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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Public Employees' Retirement System v. Gallant (12/29/2006) sp-6088

Public Employees' Retirement System v. Gallant (12/29/2006) sp-6088

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,


SYSTEM; TEACHERS RETIREMENT ) Supreme Court Nos. S- 11926/11945
BENEFITS, as administrator of the Public ) 3AN- 02-9748 CI
Employees Retirement System and the )
Teachers Retirement System, )
Appellants/Cross-Appellees, )
) O P I N I O N
v. )
individually and on behalf of all persons )
similarly situated, )
Appellees/Cross-Appellants. ) No. 6088 - December 29, 2006
          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, John Suddock, Judge.

          Appearances:  Stephen C. Slotnick,  Assistant
          Attorney  General, David W. M rquez, Attorney
          General,    Juneau,   for   Appellants/Cross-
          Appellees.  Linda M. OBannon, Ray  R.  Brown,
          Dillon & Findley, P.C., Anchorage, Bennett A.
          McConaughy, Michael D. Sandler, Sandler Ahern
          &     McConaughy,    PLLC,    Seattle,    for

          Before:   Bryner,  Chief  Justice,  Matthews,
          Eastaugh, Fabe, and Carpeneti, Justices.

          MATTHEWS, Justice.

          By  statute, two Alaska retirement systems pay retirees
who  reside in the state a cost-of-living allowance that adds ten
percent to their basic retirement pay.  The question presented is
whether  failing to pay a similar allowance to retirees who  live
in  high  cost areas outside Alaska violates the equal protection
clause  of  the Alaska Constitution.  We hold that  it  does  not
because  the  purpose of the allowance  encouraging  retirees  to
continue to live in Alaska by partially offsetting Alaskas higher
cost of living  is legitimate and it bears a fair and substantial
relationship to the achievement of this objective.
          Many   former   public  employees  receive   retirement
benefits  under  the Public Employees Retirement  System  (PERS).
Monthly  retirement  benefits  are  calculated  by  taking   some
percentage  of average monthly compensation and multiplying  that
amount  by years of service.1  Retirees sixty-five years  old  or
older,  or  who  first entered the system before  July  2,  1986,
residing  in  Alaska  are  entitled to a  monthly  cost-of-living
allowance (COLA) in addition to the base benefit.2  The  COLA  is
the  greater of fifty dollars or ten percent of the basic monthly
benefit.3   Public  school teachers receive  retirement  benefits
under the Teachers Retirement System (TRS).   Retirement benefits
under  TRS are calculated in much the same manner as under  PERS,
and  retiree  teachers  are eligible for a  similar  COLA.4   The
statutes  governing both systems have contained COLAs  since  the
          John  Gallant  is  a retired correctional  officer  who
receives  benefits under PERS but, because he  lives  in  Hawaii,
does  not receive a COLA.  Robert and Donna Bellmore are  retired
public  school  employees who live in Kenai and receive  the  TRS
COLA but plan to move outside Alaska in the near future.  Gallant
and  the  Bellmores (collectively Gallant) filed a  class  action
against the administrators of PERS and TRS, arguing that the COLA
residency requirement was an unconstitutional restriction on  the
right  to travel and a violation of equal protection of  the  law
under  the  provisions  of the federal and  state  constitutions.
Gallant also argued that denial of the COLA was a breach  of  the
states  contract with the members of PERS and TRS  under  article
XII,  section  7  of the Alaska Constitution.  Gallant  requested
damages  under  the  contract claim for past non-receipt  of  the
          The  parties filed cross-motions for summary  judgment.
The  superior  court  ruled  that the residency  requirement  was
invalid  on  state equal protection grounds and granted  Gallants
motion for summary judgment.5  The superior court also ruled that
Gallant  was entitled to prospective relief only and granted  the
          states cross-motion for summary judgment on the issue of damages.
          The state appeals from the grant of summary judgment to
Gallant  and  from  the  denial of its cross-motion  for  summary
judgment.   Gallant cross-appeals from the denial of  his  motion
for summary judgment as to damages.
          We  review  a  grant or denial of summary  judgment  de
novo.6  The equal protection challenge presents a question of law
to  which  this  court  applies  its  independent  judgment.7   A
constitutional challenge to a statute must overcome a presumption
of constitutionality.8
     A.   State Equal Protection and the Right To Travel
          The  Alaska Constitution provides that all persons  are
entitled to equal rights, opportunities, and protection under the
law.9   We interpret this provision to be a command to state  and
local  governments  to  treat those who  are  similarly  situated
alike.10  When equal protection claims are raised, the question is
whether  two  groups  of people who are treated  differently  are
