- Associated Press - Monday, December 7, 2015

By The Associated Press (AP) - Here is a sampling of editorial opinions from Alaska newspapers:

Dec. 4, 2015

Ketchikan Daily News: Shifting responsibility

It appears that the State of Alaska - once again - is quietly attempting to shift many more hundreds of millions of dollars of pension liabilities onto the shoulders of Alaska municipalities and their local taxpayers.

The big question is: Will the municipalities let the state do it again?

We hope not. The stakes are huge, estimated at about $77 million combined for the Ketchikan Gateway Borough and Ketchikan School District alone. The borough is raising the alarm, and makes a convincing case that the state’s latest machinations to shift liabilities onto municipalities are neither justified, nor required by state statute.

The liabilities in question are related to the Public Employees Retirement System and Teachers Retirement System.

Now, PERS/TRS is an excruciatingly dull topic for most people. Mention it at the next holiday party and see how fast you’re left standing alone by the salmon dip.

However, the key points, much abbreviated, are as follows.

The PERS/TRS system is managed and controlled by the State of Alaska. In 2006, alarmed by rising costs and “unfunded liabilities,” the Alaska Legislature switched the state’s retirement systems from “defined benefits” to “defined contribution.” Employees who started their careers under the defined benefits system would remain in that defined benefits system.

In 2008, the Legislature required public employers (municipalities and others) to pay fixed amounts - 22 percent of payroll for PERS and 12.56 percent for TRS - to offset the unfunded liabilities related to the defined benefits pension system. The statutes put the state on the hook for the rest of the unfunded liabilities.

At first, the goal was to have the unfunded liabilities taken care of by 2030, a goal supported by the Alaska Retirement Management Board. Under that scenario, the municipalities’ requirement to pay the 22 percent and 12.56 percent would have ended by 2030.

That changed in 2014. The Parnell administration and state Legislature highlighted their lump-sum appropriation of $3 billion toward the unfunded liabilities - mostly toward TRS - but were very quiet about other changes, which included extending the amortization period from 2030 to 2039. The net effect was less cost for the state, but municipalities would end up paying many millions of dollars more than they would have otherwise.

Kris Erchinger of Seward, who was a member of the Alaska Retirement Management Board -which wasn’t pleased with the changes - expressed the situation well at the time.

“Any way you look at it, we’ve pushed those costs onto our kids and grandkids,” Erchinger told the Alaska Dispatch in June 2014. “I ran the numbers for Seward, and just to extend the amortization period was $2,000 for every man, woman and child living in Seward.”

Ketchikan’s Martin Pihl, who’s also a member of the ARM Board, was equally clear.

“I do have deep regret over what I feel is the unnecessary extension of the amortization period, bringing huge additional cost - like more than $2.5 billion to the people across Alaska - and forcing even greater numbers into state budgets down the line,” he told the Alaska Dispatch in 2014.

Having successfully shifted some of the unfunded liability to the municipalities in 2014, it now looks like the state is attempting to shift even more of its burden onto local taxpayers.

In August, the state attorney general issued an opinion that the state isn’t legally responsible for specific types of pension liabilities and thus isn’t required to carry those liabilities on its books. The state’s opinion is that those liabilities should be carried on the books of municipalities and other public employers.

The Ketchikan Gateway Borough cried “foul.” In October, Borough Attorney Scott Brandt-Erichsen drafted a 19-page deconstruction of the state’s position, concluding that those liabilities rightfully belong on the state’s balance sheets, not the borough’s.

We don’t know how this will play out yet. Should the attorney general’s view prevail, municipalities statewide could see millions of dollars of new liabilities sprouting on their accounting ledgers. An early potential result is lower municipal bond ratings and higher borrowing costs. From there, it’s a slippery slope toward having the Legislature say, hey, this debt’s on the municipalities’ books now, let’s go ahead and make the municipalities actually pay for it.

Given the state’s financial situation, its interest in shedding costly responsibilities is understandable. But the state has been the sole party responsible for the pension liabilities in question, and, as the borough points out, there appears to be no justification or requirement for unloading that responsibility onto municipalities now.


Dec. 6, 2015

Juneau Empire: Drop the Glass Tower

On Friday, the Alaska Legislature’s Legislative Council could have saved the state of Alaska $30 million.

Instead, they punted.

The Legislative Council, which conducts the Legislature’s business when that body is not in session, was considering a report about the glass tower in Anchorage that houses the Legislative Information Office in the state’s largest city.

