Legislature(1995 - 1996)

04/21/1995 03:10 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 236 - REDUCTION IN STATE EMPLOYEE COMPENSATION                           
 Number 570                                                                    
 The next order of business was HB 236, "An Act relating to                    
 reductions in compensation for state officers and employees; and              
 providing for an effective date."                                             
 CHAIRMAN KOTT said he would like thank the subcommittee chairman,             
 Representative Sanders, for holding extensive subcommittee                    
 REPRESENTATIVE SANDERS said when the bill was put into a                      
 subcommittee, Chairman Kott asked them to try and find out what the           
 bill does, who it does it to, and to see what they could do to make           
 it more acceptable to the working public.  He said after ten hours            
 of public testimony and well over 1,000 letters, he feels that                
 everyone knows what they are doing and they all have a good                   
 understanding of who they're doing it to.  Now the committee needs            
 to review the numbers and see what, if anything, they can do to               
 make it acceptable to the public employees.  Representative Sanders           
 said earlier in the day he received information from Legislative              
 Research which is comprehensive.  It includes every employee in the           
 state.  Representative Sanders said, "What we need is more time,              
 Mr. Chairman, but it seems that for some reason unbeknownst to me,            
 there is no more time -- that his bill, Mr. Chairman, is so                   
 important that it must be rushed through.  I have never seen a bill           
 in my three sessions that had to move so fast with so little                  
 scrutiny, Mr. Chairman.  I just don't understand the urgency, but             
 for the unity of the majority, I am going to report this bill out             
 to the full Labor and Commerce Committee with the hope that as a              
 full committee, we can make a few adjustments that will ease the              
 pain caused by HB 236."  Representative Sanders referred to pay               
 schedules and said he would challenge anyone at the table to tell             
 him how many different pay schedules are floating around in Alaska            
 state government.  He said there are 180 different pay schedules              
 and every one of them are different.  Representative Sanders said             
 how anyone would expect the legislature to do something like this             
 in the short amount of time they have had, he doesn't understand.             
 Number 611                                                                    
 CHAIRMAN KOTT said he appreciate all the work Representative                  
 Sanders has put into the matter.  He said he doesn't believe the              
 bill is being rushed to the next committee of referral.  The bill             
 has been in the House Labor and Commerce Committee for over a                 
 Number 621                                                                    
 ART SNOWDEN, Administrative Director, Central Office, Alaska Court            
 System, came forward to testify in opposition to HB 236.  He said             
 our judges are about thirty-fifth in the nation in salary.  Over 70           
 percent of his employees within the Judiciary are range 15 or less.           
 They do not have a number of high paid employees and they would               
 respectfully seek exemption from the Judicial Branch from the                 
 application of the bill.                                                      
 Number 630                                                                    
 MARK BOYER, Commissioner, Department of Administration, came                  
 forward to testify.  He thanked the committee for giving the                  
 Administration the opportunity to testify on the bill previously.             
 The Governor felt that given the lateness in the session and given            
 what they are currently doing at the bargaining table on a daily              
 basis.... (End of Tape)                                                       
 TAPE 95-42, SIDE B                                                            
 Number 000                                                                    
 COMMISSIONER BOYER continued, .... would do to the work force.  He            
 said they are unclear of what the goals are of the proposers of the           
 legislation.  If the goals are to reduce the personal services cost           
 to state government, the Governor and the Administration are                  
 absolutely in support of that goal.  They clearly understand the              
 need to reduce personal services costs over the next few years.               
 This bill, however, they feel is the wrong way to do it.  If the              
 goal is to change the Public Employees Relations Act (PERA), this             
 bill is also the wrong way to do that.  A more appropriate way to             
 change PERA, if the goal is to not have the Administration bargain            
 at the table over wages and benefits, is for the legislature to               
 change PERA taking the mandatory term of bargaining out of the act.           
 He said the Administration is unclear as to what the goal is.                 
