Legislature(2015 - 2016)HOUSE FINANCE 519
04/23/2016 11:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB379 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 379 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
April 23, 2016
11:04 a.m.
11:04:29 AM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 11:04 a.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Craig Johnson, Sponsor; Representative
Charisse Millett, Sponsor; Robert Ervine, Staff,
Representative Craig Johnson; Grace Abbott, Staff,
Representative Charisse Millett; Representative Louise
Stutes.
PRESENT VIA TELECONFERENCE
SUMMARY
HB 379 STATE EMPLOYEE & OFFICER COMPENSATION
Co-Chair Thompson reviewed the agenda for the meeting.
11:05:03 AM
HOUSE BILL NO. 379
"An Act eliminating pay step increases and pay
increments for certain state employees; relating to
collective bargaining agreements entered into by the
state; and providing for an effective date."
11:05:13 AM
Co-Chair Neuman MOVED to ADOPT the proposed committee
substitute for HB 379, Work Draft (29-LS1647\E). There
being NO OBJECTION, it was so ordered.
11:06:00 AM
REPRESENTATIVE CHARISSE MILLETT, SPONSOR, explained the
changes in the committee substitute (CS). She reported that
in Section 10 a progressivity element was added. The
employee received a percentage of the pay increment based
on the average price per barrel of oil. She listed the
following:
25 percent of the pay increment at $60-$69.99/bbl.
50 percent of the pay increment at $70-$79.99/bbl.
75 percent of the pay increment at $80-$89.99/bbl.
100 percent of the pay increment at $900/bbl. or more
Representative Millett explained that the title was changed
and the word "reducing" was added to reflect the change. In
addition, the effective date was also changed to July 2,
2016 in order to honor the contracts that had already been
negotiated.
Vice-Chair Saddler asked for clarity about the meaning of
average. He deduced that the applicable price of oil was
the average for the entire year. Representative Millett
responded in the affirmative.
Co-Chair Neuman spoke to the similar situation during the
last fiscal year; the state was facing huge deficits due to
the falling price of oil and reduced revenue. He noted that
the discussion focused on ensuring jobs for Alaskans as the
departmental budgets were reduced. He wondered whether
securing state jobs was "the thought process behind the
bill."
Representative Millett answered in the affirmative. She
referred to Representative Gara's comments from the
previous meeting regarding employee morale. She thought the
progressivity aspect of the CS provided "hope and
opportunity" for employees in increased wages when the
price of oil rose and state revenues increased. She spoke
to the "difficulty" of providing "pay raises" in a
"downturn economy" and the state's $4 billion deficit. She
preferred securing state jobs versus paying pay increases.
REPRESENTATIVE CRAIG JOHNSON, SPONSOR, reported that some
of the revenue generating bills "had zero growth" factored
in. He ascertained that "at zero growth and a 2 percent or
3 percent increase in wages the only option was to reduce
employees." He believed that it was not an appropriate time
to grow government and that the bill "fit" with other
measures that were currently proposed while "preserving
state workers."
Representative Millett added that the legislation was not
changing the geographical pay differentials (geo diff) in
small rural communities or other areas of the state. She
reported that Barrow received a 60 percent geo diff, Nome
received a geo diff of 50 percent, Juneau's was 5 percent
and Fairbanks received 3 percent. She felt that maintaining
the geographical pay differentials was a "fair way of
saving state employees."
Co-Chair Thompson mentioned that Representative Pruitt was
in attendance.
11:11:17 AM
Co-Chair Neuman asked whether the CS affected any of the
contracts that had been approved. Representative Millett
relayed that the effective date change protected the
contracts that were ratified. She added that any contracts
negotiated after the effective date of the bill were
affected.
Representative Kawasaki asked what the revenue was at $60
per barrel of oil. Co-Chair Thompson remarked that the
answer depended on the amount of production.
Representative Johnson answered that the sponsors had not
done calculations and was uncertain an accurate fiscal note
was possible.
Representative Kawasaki asked why the specific figures were
used in the progressivity provision. He wondered whether
the numbers were arbitrary. Representative Johnson
responded that he wanted to be "simplistic." Representative
Kawasaki questioned whether the intent was that as state
revenue increased more money was available for step
increases. Representative Johnson responded in the
affirmative. He commented that he supported the $95 bbl.
cut off but agreed with previous concerns raised from
committee members. He referenced the revenue forecast that
projected higher oil revenue in 2022 and wanted to prevent
employees from feeling that they would never receive a
raise. Representative Kawasaki observed that state
employees did not have the ability to affect the price of
oil. He felt employee performance was not connected to the
price of oil. He asked for comments. Representative Johnson
stated that salaries were not tied to oil but were
connected to revenue. He mentioned that employees receiving
pay increases in the face of a $4 billion deficit was
"difficult for people in the private sector." He spoke
about the system being flawed and wanted a "true merit
system." Currently, employees received an automatic pay
raise as long as they did not receive a negative
evaluation. He was in favor of a merit system that only
rewarded exemplary work.
