Day 45: 'This isn't your grandma's defined benefit plan'
Namely, it's a system that isn't nearly as generous as grandma’s defined benefit plan. But it's better than nothing.
Good morning, Alaska!
In this edition: The Senate Majority has rolled out a public pension bill that would give all public employees, including teachers, a dependable retirement after nearly two decades of saddling public employees with a mountain of uncertainty. Meanwhile, the House Education Committee held a hearing aimed at uncovering the myths of school choice that didn’t debunk any myth other than the myth that school vouchers are all that equitable. The daily schedule. And a spicy exchange in the House Judiciary Committee.
Current mood: 🌶️
‘This isn’t your grandma’s defined benefit plan’
After putting recruitment and retention of public sector employees at the top of their caucus goals for the session, the bipartisan Alaska Senate Majority unveiled legislation on Wednesday that would bring back a defined benefit pension plan to all public sector employees in the state, including teachers. The legislation, Senate Bill 88, already has 10 of the chamber’s 20 members signed on in support.
Since 2006, the state has only offered public employees a defined contribution retirement plan akin to a 401(k) that sets the amount of money employers and employees put in, but leaves management of the retirement account—and therefore the risk if the market goes south—on the shoulders of employees. A recent report found that most state employees on the current retirement tier aren’t on track to save enough for retirement.
In the big picture it’s been blamed for a hollowing out of the public sector as younger employees relocate to states with more certain defined benefit plans—plans that leave the management to the state and guarantee retirement payouts.
Anchorage Republican Sen. Cathy Giessel is the lead sponsor of the bill, and she said she was motivated by much of the early work in the session to explore and understand the state’s workforce problems. She noted that some schools began the year without a teacher in every classroom, that the state’s public assistance office doesn’t have the staff to keep up with applications for food stamps and that state industry is running into problems with slow responses from the state’s permitting agencies.
“A vast majority of our current employees are not able to make adequate savings for retirement. That’s a huge problem and that’s what Senate Bill 88 is aiming to address,” she said, noting that there are significant changes in the plan to address concerns about cost and unfunded liabilities. “This is not your grandma’s defined benefit plan, it’s a whole new system.”
Namely, it’s a system that isn’t nearly as generous as grandma’s defined benefit plan.
“There’s nothing gold-plated about it,” said Juneau Democratic Sen. Jesse Kiehl, a longtime supporter of a defined benefit retirement plan, at the Senate Majority’s news conference. Kiehl has proposed his own separate legislation that would be more generous, but he said this is a good and sensible plan.
The biggest change is that the new retirement plan wouldn’t offer any form of health care coverage for public sector retirees. Before becoming eligible for Medicare, retirees would have to purchase their own coverage or get a new job that provides health insurance if they want coverage. The plan would also call for a higher contribution to retirement for public employees.
“It would be cheaper than any of the legacy plans to employers, it would be cheaper than the current defined contribution plan and it will deliver better benefit to Alaskans who serve the public,” he said, “and therefore it will deliver better value to Alaskans who pay for municipal government with their tax dollars, to Alaskans whose state dollars we are spending and we need to spend responsibly.”
Giessel and other legislators were bullish on the bill’s chance of passing this year, but said they expected to see it passed by the end of the 33rd Legislature next year. It’ll largely come down to what the Republican-led House will do with it, once it arrives over there. The House took quick action on a more limited bill early in the session, but it’s since stalled out once it hit the more party-line House State Affairs Committee, where it has yet to be heard.
The bill’s backers in the Senate include: Giessel as the prime sponsor, and co-sponsors in Sens. Bishop, Stevens, Kiehl, Kawasaki, Tobin, Wielechowski, Gray-Jackson, Dunbar and Claman.
Stay tuned.
‘Uncovering’ the ‘myths’ of ‘school choice’
The House Education Committee under co-Chair Rep. Jamie Allard, R-Eagle River, held a meeting on Wednesday that would make former Eagle River Sen. Lora Reinbold proud. Under the title of “Debunking the myths of school choice,” the hearing invited a load of private/charter/home school advocates from the Lower 48 to regale the committee with largely anecdotal evidence that putting public school funds toward private and religious schools is sound public policy.