similarly  situated and therefore are entitled to equal treatment
under   the   constitution.   In  order  to   determine   whether
differently treated groups are similarly situated, we look to the
states  reasons for treating the groups differently.  As a matter
of nomenclature we refer to that portion of a law that treats two
groups differently as a classification.11  We most often review a
classification  by  asking  whether  a  legitimate   reason   for
disparate  treatment  exists, and,  given  a  legitimate  reason,
whether  the enactment creating the classification bears  a  fair
and substantial relationship to that reason.12
          The legitimate reason inquiry is the standard level  of
scrutiny  that we apply in equal protection cases.   But  when  a
classification  is based on a suspect factor (for example,  race,
national origin, or alienage) or infringes on fundamental  rights
(for  example,  voting, litigating, or the exercise  of  intimate
personal  choices) a classification will be upheld only when  the
enactment  furthers a compelling state interest and the enactment
is  necessary to the achievement of that interest.13  We refer to
this  as  the strict scrutiny standard.  Some cases fall  between
standard scrutiny and strict scrutiny.  With respect to these  we
use  a  sliding  scale.   As  the  right  asserted  becomes  more
fundamental  or the classification scheme employed  becomes  more
constitutionally suspect, the challenged law is subjected to more
rigorous  scrutiny  at a more elevated position  on  our  sliding
scale. 14  Although theoretically there are any number of require
ments  that  could be used in cases falling between standard  and
strict   scrutiny,   we   have   in   practice   required    that
classifications  be  based  on governmental  interests  that  are
important, and, as with standard scrutiny, we have insisted  that
the   enactments   bear   a  substantial  relationship   to   the
accomplishment of their objectives.15
          In   the   present   case  Gallant  claims   that   the
classification in question burdens the right to travel.  We  have
recognized  the right to travel as a right that is  protected  by
the equal protection clause of the state constitution.16  In order
to  determine  the degree of scrutiny that should be  applied  in
          cases claiming an infringement of the right to travel, we balance
the extent of the infringement against the purpose of the statute
and  the closeness of the relationship between the means employed
by  the statute to further that purpose and the purpose itself.17
There  is an awkwardness to this approach.  In order to determine
what  degree  of  scrutiny to employ, we must address  the  whole
range of questions posed by our equal protection methodology.  In
other words, we have to quantify (a) the importance of the states
purpose,  (b)  the extent of the infringement  on  the  right  to
travel,  and  (c) the closeness of the relationship  between  the
means  employed by the statute and its purpose.  The  answers  to
these  questions  determine both the degree of scrutiny  that  we
should  employ  and whether the challenged statute  violates  the
equal protection clause.18  Although this approach is cumbersome,
we will continue to use it because it requires that we examine in
some  form the factors that should be examined in cases  of  this
     B.   The Decision of the Superior Court
          The  superior court viewed the purpose of the  COLA  as
[a]lignment  of benefits to economic conditions of  the  retirees
locale.   The court decided to employ a level of scrutiny  higher
than  standard  scrutiny  because  it  concluded  that  the  COLA
burdened  the right to travel  that is the right to live wherever
in  the  United States one chooses  because the COLA  cannot  but
tend  to  affect the destinations of choice of Alaska pensioners.
Even  using heightened scrutiny, the court found that the  states
purpose  of  equalizing  benefits was  sufficiently  weighty  and
meritorious.  But the means used to accomplish this purpose  fell
          The court found that the purpose of equalizing benefits
according to local costs of living was not sufficiently furthered
by  paying  a COLA only to those who stay in Alaska.  Recognizing
that there are now several areas of the United States with higher
costs  of  living  than  Anchorage,  the  court  concluded   that
penalizing  those  who retire to the expanding number  of  higher
cost  locales  [outside  Alaska] is  no  longer  constitutionally
permissible, if ever it were.  It followed that those  living  in
metropolitan areas where the statistical data show a higher  cost
of  living  than Anchorage, . . . are prospectively  entitled  to
receive  the [COLA].  As to other retirees living outside  Alaska
in  lower cost areas, the court indicated that they would not  be
entitled to the COLA prospectively if the legislature amended the
statutes  to  institute a constitutionally  permissible  cost-of-
living  adjustment  within a reasonable time.   Barring  such  an
amendment,  they  too would be entitled to COLA payments  because
the court had previously ruled that the residency requirement  of