 Commissioner Boyer said the Governor is looking for a way to deal             
 with personal services costs without creating such havoc in the               
 labor work force.  If the bill were enacted and were allowed to go            
 into law, the Governor has suggested that he will not allow the               
 kind of disruption to the work force that this bill would cause to            
 occur.  There are alternatives to reducing personal services if               
 that is the goal.  He said he would like to work with the                     
 legislature in achieving that goal.                                           
 COMMISSIONER BOYER said the Governor is not prepared to encourage             
 the committee to go down a path that would have the Administration            
 unilaterally impose these terms and conditions on what could be as            
 many as 14,000 or 15,000 state employees.  He informed the                    
 committee that the Administration is currently negotiation with the           
 state's largest union which includes about 8,500 employees.  There            
 are three contracts that cover approximately 3,000.  If the bill              
 were passed and became law, the state would be forced to impose the           
 terms and conditions of this contract.  There would be major                  
 Number 012                                                                    
 CHAIRMAN KOTT referred to Commissioner Boyer saying that if the               
 intent is to change PERA, they should use a different vehicle.  He            
 asked if it is safe to assume that the Administration would be                
 supportive of seeking ways to improve the PERA system.                        
 COMMISSIONER BOYER said there are changes to PERA that even the               
 current Administration would like at some point in the further.  He           
 said, "I'm not suggesting in any way, shape or form that the                  
 Governor would support a wholesale change in the complexion of the            
 Employment Relations Act.  I'm not suggesting that whatsoever.  I'm           
 suggesting that if that's your interest or the interest of the                
 legislature, that there is a much more straight forward way to do             
 that and a clear delineation, if you will, in the sand on that                
 issue.  This is not very clear.  This is not a clear way of dealing           
 with that issue."                                                             
 Number 025                                                                    
 CHAIRMAN KOTT referred to Commissioner Boyer saying that the                  
 Governor has suggested that he will not allow the kind of                     
 disruption to the work force that this bill would cause to occur              
 and said that suggests a veto.                                                
 Number 039                                                                    
 REPRESENTATIVE KUBINA referred to Commissioner Boyer saying the               
 Governor is working on ways to deal with personnel costs and asked            
 if there is a bill, proposed by the Governor, that he thinks does             
 deal with personnel costs in a better way than HB 236.                        
 COMMISSIONER BOYER said they are developing a number of initiatives           
 that will be introduced during the next legislative session that              
 will deal with a number of issues.  One bill that was introduced              
 this session are a couple of tools that will be necessary in                  
 downsizing environmental.  One tool is the change in the area cost            
 differential for non covered employees.  While the fiscal savings             
 in that piece of legislation are small, the implications of the               
 application of that statutory scheme in other contract environments           
 is quite immense.  Commissioner Boyer said the second tool has to             
 do with an early retirement incentive bill that has a private                 
 sector twist to it.  The private sector twist has two pieces.  One,           
 there is a voluntary cash separation piece that was borrowed from             
 the private sector.  ARCO has used that kind of a mechanism                   
 successfully to permanently downsize its operation.  He noted that            
 there are some up-front costs, but in the ARCO example for an up-             
 front expenditure of $39 million, they've reduced their work size             
 by 30 percent for a permanent reduction in personal costs of $25              
 billion per year for as long into the future as you can see.                  
 Commissioner Boyer said they see that as a tool that should be                
 available to the state as well as the private sector.                         
 COMMISSIONER BOYER said, "The RIP (Retirement Incentive Program) is           
 a very surgical RIP.  We have an example, I hate to use this                  
 example here at the table, Mr. Chairman, but in Representative                
 Kubina's district we think that with the RIP as a tool, and the               
 voluntary separation piece as a tool, that we can craft a package             
 that when we look at Harborview Developmental Center that is in the           
 heart of his district - a hundred highly trained and skilled                  
 professionals providing services there, that as we stop doing that            
 service that we allow some of the people to RIP out of the system.            
 Some of the people whose jobs are disappearing to take a separation           
 pay.  And those people that are left at the bottom who aren't able            
 to take advantage of either one of those for one reason or another,           
 help those people through an attrition plan - move throughout the             
 system and stay employed if that is in fact what their choice is.             
