Legislature(2007 - 2008)BELTZ 211
03/11/2008 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HJR25 | |
| SB289 | |
| SB294 | |
| SB297 | |
| SB160 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 294 | TELECONFERENCED | |
| *+ | SB 297 | TELECONFERENCED | |
| += | SB 160 | TELECONFERENCED | |
| += | SB 289 | TELECONFERENCED | |
| += | HJR 25 | TELECONFERENCED | |
SB 297-NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT
1:58:27 PM
CHAIR ELLIS announced SB 297 to be up for consideration.
ANNETTE KREITZER, Commissioner, Department of Administration
(DOA), said the state has the same challenges with recruitment
and retention that other employers have. The governor has tasked
the executive working group created under AO 237 to review the
issue of recruitment and retention. That report is available on
the department's web page. She said the labor negotiations are
one part of addressing recruitment and retention, but those
decisions are made at the bargaining table. The contracts have
been offered to seven unions and she has agreements with four so
far. These contracts are the best in 15 years.
She said that changes in compensation for state employees not
covered by a bargaining agreement must be accomplished through
legislation and that's what SB 297 does. Each union contract is
unique and there are other elements of pay in addition to COLA
or service steps contained in each one; her job is to look at
the final full effect of the monetary components of each and
consider the fiscal impact on the state. She said her proposed
budget will be reduced this year.
COMMISSIONER KREITZER said the criticism that this bill has
service steps not offered to one particular union is
disingenuous in her opinion. Because one of the five offers she
made to that union included service steps in addition to a 40-
hour work week.
She said the changes in the offers she has made will help the
state retain the professional knowledgeable state employees.
Each negotiation is different and one can't simply pick out one
element of an offer that a union refused and say you can't offer
that to anyone else because we turned it down. The estimate of
the cost of the service steps she offered to the SU (which she
brought up today because of a full-page ad in today's Juneau
Empire on this topic.) was $1.9 million for FY09. That is still
a big number and so is the $8.5 billion unfunded liability for
state employee and retiree pensions and health benefits.
COMMISSIONER KREITZER said she wanted to set the stage by saying
they are all dealing with the same issues of trying to build a
bridge to a gas line with production declining at a rate of 6
percent a year. She is trying to hold down spending while trying
to do sustainable contracts.
SENATOR BUNDE said the legislature recently passed a
supplemental bill that included a substantial amount of money
for these negotiations and asked what impact that had on her
negotiations.
MS. KREITZER replied that she had concluded negotiations with
GGU and with the supervisory unit and that is in the
supplemental. The supervisory unit has ballots out now to decide
on whether or not to accept that offer with a closing time of
tomorrow.
2:02:40 PM
KEVIN BROOKS, Deputy Commissioner, Department of Administration
(DOA), walked them through SB 297. He said it restates salary
schedules and identifies a number of positions that are
specifically set in statute. Section 1 raises limited entry
commissioners from Range 26, Step C to Range 27 and no step
reference. Section 2 is conforming language addressing the
Alaska State Defense Force. Section 3 raises the chief
procurement officer from a Range 24 to a Range 27. Section 4
addresses the step limitation for deputy commissioners who are
appointed. Current language says they are appointed at not less
than Step A or more than Step F and new language deletes the
reference to steps because it's limiting when people come to the
state from the private sector or are promoted from other
positions.
2:05:53 PM
MR. BROOKS said Section 5 restates the salary schedule contained
in Title 39 to reflect a 5.5 percent increase. Sections 6 and 7
provide for raising the salary schedule by 3 percent in July 1,
2008 and 3 percent more in July 1, 2009.
Section 8 adds a new subsection that allows for pay increments
every two years beyond Step F; currently an individual would
progress from Steps A through F annually and after that adds
more years between steps according to AS 39.27.022.
He explained in 1972 longevity steps A-F were added to statute
to reward people for longer service, but now that is more of an
obstacle and extra steps are needed to keep employees on longer.
It is tied to an annual "good" review rating.
2:08:43 PM
SENATOR BUNDE asked if people ever receive less than good or
adequate reviews and why are they retained.