the  COLA  statutes would be severable.  Thus, when the residency
requirement was stricken as unconstitutional, the rest of the law
providing  for  payment  of  the COLA  would  still  stand.   All
retirees   would  then  be  entitled  to  receive  COLA  payments
regardless  of where they lived unless the legislature  acted  to
restrict  COLA  payments  to  Alaska retirees  and  those  living
outside Alaska in high cost-of-living areas.
          The  superior  court  gave  the  following  account  of
          comparative living costs in Alaska and in locations outside the
          According to one study the cost of living  in
          Anchorage   is  107%  of  a  standard   city.
          Plaintiffs  aver  that 25% of  departed  PERS
          retirees select the state of Washington.  The
          cost  of living in Seattle is about 120%  the
          cost  of  living in Anchorage.   Honolulu  is
          138.5%  of  the  standard city,  or  129%  of
          Anchorage.1. . .
               The  State  points out, using  the  same
          data,  that the composite cost of living  for
          lower  income households in Alaska  is  12.5%
          above  the  national average.  The  composite
          cost  of  living  index for Alaska  is  28.2%
          higher than the national average, higher than
          all   states  but  California,  New   Jersey,
          Hawaii, and the District of Columbia.[19]
          1  American  cities  with higher  costs  than
          Anchorage  include New York (Manhattan),  San
          Francisco,  Jersey City, San Jose,  Honolulu,
          Seattle,   Stamford-Norwalk,  Bergen-Passaic,
          Oakland,   Chicago,   Newark-Elizabeth,   San
          Diego,  Los  Angeles-Long  Beach,  Washington
          D.C./suburban  Maryland,  Middlesex,  Boston,
          Framingham-Natick, and Nassau County.
The  court  also observed that [o]f 26,000 PERS and  TRS  benefit
recipients,  62% live in Alaska, and 38% outside.   According  to
the  state,  only 3% of benefit recipients live in  locales  with
higher costs of living than Alaska.
     C.    The COLA Residency Requirement Does Not Violate  Equal
          We  proceed to examine the three inquiries required  by
the  method of analysis that we have employed in equal protection
cases involving a claimed violation of the right to travel.
          1.   The purpose of the COLA and its importance
          The  main  purpose of the COLA according to  the  State
Division  of  Retirement and Benefits is to assist retirees,  who
elect to remain in the state, to defray the higher cost of living
in Alaska.20  The state contends in its opening brief that this is
a legitimate purpose in itself and that enabling retirees to stay
in the state after they retire also benefits public employers:
          Consistent with promoting public service, the
          COLA  helps  attract qualified employees  who
          wish  to  make Alaska their home  even  after
          retirement.  Employees who plan to remain  in
          Alaska  after retirement are also less likely
          to  leave their jobs, and the public interest
          is  served  when  experienced  employees  are
          retained.   The public also benefits  because
          these   employees  will  tend  to   be   more
          committed to the states long term interests.
          Gallant   disagrees  that  the  COLA  is  intended   to
encourage retirees to continue to reside in Alaska.  He cites the
stated purpose of PERS:
               The  purpose  of  this  chapter  is   to
          encourage  qualified personnel to  enter  and
          remain  in  the  service of the  state  or  a
          political  subdivision or public organization
          of the state by establishing a system for the
          payment of retirement, disability, and  death
          benefits to or on behalf of the employees.[21]
But  he  does  not acknowledge that paying a COLA to retirees  is
related  to this purpose or that encouraging them to continue  to
reside in Alaska is a legitimate purpose.  Gallant mentions  only
one  purpose that the COLA has:  to preserve the buying power  of
retirement  dollars  by compensating for  high  living  costs  in
          We  agree with the state that the main purpose  of  the
COLA is to encourage retired public employees to continue to live
in  the  state  by helping to defray the higher cost  of  living.
This  conflicts with the superior courts conclusion that the COLA
was  broadly  meant  to equalize the value  of  state  retirement
benefits regardless of whether retirees choose to live in  Alaska
or  some  other high cost location.  We think that the fact  that
the  COLA  statutes have always provided that the  COLA  is  only
available  to retirees who continue to live in the state  renders
untenable the superior courts conclusion.  Gallants statement  of
the  COLA  purpose  compensating for high living costs in  Alaska
also  conflicts with the superior courts geographically unlimited
conception  of the purpose of COLA payments.  Further,  when  one
asks  why  the  legislature might have wished to pay  a  COLA  to
