Legislature(2009 - 2010)HOUSE FINANCE 519

04/11/2010 12:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 6:30 pm Today --
+ HB 296 ENERGY EFFICIENCY BONDS; LOANS; FUND TELECONFERENCED
Moved CSHB 296(ENE) Out of Committee
+ HB 416 PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS TELECONFERENCED
Moved Out of Committee
*+ HB 421 PUBLIC EMPLOYEE SALARIES TELECONFERENCED
Heard & Held
+= HB 424 G.O. BONDS FOR EDUCATION PROJECTS TELECONFERENCED
Moved CSHB 424(FIN) Out of Committee
+ SB 199 MEDICAID COVERAGE FOR DENTURES TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 421                                                                                                            
                                                                                                                                
     "An Act relating to the  compensation of certain public                                                                    
     officials,  officers,  and  employees  not  covered  by                                                                    
     collective bargaining agreements;  and providing for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
2:05:16 PM                                                                                                                    
                                                                                                                                
KEVIN   BROOKS,    DEPUTY   COMMISSIONER,    DEPARTMENT   OF                                                                    
ADMINISTRATION,  reported  that negotiations  had  concluded                                                                    
resulting in voluntary agreements  between the state and the                                                                    
five unions  that represent state  employees. He  noted that                                                                    
HB  421 provided  a similar  wage  increase for  non-covered                                                                    
employees  in  the   executive,  legislative,  and  judicial                                                                    
branches.                                                                                                                       
                                                                                                                                
He summarized  the contents of  the legislation  by section.                                                                    
Section 1, of the bill  represents a two percent increase to                                                                    
the FY  2010 salary  schedule to begin  in FY11.  Sections 2                                                                    
and 3,  of the  bill provide for  similar increases  in FY12                                                                    
and 13.  Section 4,  addresses a  similar wage  increase for                                                                    
employees of  the executive branch. Section  5, provides for                                                                    
a  comparable  two percent  increase  for  employees of  the                                                                    
court  system.  He  pointed  out   that  the  executive  and                                                                    
judicial branches  do not use  the legislature's  wage range                                                                    
classification. Section 6, clarified  that the University of                                                                    
Alaska  employee's  wage  increases are  determined  by  the                                                                    
Board of Regents. Section 7,  provides for an effective date                                                                    
of July 1, 2010.                                                                                                                
                                                                                                                                
                                                                                                                                
Co-Chair Stoltze  announced that the wage  increase does not                                                                    
apply to elected officials. Mr. Brooks affirmed.                                                                                
Representative  Austerman  asked  for clarification  of  the                                                                    
wage increase.  Mr. Brooks restated  that the  wage increase                                                                    
was two percent for FY 2011, FY 2012, and FY 2013.                                                                              
                                                                                                                                
2:08:43 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker questioned the wage  increase when the state                                                                    
economy  is  struggling  and with  record-high  unemployment                                                                    
rates. Mr. Brooks  replied that the department  was aware of                                                                    
the  economic  climate  and the  issues  were  prevalent  in                                                                    
discussions  with the  labor unions.  The contracts  reached                                                                    
with unions  were relatively modest compared  with contracts                                                                    
in past years.  He argued for parity  for similarly situated                                                                    
state employees not covered by unions.                                                                                          
                                                                                                                                
Co-Chair Hawker appreciated acknowledgement of the dilemma.                                                                     
He  believed the  court system  employee's compensation  was                                                                    
relatively low.  He wondered if  it was possible  to approve                                                                    
the  fiscal  note for  the  court  system  but not  for  the                                                                    
executive and legislative branches.                                                                                             
                                                                                                                                
2:12:03 PM                                                                                                                    
                                                                                                                                
Mr. Brooks expressed uncertainty  regarding the procedure to                                                                    
make the change.                                                                                                                
                                                                                                                                
Co-Chair Hawker wondered what would  happen if the committee                                                                    
passed out the bill but zeroed  out the fiscal notes for the                                                                    
executive and legislative branches.  Mr. Brooks thought that                                                                    
the  money would  have to  be  taken from  other sources  of                                                                    
funding in  the executive and legislative  budgets. The bill                                                                    
would authorize  the expenditure  for all three  branches of                                                                    
government.                                                                                                                     
                                                                                                                                
Representative Kelly  asked what  the rate of  inflation was                                                                    
estimated  to  be  in  the  next  three  years.  Mr.  Brooks                                                                    
reported that the department did  not attempt to project the                                                                    
consumer  price   index  (CPI)  in  relation   to  the  wage                                                                    
increases.                                                                                                                      
                                                                                                                                