MR. BROOKS answered that some individuals receive a low
acceptable or unacceptable rating. There is a process for them
to go through of identifying areas that need improvement and
developing a plan. In some cases they are retained and others
not.
SENATOR BUNDE asked if a majority of reviews are good or better.
MR. BROOKS answered it was safe to say a majority of review are
mid-acceptable or higher.
SENATOR BUNDE asked if the range is unacceptable, acceptable and
good.
MR. BROOKS replied there are five different rankings within
"entirely unacceptable" and "outstanding."
SENATOR BUNDE said the positions in this bill are non-bargaining
unit.
MR. BROOKS replied yes, but many of them would receive an annual
review using a standard form for classified people.
SENATOR BUNDE said he thought merit pay was a good idea, and
that he would like more information on how many are acceptable
and unacceptable.
MR. BROOKS said he could get some data on that; it was important
to tie it to a certain level of performance and one of the items
the task force talked about was bring accountability to the
workforce.
COMMISSIONER KREITZER added that this won't be done all in one
year. The working group report talks about improvements to the
merit system and how it can't work without a co-effort to
prepare proper evaluations. She is trying to figure out how to
make the evaluation process simpler for supervisors so they will
see the value in it and do them.
SENATOR BUNDE said he is trying to avoid a Lake Woebegone
situation where everyone is above average.
MR. BROOKS said Section 8 had a couple of subsections;
subsection (i) ties this to the pay plan that is in Title 39.25.
Subsection (j) allows for the legislature and independent
agencies within the legislative branch to choose to apply these
types of merit increases to their staff or not. Section 9
addresses pay for commissioners within the RCA as mentioned
previously.
2:14:16 PM
Section 10 repeals former AS 39.27.022 that addressed the
longevity steps that are now in section AS 39.27.011. Section 11
covers executive branch salary overrides. He explained that a
number of employees in the executive branch are exempt,
partially exempt and classified, and he identified the exempt
ones on a salary override. In other words they are not being
paid off of the salary schedule; they are being paid some amount
that has been determined by their employer to be appropriate and
adequate. The goal is if someone has already had their pay
adjusted, it won't be adjust again at 5.5 percent. It applies to
commissioners and others who are not part of the salary system.
MR. BROOKS said Section 12 covers judicial employees. It also
mistakenly groups magistrates with judges and he had suggested
language for that. Section 13 addresses the University and
states that they are under the policies that are adopted by the
Board of Regents and not covered by this bill. Section 14
provides prospective application of the steps to not harm
someone in the middle of his salary schedule. Section 15 is more
transition language.
2:17:35 PM
He said the retroactivity addresses the first 5.5 percent
increase going back to July 1, 2007.
MR. BROOKS wrapped up that he has heard the statement "high
level employees" and this bill really covers about 1,500 people
- 14 commissioners, 75 directors, but it includes a lot of rank
and file folks. It's much broader than he has heard
characterized.
SENATOR ELLIS asked why this bill was introduced on March 3.
MR. BROOKS answered that the administration has been working on
this since the fall; they could have offered it earlier and have
been running different scenarios, but they have been in active
negotiations with different unions.
SENATOR ELLIS asked if the specific timing related to any
negotiations with public employees.
MR. BROOKS answered no.
SENATOR BUNDE asked if language on page 4, line 3, applies to
legislative staff.
MR. BROOKS answered it applies to all legislative employees
including the Legislative Affairs Agency (LAA).
2:20:19 PM
CHRIS CHRISTIANSON, Deputy Administrative Director, Alaska Court
System, said all employees in the judicial branch are non-
covered. It is the largest group of non-covered employees
outside of the University and the lowest paid branch of
government; approximately 70 percent of its employees are Range
15 or below. Largely because of this they have a very high
turnover rate which translates into high training costs, a high
ratio of supervisors to clerks and other inefficiencies.
Notwithstanding the pay, he said, many of them are hard working
employees.
He said over the last 15 years state employees have received
COLA adjustments much less than the rate of inflation. In
today's dollars what he pays a Range 10 today is substantially
less than what he paid to a Range 10 twenty years ago.
