NEWS: Rep. Kawasaki Pre-Files Legislation to Help Ease the State Deficit
Using a Retirement Incentive Program Will Encourage Public Employees and Teachers to Retire Early, Saving Alaska Millions
FOR IMMEDIATE RELEASE
January 9, 2017
Juneau – Today, Rep. Scott Kawasaki (D-Fairbanks) pre-filed legislation to create a retirement incentive program (RIP) in Alaska to allow public employees and teachers to retire up to three years early through 2020. Allowing high-salaried employees to retire early will save Alaska money through lower personal costs and potentially lower healthcare costs.
House Bill 11 is an innovative policy option for state agencies, municipalities, and school districts to consider as a means to reduce payroll costs without layoffs as the state is facing a $3 billion deficit.
“Lawmakers need to embrace creative solutions in response to this fiscal crisis and massive deficit,” said Rep. Kawasaki. “A retirement incentive program is a good way to save money, shrink the government payroll, and balance the budget all while preventing layoffs. Instead of laying off the lowest paid employees, older, higher-paid employees who want to retire can choose to do so.”
Today’s pre-filed bill was originally introduced as H.B. 211 in the 29th Alaska Legislature. The revived legislation proposes a voluntary program for public employees to retire up to three years early. The bill includes a deadline for early retirement of 2020. Long-serving public employees are among the highest paid in the state due to automatic pay raises every year. In many cases, pensions paid to retiring employees would cost the state less money than their current salaries.
“This bill is about more than just cutting the deficit and helping to solve a fiscal crisis,” said Rep. Kawasaki. “This legislation seeks to solve a real fiscal problem by treating these valuable public servants fairly rather than making them scapegoats for complex economic issues beyond their control.”
Retirement incentive programs have been used three times in Alaska’s history, in 1986, 1989, and 1996. The 1996 RIP was estimated to save the state approximately $41 million.
“An RIP offer benefits far beyond just simple cost savings,” said Rep. Kawasaki. “Allowing people in upper management to retire early can open job prospects for aspiring middle managers, who often bring with them new ideas and innovative solutions. That’s just what we need in Alaska during these troubling times.”
The RIP legislation sponsored by Rep. Kawasaki is part of the first round of pre-filed legislation. The bill will be formally introduced on January 17th, the first day of the 30th Alaska Legislature.
For more information, please call Mercedes Colbert in Rep. Kawasaki’s office at (907) 465-3466.