 So we're hoping that you do give us the opportunity to use a couple           
 of the tools that we've introduced.  Long answer to a short                   
 Number 094                                                                    
 CHAIRMAN KOTT said he thinks it is safe to assume that the reason             
 why the bill was introduced was to close the fiscal gap and to look           
 at wages and compensation.                                                    
 CHAIRMAN KOTT said he has prepared some amendments.  Amendment 1,             
 K.5 4/20/95, exempts the courts.  He said there has been testimony            
 that our court system and those individuals that work within the              
 court system are well down the ladder compared to other states.  He           
 said there was testimony from our Supreme Court Chief Justice                 
 alluded to the fact that they are over burdened with work and we're           
 asking them to do more.  On top of that, we're asking them to take            
 a reduction in pay at a point when court employees are way down on            
 the ladder to begin with.                                                     
 Number 130                                                                    
 REPRESENTATIVE PORTER moved Amendment 1.  He explained he is                  
 familiar with the wage and benefit packages that exist in the                 
 Criminal Justice System.  He said he believes the Court System has            
 done a good job in trying to be frugal.  He said he believes                  
 Amendment 1 is an appropriate amendment and he supports it.                   
 CHAIRMAN KOTT asked if there was an objection to the adoption of              
 the amendment.                                                                
 Number 146                                                                    
 REPRESENTATIVE ROKEBERG objected for the purpose of discussion.  He           
 asked if there are other amendments.  CHAIRMAN KOTT said there are            
 four independent amendments.                                                  
 REPRESENTATIVE ELTON said he curious as to what criteria is being             
 applied to the court system.  CHAIRMAN KOTT said after listening to           
 the testimony by the court administrator as well as the chief                 
 justice and alluding to the fact how far behind our Judicial Branch           
 is as compared to other states, he thinks that with the amount of             
 work they are asked to do, it is only warranted that they be                  
 exempted from the measure.                                                    
 CHAIRMAN KOTT said Amendment 1 has been moved and asked if there              
 was an objection.  REPRESENTATIVE ROKEBERG withdrew his objection.            
 Hearing no further objection, Amendment 1 was adopted.                        
 Number 180                                                                    
 CHAIRMAN KOTT explained Amendment 2, K.6, dated 4/21/95.  He said             
 it strikes at the heart of the problem, from a public perspective,            
 that he heard from public testimony that we're cutting them 5                 
 percent, however, we're not really addressing ourselves.  He said             
 Amendment 2 conforms to many of the criticisms conveyed to the                
 committee by members of the public and that is that the legislators           
 took an increase in per diem this year.  The amendment restores the           
 per diem back to the 1993 level.  There is no option.  The per diem           
 would go back to $100 per day.  Chairman Kott said he isn't                   
 suggesting that the legislators aren't deserving of it or that it             
 isn't warranted, but in many cases it is warranted.  Every                    
 individual in the legislature has a different circumstance.  Some             
 have given up $30,000 or $40,000 a year jobs, some are maintaining            
 two households.  All that must be factored in.  He moved the                  
 Number 202                                                                    
 REPRESENTATIVE ROKEBERG objected for the purpose of discussion.  He           
 suggested an amendment to the amendment which would add a                     
 differential for the members of the legislature who are single and            
 also presently receiving state retirement income.  He suggested               
 lowering their per diem to $50 per day.                                       
 CHAIRMAN KOTT said he believes that is a hostile amendment to his             
 amendment.  He said the reason he would object to that is from a              
 constitutional perspective, we would be treating groups of                    
 individuals unequally based primarily on marital status.                      
 REPRESENTATIVE ROKEBERG said he would point out that it is the                
 policy of the state of Alaska to administer all employment benefits           
 on a differential between marital status.  That is the present                
 call.  There is nothing unconstitutional.  Representative Rokeberg            
 then withdrew his amendment to the amendment.                                 
 CHAIRMAN KOTT said under this provision, if you live within 25                
 miles of where the legislature is convened, there is no per diem.             
 CHAIRMAN KOTT asked if there was further discussion on Amendment 2.           
