Legislature(2017 - 2018)BARNES 124
03/07/2018 03:15 PM LABOR & COMMERCE
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HB 309-REJECT OFFICERS COMP. COMMISSION REPORT 3:22:52 PM VICE CHAIR WOOL announced that the first order of business would be HB 309, "An Act disapproving all recommendations of the State Officers Compensation Commission relating to the compensation, benefits, and allowances of state officers; and providing for an effective date." 3:23:04 PM CHAIR SAM KITO, Alaska State Legislature, testified in the hearing on HB 309 by continuing his presentation where he left off in the previous hearing. CHAIR KITO reviewed slide 8, "Current Compensation": Base Salary $50,400 Per diem based on federal short-term rate Relocation expenses provided Travel per diem provided Non-Juneau Base = $75,150 Juneau Base = $68,692.5 Total All Legislators Base = $4.49 Million 3:23:59 PM REPRESENTATIVE KITO moved on to slide 9, "Option A": Base Salary $42,000 Per day stipend $180 for Regular session $150 for extended session $50 for first special session $30 for second special session $10 for third special session $0 for an additional special sessions Per diem based on federal per diem Non-Juneau Base = $73,635 Juneau Base = $58,200 Total All Legislators Base = $4.37 Million 3:26:56 PM REPRESENTATIVE SULLIVAN-LEONARD asked whether there is any consideration given to special meetings such as subcommittees. CHAIR KITO answered there is not. He explained it would work the way it does now with travel per diem and expenses. 3:28:14 PM REPRESENTATIVE BIRCH said that 57 of the 60 legislators have to travel away from home. He shared his understanding that the aim of the proposed bill is to restore per diem to Juneau legislators. He asked what else was at the core of the question. CHAIR KITO said that in his analysis, he was attempting to identify how to equitably compensate legislators across the board. He said that in the original report in 2009-2010 it was acknowledged that 100 percent of the short term per diem rate was not required to live in Juneau, Alaska. He added there is no public record or written record but there is action that shows Juneau legislators would receive 75 percent of the rate. He said that as a long term per diem rate, there was a $7,000 to $7,500 difference for Juneau, Alaska, legislators as a base. He added 100 percent of the per diem rate now for non-Juneau legislators is around $24,000 and he said he thinks it is not reasonable to assume that $24,000 is what it costs for non- Juneau legislators to live in Juneau, Alaska. 3:31:20 PM REPRESENTATIVE KNOPP spoke to slide 12, "Option B". He noted that in two years there have been eight special sessions. He added that costs go up for housing during the summer months. He suggested the salary compensation committee should examine the issue. CHAIR KITO answered that it was true that legislators do not have control over the call to special sessions. He acknowledged that legislators residing outside the 50-mile limit would still be eligible to receive per diem, they just would not get the meeting stipend. He said it doesn't decrease pay effectively. He shared his concern that the more special sessions there are, the more revenue legislators receive. He said the potential with Option B was to decrease the cost of session by over $1 million. REPRESENTATIVE KNOPP spoke to a Department of Defense (DoD) chart for per diem rates. He said he put forward a resolution in the previous year to follow the guidelines. He added it didn't gain traction or move forward. He asked Chair Kito whether he had examined the federal rate. CHAIR KITO said he thinks if the federal per diem rate is avoided, it is more reasonable to focus on per diem as costs for being in a location that is not the primary residence. He said he did review the federal per diem rates and attempted to acknowledge the cost to relocate but also address the disproportionate compensation that in this case Juneau legislators receive. 3:37:44 PM REPRESENTATIVE JOSEPHSON said he wonders what the public would think of the word "stipend." CHAIR KITO answered that he was trying to identify what the issues were. He said he thinks the salary commission has failed to address legislative compensation at all. He said it is clear to him that there are two forms of compensation: the base salary and per diem. He suggested the per diem is a combination of compensation and the acknowledgement of living expenses. He said he was trying to push the attention to session for the first 90 days and not have as many extended sessions as legislators would not get compensated at the same level. CHAIR KITO stated there aren't any minutes from the commission meetings. He said he didn't know who was speaking and towards the end of the second meeting he started recognizing their voices. He said he believes the commission was operating outside of the law in reducing Juneau legislator pay by $18,000. He said that to believe that amount is strictly provided