If there was a myth that they were keen on debunking, I’m not exactly sure what that was. Instead, much of the hearing laid bare the inequities of funneling public money into private and religious schools that are largely only accessible to the privileged who can afford to cover the gap between the state subsidy and tuition.
It seemed like every presenter had something to say about how children from poor families had lower academic achievement than the wealthy or how it’s the wealthy students that perform better. One even went as far as crediting Massachusetts’ strong academic performance on “a majority anglo student population.”
Perhaps the most telling moment of the day came from a slide on the voucher system in Louisiana, which a presenter held up as an example of a failed system because the test scores didn’t improve as they expected. There, the voucher program is set up with equity in mind and requires the private schools to teach to the state test, accept any student who applies and accept the state’s voucher payment as full tuition. It’s a system that sought to break down barriers for poor families and, surprise, it didn’t perform as well as a system filled with children from wealthier families.
What that means, when you look at it in the big picture, is that the claimed higher performance of these private and charter schools is less likely a function of anything special they’re doing and more a product of the fact that they can be selective about the students they admit. By locking off access to poor and working class families who can’t afford to cover the gap between the voucher and the full tuition or the additional hours and commitment required of parents, they effectively juice their performance.
If there’s any myth that was debunked here, it’s that school vouchers are anywhere close to equitable. It’s a system that “succeeds” in large part because they can be selective about their students (generally white, generally wealthy families).
Allard ran interference for most of the presenters throughout the hearing, limiting or outright cutting off legislators from getting too deep into the questioning of the presenters.
At the end of the hearing, Rep. Andi Story, D-Juneau, tried to ask the presenter whether it is a “negative thing” that the Louisiana schools were required to admit anyone or teach to the state test, but the presenter had already dropped off the call.
Why it matters: There’s nothing inherently wrong about private schools or home schools, but it does become an issue when public funds are starting to head their way in a manner that benefits only the students who have the means to take advantage of it. Legislators ought to look at addressing the inequities in the system rather than make them deeper.
Also, keep in mind, that the Alaska Constitution quite literally forbids public school funds from going to private religious schools.
Follow the thread: The House Education Committee on school choice.
The daily agenda
At 9 a.m., the Senate Finance Committee is getting a presentation from the Division of Public Assistance on SNAP and Medicaid eligibility
The House Energy Committee meets at 10:15 to hear HB75, geothermal resources and gets a presentation on geothermal and hydrogen
House Transportation meets at 1 p.m. to hear HB 81, transfer of vehicle and boat titles on death
Senate Community and Regional Affairs meets at 1:30 to go over SB 16, Alaska Community Health Aide Appreciation Day
House Finance Committee meets at 1:30 to go over the Department of Fish and Game and a long-term Medicaid Forecast by the Department of Health
House Health and Human Services meets at 3 to go over HB56, controlled substance database exempting animal prescriptions; HB6 a public school opioid awareness program; and HB 52, no patient left alone act
Senate Health and Social Services meets at 3:30 to go over HB 57, adult home care
‘We’re Alaskans’
Rep. Jamie Allard had a busy day. In addition to her bonkers hearing on school choice, she also decided to make a big messy issue over Anchorage Republican Rep. Stanley Wright’s House Bill 28. House Bill 28 is a retread of past legislation that would seek to seal convictions for conduct that is no longer illegal under the state’s marijuana legalization system (possession of less than one ounce by someone 21 or over).
It would simply reinforce an existing court rule that would take such convictions off the court’s online database (you could still get them by going to a courthouse in person) or be released through the Department of Public Safety’s basic background check (it’d still be captured in elevated checks).
Allard launched into a series of combative questions that wrongly accused the bill of being expungement (it’s not), which she likened to lying (it’s not), and wondered where the rights of the business owners to refuse to hire someone with a conviction for now-legal behavior was being protected.
Wright met much of it with candor that I think few of us could muster in the situation.
“I’d like to say once you pay your debt to society, it shouldn’t be held over your head for the rest of your life. Especially if now it’s legal,” he said. “Those are some of the things that hold people back, and these are people who don’t have a lot of options. … Once you pay your debt to society, you shouldn’t be marked for the rest of your life.”
At least Wright got the final word on it when Allard worried that “this drug is still federally illegal.”
“We don’t want to let a federal law dictate what we do in Alaska. We’re Alaskans,” he said, a grin cracking over his face.
Have an excellent Thursday, y’all.