retirees  in  order, as Gallant would have it, to compensate  for
high  living costs in Alaska, the only plausible answer  is  that
given by the state:  to encourage retirees to continue to live in
Alaska.   Retirees  not  living in Alaska  have  no  need  to  be
compensated for Alaskas high living costs.
          How  important  is this purpose?  We believe,  for  the
reasons that follow, that it is at least legitimate.  The  policy
of  encouraging Alaskans to continue to reside in Alaska  is  one
that the legislature has pursued in other contexts.  As we stated
in State, Department of Revenue, Permanent Fund Dividend Division
v.  Cosio,  one of the three main purposes of the Permanent  Fund
Dividend  Program  is  to  encourage persons  to  maintain  their
residence  in  Alaska and to reduce population  turnover  in  the
state.22  We recognized in Cosio that this purpose was legitimate.23
Likewise, the Longevity Bonus Program was also enacted  for  this
purpose:   Alaskas  longevity bonus program was  enacted  by  the
Alaska  Legislature  in  1972 for the  purpose  of  providing  to
Alaskans  age sixty-five years and older an incentive to continue
to live in Alaska.24
          The  legislature  could readily view as  desirable  the
goal  of  encouraging retired public employees to remain  in  the
state.   As a class, they tend to be responsible and economically
stable  citizens.  They make minimal demands on such  big  ticket
government  items  as public education and law enforcement,  they
have  generally  comprehensive health insurance, and  they  often
positively  contribute to society by volunteering  in  charitable
and civic endeavors.  Further, retirees contribute to the economy
when  they remain in the state, spending the money that they have
earned during their working lives.
          2.   The relationship between the COLA and its purpose
          Given  that  the  COLA is designed to encourage  public
employee   retirees  to  continue  to  live  in  the   state   by
neutralizing  or lessening the incentive to move from  the  state
created by Alaskas high living costs, what can be said about  the
COLA  as a means to that end?  We conclude that it is fairly  and
substantially related.
          As  the  statistics referred to by the  superior  court
show,  the cost of living in Alaska is still substantially higher
than  the  average  cost  of living in the  United  States.   The
decision  of  a retired person to stay in the state  or  move  to
another one can be influenced by many factors.  Some of the  most
important  are the location of close relatives and  friends,  the
desire to remain a part of the community in which the retiree has
worked   and   lived  for  many  years,  weather,  cultural   and
recreational resources, income, and the cost of living.   To  the
extent   that  cost  of  living  is  a  factor  that  creates   a
disincentive  to stay in the state, the COLA works to  neutralize
it by increasing income.
          The  disincentive to remain in Alaska  caused  by  high
costs is not undercut by the fact that there are now a number  of
metropolitan areas outside Alaska with higher living costs.   The
cost  of living in most areas of the United States is still lower
than  in Alaska, and in many areas it is much lower.25  Thus  the
rationale  for  neutralizing the incentive to move still  exists.
Further,  insofar  as economics are a factor in  decisions  about
where  to live after retirement, the COLA seems well designed  to
achieve its purpose because it does defray to some extent Alaskas
high living costs. We think the COLA can readily be described  as
having a fair and substantial relationship to its purpose.
          3.   Nature and extent of the infringement
          The  COLA  of course is intended to influence  retirees
decision-making as to where to live after retirement.  It can  be
said  then  that  to  the extent that the COLA  is  effective  in
causing  retirees to remain in the state, it also works to  deter
them  from  exercising their right to live elsewhere.   We  think
that this is acceptable because the COLA is reasonably related to
the  cost-of-living differential between Alaska  and  most  other
areas  of the United States and because the COLA is a small  part
of retirees retirement income.
          The  fact  that Alaska still has a higher  living  cost
than  most  other  areas in the United States  has  already  been
discussed  and  is reflected in the statistics  employed  by  the
superior  court.  The fact that there are currently a  number  of
          metropolitan areas in the United States with higher living costs
than Anchorage   though not necessarily Bush Alaska  simply means
that there is a cost disincentive for retirees to retire to those
areas.   This is an effect independent of the COLA.  That is,  if
all  retirees  were  paid a bonus of ten percent  of  their  base
retirement  regardless of where they chose to live,  there  still
would be a cost disincentive to retire to high cost areas such as
Honolulu  or Seattle.  No Alaska program needs to be designed  to
make up for the high cost of living in such areas.