11:16:12 AM
Representative Kawasaki agreed that it was worth re-
examining the merit system. He suggested that if a
legislator agreed with the premise of the bill that the
state could not afford things like pay increases in an
economic downturn it should also apply to "other big
payouts like oil tax credits in Cook Inlet."
Co-Chair Thompson clarified that oil credits was not the
subject of the bill.
Representative Gara understood the concept of rewarding
excellence and endorsed revising the merit pay system.
However, he wanted to focus on the provisions in HB 379. He
referred to the progressivity provision in Section 10. He
asked what percentage the pay increments were.
Representative Millett answered that the pay increments
were 3.25 percent. Representative Gara clarified that at
$60/bbl. of oil a step increase was approximately .08
percent as a quarter of 3.25 percent. He concurred that
$60/bbl. oil was not forecasted until 2021 and a price
above $67/bbl. was not forecasted until 2026. He calculated
that in the absence of cost of living allowances (COLAs)
that were also eliminated, over the next ten years
employees would average pay increases far less than 1
percent. He felt that the result affected employee's
decisions to leave state employment. Representative Millett
responded that the state's unemployment rate "tripled" over
the last year. She did not believe that gaining employment
in the private sector was possible. She discussed the
economic crisis and the attempts to remedy the situation
including instituting taxes that would impact the economy.
She believed that the state could not afford to provide pay
raises at a time the state was cutting services. She spoke
to the difficulty of explaining the situation to her
constituents. She observed the private sector and the
actions it was taking to remain in business.
11:22:21 AM
Representative Gara agreed that merit raises should be
looked at in terms of performance rather than automatic
raises. He maintained that the state would have difficulty
retaining and attracting employees with less than a 1
percent merit increase over 8 years. He stated that parts
of the private sector were still providing merit increases.
Representative Johnson referred to one email he had
received. The individual took a 50 percent decrease in pay
then recently lost her job altogether. He remarked that the
scenario was currently the "environment" in the private
sector. The private sector did not offer automatic pay
increases. He reiterated his desire for a merit system
based on performance. However, the bill addressed the
"automatic" system that was currently in place.
Representative Millett indicated that the state offered
stability, a "robust" health care plan, a good working
environment, and paid leave. She believed the bill offered
more job stability by providing more money for employees.
She thought that state employment was very desirable and
highly coveted.
Representative Johnson reminded the committee that future
contract negotiations would deal with other types of pay
increases. He noted however, that the "automatic raises"
would be "off of the table." Representative Gara remarked
that differing views on the bill were evident. He
referenced the Department of Administration (DOA) data that
two categories of employees started at below market wages.
He viewed the bill as a deterrent to attracting and
retaining professional employees. He believed that the best
way to solve the issue was to come together and adopt a
fiscal plan. He voiced that the answer was to raise
revenue.
Co-Chair Thompson agreed with adopting a fiscal plan but
thought that the bill was also a step in addressing the
deficit.
11:29:15 AM
Representative Johnson interjected that part of why people
worked for the state was due to the benefit package.
Vice-Chair Saddler remarked that the bill was "common sense
legislation." He appreciated that the bill did not affect
currently negotiated contracts and favored that the bill
was linked to state revenue. He thought that morale would
be worse if a person was unemployed. He referenced the
fiscal note that projected roughly $31 million in savings.
He wondered whether the sponsors had any data related to
the equivalent amount of state employees in job reductions.
Co-Chair Thompson remarked that a revised fiscal note that
addressed the changes in the CS was forthcoming.
Representative Johnson offered that the average state
salary was $66 thousand per year.
Representative Wilson asked what the price per barrel was
that the current budget was based on. Representative
Johnson replied that the budget was based on $110.
Representative Wilson asked whether entry level employees
could still be promoted. Representative Millett responded
in the affirmative and added that the geographic
differential was still intact as well as the possibility
for future union negotiated raises.
Representative Wilson asked about the mandatory furlough
days for state employees. Representative Millett replied
that mandatory furlough amounted to 5 days. Representative
Wilson asked whether the 5 day furlough was still in effect
with passage of the bill. Representative Johnson answered
in the affirmative. Representative Wilson thanked the
sponsors for offering the legislation. She favored that the
bill was predicated on the price of oil. She asked what
would happen if the effective date of the bill was July
1st. Representative Johnson replied that the contracts that
were negotiated but not ratified would be included in the
legislation.