to him or to other legislators for relocation does not make sense. He said that lead him to the conclusion that per diem is a combination of compensation and living expenses. He underlined that relocation costs are designated separately 3:43:35 PM VICE-CHAIR WOOL shared his understanding that the total package is per diem and salary, and part of that per diem is considered compensation and not considered compensation for room and board. He said he also thinks lowering the per diem is lowering some of the actual salary. He added cutting per diem entirely for Juneau legislators is cutting their salary. CHAIR KITO said under Option D, the amount of budgeting is the same. He said all of the options he looked at would decrease the amount of money spent on legislative compensation. VICE-CHAIR WOOL said constituents ask, "Why do you guys need $300 a day to live in Juneau, Alaska?" 3:46:44 PM REPRESENTATIVE BIRCH said, "This applies equitably to everybody." He added that more than half of legislators are from Anchorage, Alaska, and would receive no per diem if there were special sessions in that city. He said he think the idea that [per diem] is compensation is really a misnomer. He added he thinks the idea of throwing out the recommendation from the commission is "a step too far." REPRESENTATIVE SULLIVAN-LEONARD commended Representative Kito for bringing the discussion forward. She indicated she had looked at the federal side and at other states on the per diem issue. She added she was not pleased with the compensation committee and she thinks it didn't come across as an unbiased committee. 3:49:50 PM REPRESENTATIVE STUTES noted that on slide 14, "Option D", the base salary numbers are backwards: Non-Juneau Base = $70,000 and Juneau Base = $77,020. CHAIR KITO answered that was correct. REPRESENTATIVE STUTES stated she agrees with Representative Sullivan-Leonard that the salary commission was "off-kilter" with their assessment. She questioned the difference in compensation for living expenses if one legislator has a 3- bedroom apartment during session and another rents a room. CHAIR KITO stated the committee, with respect to the proposed bill, had three options: to move nothing forward, to reject the recommendation of the commission, or consider something different. REPRESENTATIVE JOSEPHSON said, "I'm not comfortable with this discussion." He said he agrees about the commission's work, but that he is not comfortable setting his own salary. 3:53:49 PM CHAIR KITO addressed slide 13, "Option C": Base Salary $30,000 Per day stipend $300 for Regular session $150 for extended session $50 for first special session $30 for second special session $10 for third special session $0 for an additional special sessions Per diem based on state long-term rate of $78 per day Non-Juneau Base = $64,020 Juneau Base = $57,000 Total All Legislators Base = $3.82 Million CHAIR KITO identified that the base salary can be adjusted and can apply equitably to every legislator. CHAIR KITO moved to slide 14, "Option D": Base Salary $70,000 No meeting stipend Per diem based on state long-term rate of $78 per day Non-Juneau Base = $70,000 Juneau Base = $77,020 Total All Legislators Base = $4.60 Million CHAIR KITO spoke to "Cost Comparison" in slides 15-21, starting on slide 16: ASOCC Overall difference from current 90-day: ($55,687.50) 120-day: ($74,925.00) Three special sessions in first year: ($134,662.50) CHAIR KITO moved through the Cost Compensation slides: Option A Overall Difference from current 90-day: ($118,642.50) 120-day: ($52,560.00) Three special sessions in first year: $47,295.00 Option B Overall Difference from current 90-day: ($58,297.50) 120-day: ($161,505.00) Three special sessions in first year: ($1,172,452.50) Option C Overall Difference from Current 90-day: ($670,297.50) 120-day: ($773,505.00) Three special sessions in first year: ($1,784, 452.50) Option D Overall Difference from Current 90-day: $109,702.50 120-day: ($263,505.00) Three special sessions in first year: ($1,436,452.50) 4:00:55 PM REPRESENTATIVE STUTES requested Chair Kito review slide 17 with the graph. CHAIR KITO explained the blue line on the left is the base compensation. He pointed to lines showing current compensation between non-Juneau and Juneau, Alaska, legislators. He pointed out that overall compensation, including per diem, for a non- Juneau legislator could be as much as $110,000, while Juneau, Alaska, legislators would still receive $50,400, for a difference of $60,000 in a single year with 3 special sessions. 4:02:58 PM VICE-CHAIR WOOL remarked that the commission had said they "didn't want people coming to this job for the money." He said he thought it was not reasonable to think anyone does the job for the money. He observed there are savings in all of Chair Kito's options and he said if he were a Juneau legislator it would affect his ability to run for office. CHAIR KITO shared his personal decisions based on the current situation. He remarked that the legislature was becoming a full-time job that precludes working elsewhere. 