OPINION: The economic imperative for Alaska pension reform

Alaska faces a crisis with hundreds of vacancies among police officers, Alaska State Troopers and teachers. Reform of our broken pension system is essential to fix this problem. If ideological special interests succeed in blocking reform, the impacts will be felt most acutely by small businesses who need adequate policing for safe streets, and all businesses who are struggling to recruit employees at a time when families are leaving Alaska due to de-funding of the public education system. This year’s election presents a stark choice: Do we fund police and schools, or allow Outside interests to destroy the most basic services that the private sector needs to thrive?

Last year, the Alaska Senate passed legislation (Senate Bill 88) to replace our broken pension system with a modern retirement system that reduces turnover and saves money for state and local governments. Police, firefighters and teachers provided detailed testimony about how the current system is driving outmigration and turnover. Department of Public Safety Commissioner James Cockrell conducted a survey of State Troopers, 80% of whom favored the adoption of a system such as that envisioned in SB88. Unfortunately, Outside special interests — funded by the very Wall Street firms that make higher fees from our broken system — narrowly blocked this bill from passing in the House. Advocates of reform attempted to bring the bill to the House floor for a vote, but those motions failed to pass by a single vote.

We are reaping the consequences of this failure today. The Anchorage Police Department has 50 vacancies. State troopers have 75 vacancies. Fairbanks and Kodiak posts have been so short-staffed that there are times of day with zero law enforcement presence. Defunding the police in this manner is catastrophic for business. At a time when the opioid epidemic and homelessness have created a new underclass of criminals and vandals, businesses desperately need adequate police presence. Instead, special interest defunding of the police leaves small businesses and homeowners exposed to the rash of vandalism and assaults that have recently plagued Midtown, Downtown and even the Legislature’s own offices in Anchorage.

The negative effect on the workforce is as profound, though more complex. Currently, Alaska has the worst retirement system in the U.S. for teachers. As a result, most teachers leave after vesting in their 401(k)s, leaving for states with a predictable retirement system. Since teachers become more and more effective during the first decade of experience, our broken pension system is depriving students of the most experienced, effective teachers. Until recently, legacy Tier 1 and Tier 2 teachers were able to blunt the impact of outmigration among newer teachers, but a wave of senior teacher retirements leaves our districts unable to fill positions. In Anchorage, the teacher shortage is so dire that long-term substitutes who don’t even have a college degree are teaching in some classrooms.

Thanks to the federal government, we have a surge in construction investment and development on the North Slope. Businesses are trying to hire, but companies are struggling to persuade families to move to Alaska or stay in Alaska when parents see massive class sizes and chaos in school districts — which is entirely the fault of anti-education special interests and their allies in the Legislature. The failure to stabilize both class sizes and the teacher workforce is the primary contributor to workforce shortages faced by Alaska employers.

In this election cycle, the Wall Street firms that profit from inefficient retirement systems are laundering money through the Koch brothers’ organization Americans for Prosperity (AFP), which is attacking both Republican and Democratic legislators who support the police, troopers and teachers.

AFP is based in Washington, D.C. For them, Alaska elections are a partisan game with no personal consequences. AFP hacks don’t clean up broken glass when criminals are throwing rocks through windows in Midtown Anchorage. AFP staff aren’t getting assaulted at local stores because far-right special interests have defunded the police. We bear the consequences of AFP’s catastrophic attacks on our public safety professionals.

AFP is spending hundreds of thousands of dollars this election cycle, and their signature issue is defunding police and firefighter retirement programs. For AFP, police and firefighters are political pawns. For Alaskans, first responders are essential public servants. Our economic future depends on rejecting these slanderous political attacks from Outside, and moving forward with pension reform so our businesses can operate in a safe environment and recruit the workers who expect good schools and safe streets for their families.

Richard Kern is a retired Alaska teacher.

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