Co-Chair Thompson reported that currently there were 4
contracts that had been ratified and were funded in the
budget. Other contracts were presently being negotiated and
would be affected by the legislation.
11:35:56 AM
Representative Gattis stated that she was "disappointed"
about the timing of the bill's introduction. She agreed
with honoring the ratified contracts that the
administration negotiated that included reductions. She
referenced emails from state workers asking what pay cuts
the legislature enacted for themselves. She asked for the
record what the legislature's pay cuts were. Representative
Johnson stated that the House of Representative reduced
staff, mandated furloughs, and reduced office accounts. He
relayed that a board controlled legislator's salaries and
commented that the legislator rebuffed its last recommended
salary increase. Representative Gattis clarified that
legislators had not received pay raises and either
decreased staff pay or eliminated positions. She stressed
that legislators were leading by example and took many
reductions. She asked whether there had been a study about
whether state salaries were competitive. She advised that
the state perform a wage comparison study. Representative
Millett spoke to her work experience in DOA and
acknowledged that job studies were done but was not aware
of any current studies.
11:41:11 AM
Representative Gattis stated that the job comparison should
not only focus on entry level positions but consider higher
level positions. She cited emails she received stating the
belief that higher level positions were over compensated.
She believed that the bill forced an evaluation of the
state's employment system.
Co-Chair Thompson relayed that the last time the
legislators received a pay increase was in 2008 and
additionally did not receive any merit pay or step
increases.
Representative Munoz asked how many contracts had not been
approved and how many employees were affected by the bill.
Representative Johnson did not know the answer.
Co-Chair Thompson reiterated that 4 contracts were
ratified.
Representative Munoz asked Representative Johnson to
estimate how many employees would be affected based on
information he had access to. Representative Johnson
responded that approximately 15 thousand employees were
affected by the bill. Representative Munoz wondered whether
partially exempt employees were included in HB 379.
Representative Johnson responded in the affirmative.
Representative Guttenberg worried that the bill treated all
employees the same. He offered that the Court System did
not control how many people it had to serve and had already
taken significant reductions. He related that state
troopers were motivated to leave state employment after the
state invested in their training which was expensive. He
observed that state employees were unfairly criticized and
many were doing more with less. He noted that the Permanent
Fund Corporation recently lost a highly paid employee to
the private sector for triple the salary who had made the
state "a lot of money." He believed that people only looked
at his salary and not his value as an employee. He voiced
that deep reductions were already enacted, state employees
were working harder with less, and that state services were
threatened. He pointed out that the public did not know the
extent of the cuts. He suggested that there were parts of
the economy that remained unaffected by the state's fiscal
situation. He concluded that the legislation was not equal
across the board. Representative Millett replied that the
state's pay was not equitable because there were 14
different bargaining units. She was also hearing about
people leaving state service for jobs in the private sector
but questioned the validity of the hearsay and wanted
accurate data. She thought the government competed with the
private sector for employees. She thought removing merit
pay was equitable due to the bargaining unit's ability to
negotiate on behalf of the employees objectives.
Co-Chair Thompson recognized the presence of Representative
Stutes.
11:51:26 AM
Representative Johnson was unsure how to draft legislation
that singled out any group of employees without violating
laws. He felt the legislation was the most equitable way to
address the merit pay issue. He relayed that the Permanent
Fund Corporation was not included in the bill. He pointed
out that trooper retention was always problematic and was
often due to job location. He was unsure that pay was
always the guiding principle for retention.
Representative Guttenberg related that he had worked as a
union member his entire life. The different bargaining
units were not related to the equity issue he discussed. He
clarified that he was speaking to what happened when all
pay adjustments were removed. The courts had already
tightened their belts considerably and now they were being
asked to tighten them more. He had seen many people take
private sector jobs after being trained by the state. He
was referring to the equity between departments and
positions and all of the employees asked to do more with
less.
11:55:18 AM
Vice-Chair Saddler noted that he had asked about the
concessions made with the bargaining units and discovered
that they amounted to $6 million. He had yet to hear the
total value of the concessions compared to the total
payroll. He did not believe the unions had given up much.
He thought the legislation represented a common sense
approach to an "unprecedented" drop in revenue while
preserving state jobs.
Representative Gattis spoke to the geographical difference.
