remove the Stoltze/Teal plan failed on a 5-5 vote. Supporting Munoz were Reps. Steve Thompson, R-Fairbanks; Bryce Edgmon, D-Dillingham; David Guttenberg, D-Fairbanks; and Les Gara, D-Anchorage. Voting against Munoz were Stoltze and Reps. Mia Costello, R-Anchorage; Tammie Wilson, R-North Pole; Mark Neuman, R-Big Lake; and Lindsey Holmes, R-Anchorage.
Co-chair Alan Austerman, R-Kodiak, was absent due to a previously scheduled medical leave.
HB 278 passed out of the Finance Committee Wednesday evening, and will now go the House floor for a vote on passage without having heard from the public on the bill's major provisions, such as its retirement changes.
From there it will go to the Senate, where President Charlie Huggins, R-Wasilla, said Tuesday that members of the Republican-led Senate majority caucus had already been briefed on Teal's plan for using the trust funds to subsidize retirement costs.
Huggins denied that the Teal plan had been secret. It had been presented by Teal at a meeting of the majority caucus Huggins leads during a dinner at Juneau's Baranof Hotel, he said.
"We had a dinner down at the Baranof. The doors were open; you could come in if you wanted to," Huggins told reporters.
Majority caucus meetings, the time and location of which are not made public, are traditionally closed to the public and are where policy positions are decided.
But at the same press conference Tuesday at which Huggins spoke, Sen. Bert Stedman, R-Sitka, indicated that not all caucus members were in agreement on the plan adopted by the House Finance Committee.
The Teal/Stoltze plan would "bankrupt the trust," said Stedman, who said he supported Parnell's plan for building up the trust fund to minimize future state costs.
Contact Pat Forgey at pat(at)alaskadispatch.com.