In addition to the COLA the bill proposes to change the scheme
of longevity pay which addresses a very real problem of
retaining long term employees. He stated that most entry level
employees at the court system are a Range 8 or 10. The highest
ranking person at the court might be a Range 16. So there is not
a lot of upward mobility to get people to stay a long time.
2:22:28 PM
MR. CHRISTIANSON said he didn't agree with two provisions in
this bill: one was magistrate pay. They don't have their
salaries set in statute and are ordinary state employees on a
salary schedule. However, he has received indication that change
would be supported.
The other provision is the retroactivity for judges. The bill
lumps judges together with political appointees in denying them
retroactive pay for the current fiscal year. Judges, unlike most
other state employees, do not get longevity pay. A normal
employee over the course of an 18-year career will have
increases equal to 40 percent of their salary; a judge who has
worked for 18 years gets exactly the same pay as a brand new
judge. They are uniquely dependent on getting cost of living
adjustments from the legislature for their pay raises.
During the 20-year period prior to the 2006 pay raise, inflation
ran about 77 percent and judges got pay raises equal to about 50
percent. They went from the highest paid state court judges in
th
the country down to the 48 ranked in the country. The results
were very negative; they had judicial positions for example in
Bethel that couldn't be filled because qualified people wouldn't
apply. Also, the courts face smaller applicant pools that tend
to be much younger and less qualified that in the past. The
legislature realized there was a problem two years ago. He
remarked between the day the judges got that pay raise and the
end of the current fiscal year the inflation rate is going to be
between 7 and 8 percent; so judges will lose roughly 7 to 8
percent of the amount the legislature thought was a suitable
amount two years ago. He advised to not start down the path they
took 20 years ago when judges' pay was gradually chipped away
because small COLA adjustments were not made on a regular basis
and large adjustments have to be made every few decades after
having lots of problems.
CHAIR ELLIS remarked that he was talking to legislators who are
a Range 10, plus some per diem; so they would try to keep it in
perspective.
2:25:48 PM
CHRISTINE SCHLOUSS, Anchorage Attorney, said she used to be an
assistant public defender and a member of the Teamsters Union.
She is very pro-union, but on this issue she disagreed with
union people who speak out against this bill because a union
contract did not contain the longevity steps. That is what she
wanted to focus her comments on.
MS. SCHLOUSS said she started as a public defender in the 70s
and 80s where salaries were competitive with those in private
practice. That is no longer even remotely the case. What she
sees frequently now because she litigates against the DAs and
public defenders is that the state is losing the brightest and
the best. These folks often come out of law school $150,000 to
$200,000 in debt and they start out by not being able to keep up
with their debt. She knows of an assistant district attorney who
drives a cab at night to make ends meet. The Public Defender
Agency just lost a terrific well qualified attorney who went to
work as a sales representative for an online legal resource
organization because it pays her 2.5 times her salary as a
public defender.
She urged the legislature to recognize that the state needs to
have the kind of lawyers who want to work in public service but
could make 2.5 more in private practice. These longevity steps
don't do enough, but they do something. She urged them to
recognize the worth of rank and file employees who want to stay
working with the state by giving them the opportunity to have at
least small step increases.
2:30:12 PM
MARGO LACHAPELLE, Employee Representative, Bethel Supervisory
Unit (SU), said she is also a supervisor for the Division of
Public Health Nursing, Department of Health and Social Services
(DHSS). She said the SU has been negotiating with the state
since December 06 and the administration refused to include the
longevity steps in their final contract offer. Four days after
her members voted to accept the contract, this bill was
introduced offering a better deal to political appointees. By
doing so, she felt the administration did not value the state
employees with the SUs. In addition to denying the SU members
the longevity steps during negotiations, the administration
waited until after the ballots went out to publish the
Governor's Recruitment and Retention Task Force Report. She
said, "It echoed all the things we've been saying for the last
year at the bargaining table. We can't hire enough qualified
people to staff our positions because the pay is too low...."
She asked that this bill be amended so that the extra longevity
steps for the non-unionized employees of the executive branch
are contingent upon the same steps being applied to the
unionized employees of the executive branch.
CHAIR ELLIS thanked everyone for the comments and held the bill
for further work.
2:33:24 PM at ease 2:33:39 PM
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