 REPRESENTATIVE ROKEBERG withdrew his objection.  CHAIRMAN KOTT                
 asked if there was further objection.                                         
 Number 250                                                                    
 REPRESENTATIVE KUBINA said he objects.  He explained he has gone on           
 record opposing this.  He said he thinks that the bill that it is             
 in "stinks."  He maintained his objection.                                    
 A roll call vote was taken.  Representatives Kott, Rokeberg,                  
 Porter, Masek and Sanders voted in favor of the amendment.                    
 Representatives Elton and Kubina voted against the amendment.  So             
 Amendment 2 was adopted.                                                      
 Number 269                                                                    
 CHAIRMAN KOTT referred to Amendment 3 and said the Administration             
 had testified that the bill probably doesn't get the intent of what           
 they're trying to do.  He said he agrees and thinks there are                 
 substantial problems with the measure in just making a wholesale              
 cross board cut.  It is great for this year, but in further years             
 it probably will have little affect.  Amendment 3, K.7, is to                 
 establish a three year wage freeze for all non covered employees.             
 That includes an increase of compensation based on merit for the              
 incremental annual increases.  He said we really have to hold the             
 line on wages.  Chairman Kott moved Amendment 3, K.7, dated                   
 4/21/95, be adopted.                                                          
 Number 283                                                                    
 REPRESENTATIVE ELTON objected for the purpose of a comment.  He               
 said the people who haven't gotten the wage increases are the non             
 union people as they haven't gotten a pay increase in six years.              
 He said he will do everything he can to make the bill better so               
 that if it does unfortunately move out of the House Labor and                 
 Commerce Committee, at least they'll be moving something better               
 than what there currently is.  Amendment 3 is making the people who           
 have already paid the cost pay more.                                          
 Number 294                                                                    
 REPRESENTATIVE SANDERS referred to Amendment 3 being a three year             
 wage freeze and asked if that would freeze the pay at the rate that           
 it is today and the 5 percent wouldn't apply.                                 
 CHAIRMAN KOTT said the effective date of the bill would be the                
 effective date of everything in the bill.  If non covered (indisc.)           
 a 5 percent reduction, they would get the 5 percent reduction and             
 then there would be no increase for a period of up to three years.            
 REPRESENTATIVE KUBINA said he agrees with Representative Sanders in           
 that there is a conflict.  He referred to page 3, Section 9, and              
 said still sets out a new pay scale and these are non collective              
 (indisc.) people.  He said he believes that Section 9 should also             
 be deleted.  In other words, Section 9 cuts their pay by 5 percent            
 and then a three year wage freeze is being added.  He said he                 
 believes is what would happen if the amendment is adopted is you              
 would cut their pay 5 percent and then freeze it to three years.              
 Representative Kubina asked Chairman Kott if that is his intent.              
 CHAIRMAN KOTT said that is his intent.  That is what the drafters             
 of the bill have informed him that is what would occur.                       
 REPRESENTATIVE KUBINA stated he objects.                                      
 CHAIRMAN KOTT referred ahead to a proposed Amendment 4 and said it            
 establishes a three year hiring freeze.                                       
 REPRESENTATIVE ROKEBERG asked if the freeze would apply to all the            
 wage schedules exclusive of the Alaska Court System.                          
 Number 338                                                                    
 CHAIRMAN KOTT said because of all the confusion with Amendment 3,             
 he withdrew it.                                                               
 CHAIRMAN KOTT referred to Amendment 4, K.8, and said it establishes           
 a three year hiring freeze for the Executive Branch.  He moved                
 Amendment 4.                                                                  
 Number 344                                                                    
 REPRESENTATIVE ELTON objected.  He said he is willing to vote for             
 Amendment 4 under one condition which is that the House Labor and             
 Commerce Committee refer the bill back to subcommittee so that they           
 could go back to the public and say, "We've changed the parameters            
 of this bill dramatically.  We're no longer talking about a wage              
 cut.  We're talking about something that really gets into                     
 management.  We're talking about something that really gets into              
 management.  We're talking about not being able to hire people to             
 fill critical jobs whether they're in Corrections or Public Safety            
 or something else."  Representative Elton said if the bill sent               
 back to subcommittee so that new public testimony could be taken on           
 the whole new element, he would vote for it.  If the bill isn't               
 sent back to subcommittee, he believes the committee is doing the             
 public a disservice.  The bill is being made into something much              
 more dramatic.                                                                
 REPRESENTATIVE SANDERS said he feels he could vote for the                    
 amendment because it falls in line with his philosophy as he is in            
 favor of smaller government, not cheaper government.  He said he              
 thinks the amendment helps to accomplish that.                                