She referenced that the Cold Foot Camp employees received
37 percent above the base salary and the geo diff was 50
percent in King Cove, Dead Horse, and King Salmon and was
60 percent in Kotzebue. She believed that the differential
"made up the difference." She commented that people choose
jobs for many different reasons and pay was not always the
main driver. She thought people needed to know that the
geographical differentials remained and had not been
removed in the legislation.
11:59:07 AM
Representative Gara recognized that the bill was a measure
to address the budget deficit. However, he disagreed with
the sponsors about the bill. He emphasized that the state
employed child protective workers, troopers protecting
communities, and many other workers doing "important" state
work. He asked whether the sponsor felt that the state
would be able to retain the "best people" for the types of
jobs he described under the bill. Representative Millett
voiced that she wanted to retain as many state workers as
possible with the bill. She restated that the contracts
that had been negotiated in the current year would be held
harmless. She voiced that the bill did not remove COLAs.
The unions could negotiate a cost of living increase in the
future as well as other pay adjustments. She could not say
that one state worker was of more value than another. She
valued state workers and acknowledged that "people rely on
state government." She hoped to stop merit raises versus
having to lay off more state employees. She emphasized that
the legislation saved jobs.
Co-Chair Thompson asked whether there were further comments
from the sponsors.
Representative Johnson thanked the committee for hearing
the legislation.
12:05:01 PM
Representative Kawasaki asked whether the sponsors examined
Governor Palin's examination of salary and wage increases
or the subsequent study in 2009 that recommended doubling
the salary of legislators.
GRACE ABBOTT, STAFF, REPRESENTATIVE CHARISSE MILLETT,
responded that there had been multiple discussions about
automatic merit raises but was uncertain about everything
that was considered. Representative Kawasaki remembered
that most current legislators were in office when the bill
that created the existing pay system was introduced and
voted for it. He wondered whether Administrative Order 237
that laid out the context for the salary increases was
researched while crafting the bill.
ROBERT ERVINE, STAFF, REPRESENTATIVE CRAIG JOHNSON, stated
that there had been some discussions raised in his office
regarding Governor Palin's pay increases that had "gone too
far" and the bill was an attempt to remedy and propose a
path forward. Representative Kawasaki recounted that in
2007 the state experienced nearly 16 percent employee
"turnover." He relayed that the discussion focused on
retention and that training cost roughly one half of the
cost of an annual salary. He referenced the study from 2007
that concluded the federal government paid 24 percent more
in COLAs and that the state needed to be more competitive
as an employer and "could do better." He felt that the bill
discounted the discussions concerning recruitment and
retention and that the bill "might harm recruitment and
retention" efforts. Ms. Abbott agreed about the importance
of recruitment and retention and believed the study was
accurate at the time. She opined that the bill addressed
the present situation and reflected the different
environment of the state. She thought the bill attempted to
address what the state could afford.
Vice-Chair Saddler asked whether the current fiscal note
that reported a savings of $18 million in FY 17 and $12.6
million in FY 18 were applicable to the CS. Ms. Abbott
answered in the affirmative.
12:10:08 PM
Representative Gara referred to two fiscal notes for the
bill. He indicated that he viewed one fiscal note that
reported $18 million in savings and $12 million in future
years and another that reported $30 million in savings. He
wondered which fiscal note applied. Ms. Abbott stated that
to the best of her knowledge the fiscal note was compounded
and deferred to OMB for the answer.
Co-Chair Thompson directed Representative Gara to look at
the analysis on page 2 of the executive branch fiscal note.
Representative Gara asked for clarification regarding
Sections 2 through 9 of the legislation.
Mr. Ervine explained that Sections 2 through Section 9
referred to the $90 progressivity provision applied to the
various state employees. Section 2 applied AS 39.27.011(h)
and Section 3 repealed the statute as necessary, which
continued in the same manner through Section 9.
Representative Gara remained confused about Sections 2
through 9.
Ms. Abbott clarified that the Sections were crafted to
reflect both circumstance where the price of oil was below
$90/bbl. and when the price rose above $90/bbl.
Representative Gara mentioned that Section 10 was easily
understood. He wondered whether Sections 2 through 9 were
conforming provisions for Section 10. Mr. Ervine responded
that Sections 2, 4, 6, and 8 were conforming statutes and
Sections 3, 5, and 7 repealed Sections 2, 4, 6, and 8 when
the price of oil was above $90/bbl.
12:15:26 PM
Representative Edgmon asked whether the intent language in
the bill "comported" with the progressivity provision in
Section 10. Ms. Abbott indicated that the intent language
did comport because of the new effective date change.