          At its core, the right to travel appears to be implicit
in  the federal structure of our national government.  The  right
of  free  interstate migration finds its unmistakable essence  in
that  document that transformed a loose confederation  of  States
into one Nation.26  Care must be taken to avoid imposing a penalty
on  free  migration  that would conflict with the  constitutional
purpose  of  maintaining a Union rather than  a  mere  league  of
States.  27  The difference between a prohibited penalty  and  an
allowance that neutralizes general cost-of-living differences may
only  be  a  matter of degree.  If so, we think that the  current
COLA  program does not exceed acceptable limits for two  reasons.
First,  as  already  noted, the ten percent  COLA  is  reasonably
related to the current cost-of-living differential between Alaska
and  most other areas of the United States.  Second, the cost-of-
living  allowance  is  a  small amount  only  ten  percent  of  a
retirees  regular  monthly  benefit.   Moreover,  relative  to  a
retirees actual state-related retirement income, the COLA is less
than  ten percent because most public employees have supplemental
retirement  income  from employer-sponsored defined  contribution
          We  do not mean to suggest that the state would be free
to  design a public retirement program under which retirees would
forfeit a substantial portion of their retirement pay should they
decide  to move from the state.  Any such program would  properly
be viewed with suspicion as a potential threat to the core values
underlying  the  right of free interstate  migration.   If  every
state adopted similar programs, the character of our nation would
be   changed  and  retirees  effectively  might  be  barred  from
migrating  to  other states.  But because the COLA  payments  are
related  to  current cost-of-living differentials between  Alaska
and most of the rest of the United States, and because they are a
small  part  of retirees retirement income, we do not think  that
they infringe substantially on the right to travel.
          In Alaska Pacific Assurance Co. v. Brown, we reviewed a
statute  that adjusted and reduced workers compensation  benefits
for  workers who had moved out of the state.28  The reduction was
made in proportion to the ratio of the Alaska average weekly wage
to  the  average weekly wage in the workers state of residence.29
The  reductions could be significant.  The worker  in  Brown  had
moved from Alaska to California.  If he had remained in Alaska he
would  have  received  $551.86 per  week,  but  as  adjusted  his
benefits  were reduced to $211.91 per week.30  We noted that  the
purpose  of  the  statute was to adjust  benefit  levels  to  the
economic  environment where recipients lived and that one  reason
for  this  was  to avoid paying benefits that were so  high  when
          compared to a workers actual living costs that they amounted to a
disincentive  to return to work.31  Accepting the  legitimacy  of
these  purposes,  we held that the statute was  unconstitutional,
finding  it  to be not well designed to achieve the objective  of
adjusting  benefits to the cost of living of  workers  who  lived
outside  the state.32  This was because the statute did  not  use
cost-of-living statistics from other states; rather it used  wage
levels  which  tended  to yield an average benefit  reduction  of
approximately 142% of the reduction in the cost of living.33
          There  are at least two important points that serve  to
distinguish Brown from the present case.  The first is the amount
of  the  potential  reduction in benefits.  In the  present  case
benefits  cannot  be  reduced by more than ten  percent,  whereas
benefits  under the statute in Brown were subject to a  reduction
of more than sixty percent.  The second point is that the purpose
of  the  statute  in  Brown was to equalize real  benefit  levels
between  the workers place of residence and Alaska.  This purpose
necessarily  focused on the living costs in the particular  state
where  the  worker lived.  Here the purpose is to neutralize  the
incentive  to  migrate from Alaska.  This purpose  only  requires
that  we  focus on the general cost-of-living discrepancy between
Alaska and most other states.
          The   purpose  of  the  PERS  and  TRS  COLA   payments
encouraging retired public employees to remain in the  state   is
legitimate.   COLA  payments  are a  means  that  is  fairly  and
substantially related to that purpose.  They do not substantially
infringe  on  the  right of member retirees  to  live  elsewhere.
Considering these determinations, we conclude both that  standard
scrutiny  is  appropriate  and that  limiting  COLA  payments  to
resident retirees does not violate the equal protection clause of
the Alaska Constitution.  Therefore, the judgment of the superior
court  is  REVERSED,  and  this  case  is  REMANDED  for  further
proceedings consistent with this opinion.34
     1     AS  39.35.370(c).   Between two  and  two-and-one-half
percent  of monthly salary is used for the calculation, depending
on the date of employment.

