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Austerman: Talks underway on pensions

Posted: March 17, 2014 - 11:02pm

JUNEAU — A co-chair of the House Finance Committee said he and fellow majority members are discussing possible options for addressing the state’s pension obligation.

Rep. Alan Austerman, R-Kodiak, said in a recent interview that “everything” is on the table, including possible contribution increases by municipalities, a proposal from Gov. Sean Parnell and extending the time horizon for payments.

He said there needs to be a hard look at and some kind of understanding between the state, municipalities and school districts about responsibility and “to what degree do we all have to stand to the table. That’s basically the conversations that we’re having now.”

Austerman could not say when a firm proposal might be put forth. The session is scheduled to end April 20.

Parnell proposed taking $3 billion from savings and putting it toward addressing the state’s nearly $12 billion pension shortfall.

Response to the idea has been mixed. While some lawmakers support that kind of cash infusion to help lower annual payments and take pressure off the state budget, others are wary of taking so much from savings given the current budget environment.

Austerman said the Senate is having its own conversations.

Kathie Wasserman, executive director of the Alaska Municipal League, said municipalities are attempting to become involved in the discussions.

She said local governments want the Legislature to know they’re not trying to get out of paying part of the pension liability. But she said there are concerns about the potential for raising the municipalities’ contribution share and the impact that could have on local budgets.

Austerman said asking more of municipalities would be a tough sell. But he said the state has been generous over the years in covering excess costs for municipalities and school districts.

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