A late-session attempt to salvage a proposal that would revive public employee pensions in Alaska died on Tuesday. A simple bill aimed at attracting and retaining more teachers briefly became a vehicle to get the Senate-approved pension program to the House floor.

The Senate approved a pension bill in January that didn’t advance in the House, and there hasn’t been a public sign that the House majority has had a change of heart.

Senate Majority Leader Cathy Giessel, R-Anchorage and the pension bill’s sponsor, introduced the bill’s language as a 52-page amendment to the education bill. The Senate narrowly approved the addition, but Giessel rescinded the amendment after a break.

“It didn’t seem that it was going to make for a productive end to the session,” she said on Tuesday evening after the Senate gaveled out for the day.

Her proposal for a “defined benefit” retirement system has long been a priority of unions and many lawmakers who see it as a means to address high vacancy rates for state jobs.

She said the chance that the pension reboot becomes law this year is “probably zero — but that doesn’t mean it’s not a critical issue, especially for our workforce.”

The reversal came after pushback from the Senate’s pension bill opponents.

Sen. James Kaufman, R-Anchorage, opposed the amendment because he thought it threatened the education bill, which he supports. “The only thing it achieves is crushing the underlying bill,” he said.

House Bill 230 would allow teachers interested in Alaska careers to be compensated for more of their previous experience by eliminating a cap on how many years of out-of-state teaching would be considered when setting salaries.

Rep. Rebecca Himschoot, I-Sitka, proposed the bill. She said the cap is a potential barrier to attracting teaching talent to the state.

Members of the Senate added language that allows an increase in the number of consecutive days a retired teacher may work as a substitute, a change Senate Education Committee Chair Löki Tobin said is crucial to dealing with the state’s teacher shortage because it would allow districts to use qualified teachers while they find permanent hires. There were more than 500 vacant teaching positions at the beginning of this school year.

Lawmakers also approved incentives for teachers with national board certification, an amendment that mirrors a proposal from Sen. Jesse Bjorkman, R-Nikiski.

Töbin urged support for the bill. “It empowers school districts to compete for teachers who are coming from out of state. There’s a growing body of evidence that shows that good and experienced teachers increase student achievement,” she said.

Senators passed the bill with unanimous support; it returns to the House for agreement on the changes.

Updated: 2 hours ago Published: 2 hours ago

The two largest credit rating firms issued positive reports for Alaska’s state government this spring, noting growing state budget reserves and progress on future North Slope oil projects.

S&P upgraded Alaska’s rating, while Moody’s revised the state’s rating outlook from stable to positive on April 30.

Credit ratings affect how much it costs the state government to borrow money and act as a thermometer for the health of state finances.

“It signals to the market that there’s economic activity and interest in the state,” said Adam Crum, commissioner of the state Department of Revenue.

Crum said after a previous credit rating improvement, an oil company told state officials their investors felt Alaska was a safer investment.

“We’ve heard for like 10 or 12 years, Alaska’s on the decline — we are a little bit, on the population side. But we’re starting to see a growth in the long-term picture of economic activity that we want the market to see,” Crum said. “And we want to get this like a snowball, and it gets bigger and bigger with more investment.”

The state’s credit ratings deteriorated between 2016 and 2020, then stabilized and are now improving.

In a credit opinion May 6, Moody’s Investor Services staff noted that Alaska’s Constitutional Budget Reserve grew over the past two years and the state expects it to grow modestly in the future, though it remains much smaller than it was a decade ago. The CBR is the state’s largest savings account, other than the Permanent Fund.

While the Moody’s report was largely positive, it pointed out some reasons for concern: While Alaska has kept draws from the Permanent Fund within the limit in state law, how those draws are divided between state operating expenses and Permanent Fund dividends remains unsettled.

And Alaska remains vulnerable to changes in the global oil market.

“While we may not want to implement new taxes or revenue streams, defining some of our large expenditures a little bit more clearly and a little bit more predictably are some of the things that can help us in the long term,” Crum said.

S&P upgraded Alaska to AA, its third-highest rating level, from AA-. Moody’s maintained Alaska at its fourth-highest rating level, Aa3, while changing the outlook from stable to positive.

Originally published by the Alaska Beacon, an independent, nonpartisan news organization that covers Alaska state government.