Legislative deadlock breaks although important issues remain unresolved

House rejects bill to switch retirement systems for workers

Posted: Wednesday, May 18, 2005

The Alaska House on Tuesday voted down two of the Senate's priority bills that Republican leaders had kept from reaching the floor during a standoff between the two chambers.

The Senate also sent the House a capital budget on Tuesday.

While the deadlock that has defined the special session may have loosened, none of the matters that caused the logjam have been fully resolved.

The House rejected 18-22 a bill to switch the state's two retirement systems over to defined contribution plans with 401(k)-type investment accounts for future workers.

House members also failed to pass a bill to change the state's workers' compensation laws. That bill failed 20-20 after a lengthy debate Tuesday night.

But House members can change their minds today by rescinding their Tuesday votes and adopting either bill or both. Also, disagreement over the capital budget figures to be the next point of contention - one that has the potential to stretch the special session out another week or longer, House and Senate leaders said.

"It's not over until I'm dancing with my wife and hugging my kids," said House Minority Leader Ethan Berkowitz, D-Anchorage.

Senate Republican leaders kept the capital budget bill from going to the House even though they approved it May 9. They planned to hold the proposed capital projects list until the House passed the retirement and workers' compensation bills, and they were satisfied House Finance Committee members would not slash their budget proposal. The House in turn kept the workers' comp and retirement bills from reaching the floor for a vote until the budget bill was transmitted.

The result was a standoff that closed-door negotiations between the two chambers and the governor's office had not been able to break until Tuesday.

Senate President Ben Stevens, R-Anchorage said Senate leaders decided to break the impasse because there was no point in going any further with capital budget negotiations with the House.

Plus, House leaders had promised Gov. Frank Murkowski's chief of staff, Jim Clark, that the retirement and workers' compensation bills would go to a vote Tuesday.

Senate Republican leaders have called the retirement bill their priority this legislative session, saying it is a first step to fix the problems of the state's two retirement systems. After that step is taken, the $5.7 billion shortfall the two systems face can be dealt with, they say.

Opponents of the bill, which include several House Republicans, believe the defined contribution system is unsound and unproven. It puts all the retirement risk on the workers, who have to choose how to invest their accounts, they say.

The workers' compensation bill introduced by the governor is meant to freeze or at least arrest the cost to employers. But critics of the bill say it has errors that would benefit neither injured workers nor the doctors who treat them, and could leave employers open to civil lawsuits.

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