     2    AS 39.35.480(a).

     3    AS 39.35.480(a).

     4     AS  14.25.110(d) (calculation of retirement benefits);
AS 14.25.142 (COLA).

     5    The court rejected the states argument based on article
I,  section  23,  that  only the more relaxed  standards  of  the
Federal Constitution should be applied.  Section 23 provides that
the Alaska Constitution does not prohibit the State from granting
preferences,  on the basis of Alaska residence, to  residents  of
the  State  over  nonresidents to the  extent  permitted  by  the
Constitution of the United States.  On appeal the state continues
to  argue, in addition to its argument concerning the application
of  the  equal protection clause of the state constitution,  that
section  23 applies.  Because we conclude that the COLA does  not
violate  equal  protection under the Alaska Constitution,  it  is
unnecessary  for us to determine whether article  I,  section  23

     6     Alaska  Civil Liberties Union v. State, 122 P.3d  781,
785 (Alaska 2005).

     7    Id.

     8    Id.

     9    Alaska Const. art. I,  1.

     10     Gonzales v. Safeway Stores, Inc., 882 P.2d  389,  396
(Alaska 1994).

     11    Id.

     12    Id.

     13    Id.; State v. Ostrosky, 667 P.2d 1184, 1192-93 (Alaska

     14    State, Dept of Revenue, Permanent Fund Dividend Div. v.
Cosio,  858  P.2d 621, 629 (Alaska 1993) (quoting  Ostrosky,  667
P.2d at 1192-93).