Representative Fairclough  cited page 37, Article  12 of the                                                                    
Alaska  Constitution that  addresses the  merit system.  She                                                                    
asked if  the wage  increases in  HB 421  were based  on the                                                                    
merit system  as described in  the constitution.  Mr. Brooks                                                                    
believed that  it was consistent  with Article  12. However,                                                                    
the  wage increases  were  mostly  associated with  cost-of-                                                                    
living adjustments.                                                                                                             
                                                                                                                                
Representative Fairclough  opined that  it was  difficult to                                                                    
award  merit  pay  to   outstanding  employees  through  the                                                                    
established system. Mr. Brooks  thought that the state's pay                                                                    
system was  consistent with the  merit principals  set forth                                                                    
in the constitution.                                                                                                            
                                                                                                                                
2:16:35 PM                                                                                                                    
                                                                                                                                
Representative  Fairclough hypothesized  the situation  of a                                                                    
zero-based  budget   without  increases  and  asked   if  an                                                                    
administrator had  the flexibility  to change  an employee's                                                                    
pay  within  the existing  structure  by  changing steps  or                                                                    
ranges.  Mr.  Brooks  stressed  that  it  was  important  to                                                                    
distinguish  between statutory  employees and  those covered                                                                    
under  collective  bargaining   agreements  [unionized].  He                                                                    
affirmed   that   the   rate   of   pay   can   be   changed                                                                    
administratively through individual job reclassifications.                                                                      
                                                                                                                                
Representative  Gara  relayed  that   the  average  rate  of                                                                    
inflation  over the  last three  years was  2.7 percent.  He                                                                    
believed that a "meager" two  percent wage increase fails to                                                                    
keep up  with the cost of  living. He was supportive  of the                                                                    
increase and wished it was higher.                                                                                              
                                                                                                                                
Representative   Austerman  asked   when  the   last  salary                                                                    
increase was.  Mr. Brooks answered  that the  previous three                                                                    
fiscal years had increases of  five and one half percent the                                                                    
first  year  and  three percent  the  following  two  years.                                                                    
Representative  Austerman asked  if the  inflation rate  was                                                                    
2.7 percent over the last three years. Mr. Brooks affirmed.                                                                     
                                                                                                                                
2:20:27 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker  pointed  to  Section 6  of  the  bill  and                                                                    
inquired  about  the  absence  of  a  fiscal  note  for  the                                                                    
University  of   Alaska.  Mr.   Brooks  answered   that  the                                                                    
University of  Alaska was not  included in HB  421. Co-Chair                                                                    
Hawker wondered why the Section  exists. Mr. Brooks supposed                                                                    
it was  a clarifying  section. He implied  that it  could be                                                                    
removed.                                                                                                                        
                                                                                                                                
Co-Chair  Hawker wondered  if the  rules that  determine how                                                                    
the  legislative  branch  sets   the  range  increments  are                                                                    
referenced in  the legislation. Mr. Brooks  related that the                                                                    
legislative staff pay rules are  covered under the reference                                                                    
to Title 24 on page 1, line 9 of the bill.                                                                                      
HB  421  was  HEARD  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
Energy Savings Performance Contracting Summary-DOT.pdf HFIN 4/11/2010 12:30:00 PM
HB 296
HB 296 AHFC SEP BondsL Sec Analysis.pdf HFIN 4/11/2010 12:30:00 PM
HB 296
HB 296 SEP bonds Sponsor Statement[1].pdf HFIN 4/11/2010 12:30:00 PM
HB 296
HB416 Sectional Analysis ver R.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Sponsor Statement ver R.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents History UMIFA and UPMIFA.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents UPMIFA_map.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Letter AG 3-18-10.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Letter AG 3-18-10.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Letter Foreaker Group.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Why Adopt UPMIFA.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
10 HB 421 FN - pay raise 2010.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
HB421-LEG-LEG-3-30-10NEW.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
HB 421 Gov Transmittal Letter.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
hearing_req_HB421_040710.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
SUmmary by Dept hb 421 SB 310.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
SB 310
H FIN letters of support.pdf HFIN 4/11/2010 12:30:00 PM
SB199-DHSS-MAA-2-9-10.pdf HFIN 4/11/2010 12:30:00 PM
SB 199
SFIN backup information.pdf HFIN 4/11/2010 12:30:00 PM
SB 199
sponsor statement.pdf HFIN 4/11/2010 12:30:00 PM
SB 199
HB421-Ex Branch-4-8-10.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
CSHB424(FIN)-DOR-TRS-4-10-10 GO Bonds for Education.pdf HFIN 4/11/2010 12:30:00 PM
HB 424
HB 424 Sample Ballot.pdf HFIN 4/11/2010 12:30:00 PM
HB 424
CS WORKDRAFT HB424 (FIN) P VERSION and Sectional.pdf HFIN 4/11/2010 12:30:00 PM
HB 424