 REPRESENTATIVE ELTON said he is in favor of smaller government too.           
 He said when you talk about things like this, you have to talk                
 about not only cost but value and the service that government is              
 providing.  The amendment addresses cost, but we may have a problem           
 with value.                                                                   
 Number 379                                                                    
 REPRESENTATIVE PORTER said the hiring freezes that he is used to              
 seeing have got a "fail safe" built into them that allow for                  
 emergency exceptions.  He said in review the bill, he didn't see a            
 "fail safe" that would qualify for the kind of situation that                 
 Representative Elton discussed.                                               
 CHAIRMAN KOTT referred to page l, line 8, "State agency may fill a            
 vacancy in a position if the department, commissioner or agency               
 head certifies that the agency needs to fill that specific                    
 positions to protect the health, safety and welfare of the public."           
 REPRESENTATIVE PORTER said he stands corrected and removed his                
 Number 390                                                                    
 REPRESENTATIVE KUBINA said he will have to vote against the bill as           
 it is a whole new way of looking at saving money.  No public                  
 testimony has been taken.  There hasn't been comments from the                
 department or the Administration.  There should be hearings held on           
 the bill.                                                                     
 CHAIRMAN KOTT said an agency could fill a specific position to                
 protect the health, safety or welfare of the public.  He said the             
 statement is open ended and could almost be considered to be all              
 inclusive with every conceivable problem out there.                           
 Number 413                                                                    
 REPRESENTATIVE ROKEBERG said under the terms of the welfare of the            
 public, would the University of Alaska be able to hire a professor            
 of widgets in their school of business.  CHAIRMAN KOTT said he                
 would suppose so only if they're teaching widget construction.                
 REPRESENTATIVE KUBINA said he would be more apt to be able to vote            
 on that if the rest of the bill were deleted.  He said we're going            
 from a pay cut to a hiring freeze.  He said he would like to hear             
 that debate go forward.  Representative Kubina said he has a                  
 proposed amendment that he may bring forward after all other                  
 amendments are brought up.                                                    
 Number 426                                                                    
 CHAIRMAN KOTT said Amendment 4 is before the committee and there is           
 objection.  A roll call vote was taken.  Representatives Kott,                
 Sanders, Rokeberg, Masek and Porter voted in favor of adopting the            
 amendment.  Representative Kubina and Elton voted against the                 
 adoption of the amendment.  So Amendment 4 was adopted.                       
 CHAIRMAN KOTT asked if there were additional amendments.                      
 REPRESENTATIVE SANDERS said he did have a proposed amendment, but             
 seeing the turn of events he said he would like to move to table              
 the bill until the committee has had time to study it and perhaps             
 bring it up at a later date.                                                  
 CHAIRMAN KOTT said he would object to the motion for the purpose of           
 REPRESENTATIVE ROKEBERG asked for an at ease.                                 
 An unidentified speaker said a motion to table is not debatable.              
 CHAIRMAN KOTT announced the committee would take a brief at ease at           
 4:37 p.m.  The meeting was called back to order.                              
 Number 459                                                                    
 CHAIRMAN KOTT said there is a motion to table HB 236.  The motion             
 is not debatable.  There is objection.  He asked the committee                
 secretary to take a roll call vote.  Representatives Kubina, Masek,           
 Elton, Sanders and Rokeberg voted in favor of tabling HB 236.                 
 Representatives Porter and Kott voted against tabling the bill.  So           
 HB 236 was tabled until further notice.                                       

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