     15     Stanek v. Kenai Peninsula Borough, 81 P.3d  268,  270
(Alaska  2003).   In  this respect our review  in  cases  falling
between  standard  and  strict  scrutiny  has  been  similar   to
intermediate scrutiny analysis under the Federal Equal Protection
Clause.  Cosio, 858 P.2d at 626.

     16     Church v. State, Dept of Revenue, 973 P.2d 1125, 1131
(Alaska 1999);  Brodigan v. Alaska Dept of Revenue, 900 P.2d 728,
734  n.13 (Alaska 1995); Alaska Pac. Assurance Co. v. Brown,  687
P.2d 264, 271 (Alaska 1984).

     17    Brown, 687 P.2d at 271 n.10  (citing Williams v. Zobel,
619  P.2d 448, 453 (Alaska 1980), revd on other grounds, 457 U.S.
55 (1982)).

     18    This was recognized, at least implicitly, in Brown, 687
P.2d at 272:

          The parties contentions regarding whether the
          right to travel is burdened by [the statutory
          section  in question] and the extent of  that
          burden  are related both to the selection  of
          the  standard of review and the  question  of
          whether  the  statute is fairly  designed  to
          accomplish  its purposes.  We will  therefore
          defer  discussion  of  this  point  until   a
          discussion of the statutory purposes.
     19     The court observed that the parties did not agree  on
the  validity and purport of the statistical data, but the  court
used the statistics as illustrative of scope.  We use them in the
same way.

     20     State  of  Alaska,  Alaska Retirement  and  Benefits,   (last   visited
July 28, 2006).  In its brief the state argues:

          A high cost of living is a disincentive for a
          retiree  on  a  fixed  income  to  remain  in
          Alaska,  because the retiree can obtain  more
          for    his    or    her   income   elsewhere.
          Accordingly, in the early years of statehood,
          the State of Alaska determined to reverse  or
          at  least  ameliorate  this disincentive  for
          public  employees  by providing  a  COLA  for
          retired  public  employees who  stay  in  the
     21     AS 39.35.010(a).  Parallel language pertaining to TRS
appears in AS 14.25.012(a).

     22    858 P.2d at 627.

     23      Id.    As   a  general  proposition  this   is   not
controversial,   for,  as  Justice  Brennan  explained   in   his
concurring  opinion  in Zobel v. Williams,  457  U.S.  55,  67-68
(1982),  a  state  may make residence within its boundaries  more
attractive by offering direct benefits to its citizens.

     24    Simpson v. Murkowski, 129 P.3d 435, 437 (Alaska 2006).

     25     According  to the Department of Labor  and  Workforce
Development  publication  Alaska Economic  Trends,  submitted  by
Gallant  as  an  exhibit  in support of his  motion  for  summary
judgment,  living  in  Alaska can cost  substantially  more  than
living  in  other areas.  Anchorage is over twenty  percent  more
expensive  than  many  other cities, including  Phoenix,  Dallas,
Orlando,  and  Montgomery.  Other Alaskan cities  are  even  more

     26     Attorney  Gen. v. Soto-Lopez, 476 U.S. 898,  902  n.2
(1986) (Brennan, J., plurality opinion) (quoting Zobel, 457  U.S.
at 67 (Brennan, J., concurring)).

     27    Zobel, 457 U.S. at 73 (OConnor, J., concurring).

     28    687 P.2d at 266.

     29    Id. at 267.

     30    Id. at 268.

     31    Id. at 272.

     32    Id. at 273-74.

     33    Id. at 274.

     34    This decision moots the cross-appeal.

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