:quality(70)/cloudfront-us-east-1.images.arcpublishing.com/adn/MN5AZCI3AVH33O55HZKWVOLJJY.jpg "OPINION: Alaska state senators show the courage to lead")
On Feb. 2, the Alaska Senate acted in a manner that should inspire all Alaskans and tamp down the cynicism we often feel toward elected leaders when we believe they have ducked a hard conversation, a tough vote, or a difficult compromise for the greater good of our state. What did the Senate do? They passed Senate Bill 88, a public employee retirement bill that provides a modest pension to state employees. The matter is now before the House of Representatives.
Why is this legislation important? Alaska is no longer a competitive employer and is currently in a state of crisis trying to deliver critical public services by departments with ever-increasing vacancy rates. One in five state jobs are vacant. Nearly every leader in Gov. Mike Dunleavyâs administration stated in their fiscal year 2025 budget submittal to the Legislature that recruitment and retention of employees was their top concern.
How did we get into such a non-competitive position? Alaskaâs government opted out of Social Security in 1955, so most public employees have no Social Security benefits. Neither do most have any other supplement savings plan. Before 2005, we were still able to be competitive because we had a pension, but in 2005 we gave that away as well. Does a pension matter? Letâs ask the governor.
Michael Dunleavy, a native of Scranton, Pennsylvania, was interviewed in the Oct. 10, 2009, edition of the Scranton-Times Tribune about his Alaska teaching experience. He was then superintendent of Northwest Arctic Borough School District. Dunleavy had unqualified praise for Alaskaâs pension, saying, âThe system has been very good to me. I could retire with a retirement income that many people would envy as a working income.â Today, this is no longer the experience of our school teachers or any public employee.
The daily headlines across Alaska tell the story â police departments not able to staff shifts; schools not opening for lack of teachers; snowplow trucks sitting idle for lack of operators; and entire communities suffering from lack of food and housing due to a public assistance division that is completely underwater. It would be foolish to disguise the gravity of the situation.
Our economists at the Alaska Department of Labor and Workforce Development, researchers at the Anchorage Economic Development Corporation, Gov. Dunleavyâs Teacher Recruitment and Retention Taskforce, and state agency Commissioners are all telling us the same thing. Alaska can no longer hold onto its workforce, our pay and benefits are not competitive with other states, and we can expect a continued decline in service delivery without dramatic and determined measures to turn the tide.
Is this just a public sector problem? No. It directly impacts the private sector. A slowdown in permitting for residential and commercial building projects, roads, and other economic development activities means project viability, timelines and financing all collapse. Businesses canât open when their employees canât work because the roads arenât plowed, so schools are closed and last-minute day care for children is not an option. This public-private dynamic is a picture of the collective and individual duties we all share.
Senate Bill 88 is the culmination of 15 years of work by legislators, pension actuaries and employee groups to have a modest pension option for public employees. Alaska left pensions for 401k plans in 2005 due to bad actuarial advice that told the state to make zero employer contributions to the pension program two years in a row. This resulted in significant unfunded liability. The state won a civil judgment for $500 million against Mercer, the actuary, but the damage was done. Alaska abandoned its previously well-funded pension system which valued experience and skill for a âday laborâ cash workforce. And today we are suffering the fallout of that decision.
Is there any risk to this new pension plan? Yes, there is with any retirement plan. I would add that many of our public employees daily face significant risk for you and me as they keep our communities safe, teach our children, and plow our roads. Is the pension plan risk mitigated? Absolutely. Pension actuaries Cheiron and Pension Trust Advisors, both of whom have been responsible for helping Alaska shore up its pension system, have testified to the Legislature about the soundness of the retirement plan offered in Senate Bill 88.
This legislation has withstood withering and fallacious criticism from out-of-state advocacy groups whose handlers make their fortunes selling annuities to Alaskaâs current defined contribution system employees. These entities have zero interest in the future of Alaska, no personal stake in our well-being, no concern for our public safety, the education of our children, or the quality of our roads and infrastructure. Yet I have hope because Alaska has a quality that no one should overlook. We may have our differences, but they do not divide us as they do in most other states. We have a strong sense of taking care of our neighbor, our unique Alaskan identity, and our way of life. Bitterly cold winters, the vastness of our frontier state, a lack of roads and infrastructure, and concerns about safety and survival are common bonds that work to pull us together in times of difficulty.
Indeed, the solutions to our recruitment and retention crisis and our failed public employee retirement system will not be found in the conflict of governor vs. Legislature and Senate vs. House, but in the unity of governor and Legislature and Senate and House. The hardest problems always require tradeoffs to get the best result, and the best solutions are never partisan or the gift of a party but are produced only in the unity of Alaskans.
I am proud of Alaskaâs state senators, and I believe we can all look with confidence to Gov. Dunleavy and the House of Representatives to find common cause and solutions that keep Alaska strong and our future bright.
Dominic Lozano is the president of the Alaska Professional Fire Fighters Association, which advocates for the health, safety and interests of career firefighters and paramedics throughout Alaska.
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