Renting that tower costs the state $4 million per year. It has been dubbed by critics as the “Taj MaHawker” after Republican Anchorage Rep. Mike Hawker, who negotiated the state’s lease for the building, which is owned by Pfeffer Development.

Hawker used private email accounts to conduct negotiations with Pfeffer, which was selected after a no-bid process. Tara Jollie, a retired deputy commissioner of Labor, has determined that Hawker received more than $1,000 in contributions from Pfeffer employees during the period when the lease was under discussion.

All that is beside the point: The lease makes little sense.

Blocks away from the glass tower is the Atwood Building, a state-owned facility with enough (admittedly somewhat cramped) space to accommodate Anchorage’s lawmakers.

It would cost $10 million to renovate the Atwood Building for the Anchorage lawmakers’ needs for the next 10 years, according to a presentation given Friday by Sen. Gary Stevens, R-Kodiak. Keeping up the glass tower would cost $40 million over the same period. Buying the building would cost $43 million.

As the state faces a $3.5 billion annual deficit, the choice should be obvious. Unfortunately, on Friday, lawmakers didn’t think so.

After an executive session in which all reporters were kicked out of the room and down the hall - apparently, the building’s walls are too thin and PA system too loud to keep them close to a closed door - the Legislative Council decided to put off the issue until Dec. 19.

That date is after Gov. Bill Walker is required to deliver a draft state budget - a task made harder now that the Legislature has failed to act.

Extending the lease on the Anchorage LIO didn’t make sense a year ago and it makes just as little sense now. The Legislature needs to be looking at how to reduce spending, not buying unnecessary luxuries for itself.


Dec. 4, 2015

Fairbanks Daily News-Miner: Alaska delegation sponsors measure to combat pirate vessels

In Interior Alaska, hundreds of miles from the ocean, it’s a safe bet most people aren’t concerned about pirates. But as a state, pirates - specifically pirate fishing vessels - are a source of great consternation. Each year, billions of dollars in illegally harvested fish appears on world markets, causing serious financial harm to places like Alaska, where fishing is strictly regulated and commercial operators play by the rules or face strong fines, sanctions and even potential jail time depending on the nature of their offenses. A new bill signed into law by President Barack Obama last month will bring international focus to the issue of pirate fishing - and doing the lifting in Congress was Alaska’s delegation.

Sen. Lisa Murkowski, who chairs the Senate Energy and Natural Resources Committee, introduced the Senate’s version of the pirate fishing bill, which would ratify a 2009 international treaty related to the practice. She was joined by junior Alaska U.S. Sen. Dan Sullivan as a sponsor, and Rep. Don Young was a sponsor of the house version of the bill.

The bill and treaty seek to create a master list of vessels participating in the commercial fishing trade around the world, barring port access for vessels identified as having trafficked in illegally caught fish. Like most international treaties, it only works if all the relevant nations get on board, and there’s been some movement in this direction already. As of late October, a dozen countries and the European Union had signed on - the U.S. now joins that list.

Pirate fishing has long been a problem in Alaska. A prominent recent example was the Bangun Perkasa, an unflagged fishing boat interdicted off the Aleutian Islands in 2011 carrying 30 tons of illegally caught squid and a sizable population of rats. Like many pirate fishing vessels, the Bangun Perkasa had been driftnetting - sweeping the ocean with a miles-long net, catching and killing marine species indiscriminately and tossing back unmarketable fish and other sea creatures. As you can imagine, vessels fishing this way cause an incredible amount not only of economic damage to a fishery but also environmental damage to the ecosystem. And there are plenty of Bangun Perkasas that don’t get caught before offloading their catches.

The economic damage to Alaska doesn’t stop at the illegally caught fish that find their way to market. Since pirate fishing vessels are almost always unflagged, it falls to those who catch them - in the case of the Bangun Perkasa, the U.S. government - to deal with the vessels, their catch and their crew. After getting rid of the Bangun Perkasa’s squid, exterminating its rats, sending its crew members back to China and Indonesia and contracting out the scrapping of the derelict vessel, direct costs related to the vessel ran to more than a million dollars.

With those costs added to the $10 billion to $23 billion negative impact on fisheries worldwide from pirate fishing and coupled with the environmental devastation the vessels wreak, Alaska’s motivation to act is clear, and the state’s Congressional delegation did well by shepherding the pirate fishing bill to passage.

The bill in itself won’t solve the pirate fishing issue - there are clear financial incentives for the illegal fishing operations and governments more inclined to look the other way than the U.S. - but it applies a focus and pressure on the vessels that is an excellent place to start stemming the damage caused by such operations.

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