4:08:15 PM VICE-CHAIR WOOL removed his objection. 4:08:54 PM REPRESENTATIVE KNOPP stated he knows there is an impact, so he is open to the discussion. He added he was not so sure that he is ready to adopt a committee substitute. REPRESENTATIVE JOSEPHSON asked Chair Kito for confirmation that the proposed bill contains Option B. CHAIR KITO answered the committee substitute contains Option B, which establishes a salary of $3,315 with the additional compensation for the speaker of the house and the president of the senate. He spoke to the stipend language. He said in subsection C there is a proposal for those legislators not in Juneau not to receive a meeting stipend but to receive lodging per diem. He added that each member would be entitled to an annual allowance for office expenses. VICE-CHAIR WOOL asked for clarification that Juneau and non- Juneau legislators would receive the same per diem. CHAIR KITO answered Juneau legislators would not receive per diem. 4:12:59 PM REPRESENTATIVE KNOPP said he would not support adoption of the CS and prefers to address the original bill. VICE-CHAIR WOOL confirmed if the committee rejects the CS as a working document, the original bill is still before the committee. 4:14:43 PM REPRESENTATIVE BIRCH stated he was opposed to the substitute and to the original bill proposal. He said he doesn't think it's the legislators' option to reject the commission's findings. He said he would return to the salary commission and ask them to review the decision. REPRESENTATIVE STUTES asked whether the CS was also from Representative Guttenberg. CHAIR KITO clarified he had not worked in collaboration with Representative Guttenberg on HB 309. He asked to be recused from voting as the result impacts him directly. REPRESENTATIVE STUTES asked whether Representative Guttenberg supports the CS. CHAIR KITO answered that he had discussed expanding the scope of the proposed bill with Representative Guttenberg, but he did not know whether Representative Guttenberg agreed with specific components of the CS. 4:17:50 PM REPRESENTATIVE JOSEPHSON offered his belief that there is cause to delay the decision due to the need for a legal opinion as to whether Chair Kito can recuse himself. 4:20:45 PM REPRESENTATIVE KNOPP said he thinks the CS should be held and no action should be taken at this time. He said the committee has 90 days to reject or adopt the compensation committee's recommendation. VICE-CHAIR WOOL said the commission decision affects three legislators. He said he thinks it's not that simple and there is a compensation component. REPRESENTATIVE STUTES said she agrees with holding the CS over. CHAIR KITO explained the commission's recommendation would go into effect if no action is taken by the following Wednesday and the window for action was the first 60 of legislative session. 4:23:20 PM The committee took an at-ease from 4:23 p.m. to 4:24 p.m. 4:24:33 PM REPRESENTATIVE DAVID GUTTENBERG, Alaska State Legislature, testified as prime sponsor of HB 309. He said the commission had been established to depoliticize legislative salaries and he said he felt the commission had attempted to create public policies through the salary discussion. He said there were a lot of questions that went unanswered. He added that when listening to the second meeting, he had the clear impression that a lot of decisions were taken off the record. He indicated at the second meeting the commission approved the minutes, but the minutes were still not on public record. He stated he feels there needs to be a hands-off process to depoliticize legislator salaries. 4:27:34 PM REPRESENTATIVE BIRCH shared his understanding that the commission recommendation was to eliminate per diem for legislators who reside within 50 miles of the site of legislative session. He asked for confirmation that the proposed bill would reject the recommendation. REPRESENTATIVE GUTTENBERG answered the bill would reject the commission's recommendation but that he was not asking the committee to pass it out of committee. He added that rejecting the commission's recommendations was the only course of action available. He underlined that the most important part is to have the dialogue. He said he was "not going to push it to the floor" but that he thought a discussion was needed to examine the commission's findings. 4:29:46 PM REPRESENTATIVE JOSEPHSON moved to table HB 309. 4:30:11 PM REPRESENTATIVE KNOPP objected. The CS for the bill had not been adopted. He pointed out the need to take action by Wednesday. He stated if the committee adopts a committee substitute (CS), "we are killing it." He said the bill could go through to the House Finance Committee and onto the House Floor by Wednesday unless the committee adopts a CS. 4:31:37 PM The committee took an at-ease from 4:31 p.m. to 4:32 p.m. 4:32:17 PM REPRESENTATIVE JOSEPHSON made a motion to table the CS to HB 309. There being no objection, it was so ordered.