JUNEAU — Advocates for Alaska cities and school districts are dreading the arrival next week of mysterious legislation from the Senate that they fear will leave them with higher pension bills and less money to pay them.
"We have heard rumors about this coming for a month," said Kathie Wasserman, the executive director of the Alaska Municipal League. "Every day it's, 'Oh, no — we're not ready yet.' No one will talk about this with us."
But at a briefing with reporters Friday morning, Senate President Kevin Meyer said leaders from his chamber are set to introduce legislation Monday that will affect several state-local programs as lawmakers grapple with a $4 billion budget deficit.
Among them is community revenue sharing, a program that began in its current form in 2008 and distributed about $50 million last year to Alaska boroughs, cities, and unincorporated communities — with 2015 estimated payments ranging from $113,000 to the 300-person North Slope village of Anaktuvuk Pass to $14.8 million for Anchorage.
Payouts from the program have been dropping, however, and would reach zero in two years unless the House and Senate add money to the preliminary budgets they've already passed.
Another effect of the legislation will be on payments made by the state to help cover pension costs for teachers and local government workers.
Currently, municipalities contribute 22 percent of employees' payroll to help pay down a shortfall in the state's pension system.
The true cost of the annual payments is closer to 26 percent, with the state making up the difference. Wasserman said she fears lawmakers are poised to shift that bill to municipalities and school districts, which would add about $5.5 million to local governments statewide for every one percent difference.
"Revenue sharing going down is one thing," Wasserman said. "And then getting extra bills to pay is another."
She said she was worried the legislation would not cut costs but instead shift them to local governments, which would then have to increase their own taxes.
Meyer wouldn't reveal the specifics of the legislation set for introduction Monday. But at a general level, he said the legislation would affect the pension systems and revenue sharing, and tie into per-student funding for schools.
"They're going to tie them all together," Meyer said. "And then do a gradual transition so it's not too big a hit."
He added that the legislation would likely reduce state payments for teachers' pensions but leave the per-student funding intact.
One other clue was offered by a hearing scheduled Tuesday before the Senate Finance Committee. The schedule refers to four bills that haven't yet been introduced — two that affect contributions to the teachers' and municipal workers' retirement systems, another that affects "community assistance," and a fourth that has to do with the Alaska Performance Scholarships.
Those scholarships, which can be up to $4,755 annually, come out of the $400 million Alaska Higher Education Investment Fund. They're budgeted at $11.5 million next year.
Wasserman said she recognized that low oil prices, which have crashed state revenues to rock-bottom levels, are forcing a reconsideration of state aid to municipalities.
But she said lawmakers had shut her out of discussions about how to cut costs, and were set to introduce their legislation with just three weeks left in the legislative session.
"I am astounded," she said. "This is certainly not transparent and open government."
School district leaders, meanwhile, are "very concerned" about the anticipated legislation as they try to finalize their budgets, said Lisa Parady, the executive director of the Alaska Council of School Administrators.
"We're late to drop something like this on school districts," she said. "It's a high stress level."