School officials question legality of plan to shift teacher retirement costs to municipalities
School officials across the state are questioning the constitutionality of a bill that would make local school districts pick up more of the tab on the Teachers Retirement System, known as TRS.
Article XII, Section 7 of the Alaska State Constitution is vague about who should pay. It says the state or its political subdivisions, like municipalities, must maintain the contracts and can’t diminish or impair the system. Some superintendents argue that pushing costs onto communities that can’t afford them could impair the program.
Anchorage School District Superintendent Ed Graff said the bill, Senate Bill 207, would shift about $20 million back onto the district, prompting increased taxes for the municipality and teacher layoffs.
“When you look at what it does to our district, it’s equivalent to having to lay off 200 teachers,” Graff said in an interview Wednesday. “And that’s not just the Anchorage School District that will be impacted by these bills, that’s statewide. And the devastation will certainly be felt by every school district because there are also many rural districts that don’t have the ability to address this through taxation.”
Smaller school districts, like the Northwest Arctic Borough, said the bill would hit them even harder.
“We don’t have a tax base here,” said Annmarie O’Brien, superintendent of the NAB School District. “The tax base is the Red Dog Mine, and that goes to the borough, and then the borough in turn gives to us the required portion of that. But there’s nothing else to draw from here.”
The sentiment was echoed by Dave Piazza, superintendent of the Southwest Region School District, a regional education area in Bristol Bay, also without a tax base. After cutting core programs, Piazza and O’Brien say they could be forced to lay off teachers that are already hard to recruit and maintain.
O’Brien said some schools in her district only have four teachers for a student body of 40.
“And that’s the lead teacher who also assumes some special education responsibilities,” she said. “And then breaking it up into primary, intermediate, and high school. So, where do you cut from a situation like that?”
O’Brien said it’s a burden her district shouldn’t have to bear.
“It is the state’s obligation, constitutional obligation, to fund the public schools. It can’t designate other entities to take that responsibility over,” O’Brien said.
The Senate Finance Committee introduced a separate bill, Senate Bill 208, to eliminate the Alaska education grant program and the Alaska performance scholarship program. The intent is to use that money to offset increased costs to districts over the next five years.
“This bill in particular gives them time, and it really doesn’t hit them that hard. As a matter of fact, it has no impact this year,” Sen. Pete Kelly told reporters at a press conference Monday. But Graff called it one-time money.
“What does that look like after the five-year period if there’s not a fully supported investment of an endowment to address this financial burden?” Graff asked. “It’s going to become the responsibility of the districts, and that is not what it should be. This is a constitutional responsibility that the state has, and so I encourage their reconsideration and review of that so that we don’t have this devastation happening to our districts this year and in the future.”
When asked whether he thought the municipality could simply refuse to pay, Graff replied, “Those are conversations that I think the mayor would certainly want to be involved in.”
A spokesperson for the Anchorage School District told KTVA it’s too early to say whether the district would sue if the bill became law.
Statewide school district and municipal organizations said they understand the need to cut, but claim the proposal pushes a state responsibility onto them and, ultimately, taxpayers. Kathie Wasserman, executive director of the Alaska Municipal League said she wishes they’d been consulted.
“I watched some of the legislators increase the oil tax credits and call the oil companies in to see what their reaction was,” said Wasserman. “I don’t understand why we, as partners, don’t get the same sort of treatment.”
David Teal, director of the Legislative Finance Division, said while it is not specified in the constitution, state laws do require employers to cover payments.
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