Representative Edgmon pointed to the sentence on page 1,
line 10 and read:
…oil for sale on the United States West Coast for an
entire fiscal year is $90 or more,…
Representative Edgmon offered that the language did not
conform to Section 10.
Mr. Ervine referred to Section 1, line 8 and read:
…pay increments be fully or partially suspended…
Mr. Ervine related that the fragment was the "operative"
conforming language. Representative Edgmon thought that the
language was not conforming to Section 10. Mr. Ervine
shared that he held conversations with Daniel Wayne,
Attorney; Legislative Legal Services (LAA), who confirmed
that the language was "appropriate."
Representative Wilson thought that job seekers considered
other factors besides pay. She stated that many businesses
did not offer health insurance and retirement benefits. She
commented that the legislation posed a difficult decision.
She believed that state employees worked hard and "did a
good job." The decision had nothing to with workers not
performing, but the fact that the state "had to put its
house in order." She recommended readjusting the entire
state employment system. She thought it was the correct
time to implement the current legislation. She cautioned
the University and "others" not included in the legislation
that the legislature would closely examine its contracts.
She wanted to get the state's "house in order" before
asking her constituents for "other revenue." She hoped the
bill passed out of committee today in light of the state's
deficit.
12:19:57 PM
Representative Munoz had concerns with the bill because it
was not a universal approach. She agreed that the merit pay
system should be reexamined. She thought that performance
was the best way to judge merit increases. She felt that
the legislation was separating state employees into two
categories; those that received the pay increments such as
teachers at Mt. Edgecombe High School and the General
Government Unit and those that did not such as correctional
officers and public safety employees.
Co-Chair Thompson maintained that each bargaining unit
negotiated on its own behalf and the outcome never created
equity among bargaining units.
Representative Gattis favored the legislation and
referenced Representative Kawasaki's remarks about the
Palin Administration implementing the merit system
currently in place. She reminded the committee that under
the Palin Administration the price of oil was $140/bbl. She
reported receiving emails from state employees who felt
"devalued" by the legislation and related that no cuts were
easy for legislators. She shared a personal story from a
constituent and thought the bill ensured that everyone was
"pitching in."
Representative Gara agreed that everyone needed to pitch
in. However, "hundreds" of state jobs were already
eliminated which created a "ripple effect" through the
economy. He observed that state workers already "pitched
in." He thought there were better ways to save $30 million
than eliminating state employee pay raises. He suggested
that without pay raises the state would lose good people at
a cost of community safety and child protective services.
He relayed his wife's job experience in the private sector
as an example. She received pay freezes occasionally but
only for up to one year and would most likely seek other
employment if a pay freeze lasted 10 years. He asserted
that there were better ways to reduce the deficit. He noted
that over 6000 corporations were exempt from paying state
corporate taxes. He suggested that closing the loophole
alone would raise $50 million to $100 million in revenue
according to a 10 year old Department of Revenue (DOR)
study. He could not support the legislation and argued that
there were "smarter" ways to save money than to eliminate
merit pay for 10 years. He reported that there were other
fiscal plans that were not being discussed. He agreed with
the sponsors regarding engaging in discussions on improving
the merit system.
12:28:28 PM
Representative Guttenberg clarified that when he was
talking about fairness he was not talking about the
different bargaining units or classifications of state
employees. He was talking about the current bill not
recognizing that some state entities already "tightened its
belt." He did not believe "in placing more of the burden
and an unfair burden" on the shoulders of the state's
employees and did not believe the bill was adequate to
address the fiscal crisis.
Vice-Chair Saddler commented that morale was a problem when
a high performing state employee sees a perceived low
performing state worker also receive merit pay. He thought
it was appropriate that in the future the legislature
rewarded workers via a "true merit system." The clear
linkage between merit and performance would improve state
productivity and morale. He referred to a comment made by
the DOA Commissioner, Sheldon Fisher's testimony that state
worker pay exceeded inflation by 11 percent and rose to 31
percent with the addition of the COLA. He believed the bill
was a "good deal" and was "common sense legislation"
because it preserved jobs and allowed for the reinstatement
of merit pay as revenues improved.
12:32:17 PM
Representative Kawasaki reported that there had been
several studies in the late 2000's which concluded that the
state was not a very good employer due to salary and
benefits and that the state could improve its status as a
competitive employer. He restated the data regarding
turnover in 2006. He elaborated that the cost of training
and turnover were a burden on the state and created
"incredible challenges." He relayed hearing testimony by
agencies that reported difficulty in recruitment and
retention and characterized state employment as a "training
ground" for better employment in the private sector. He
furthered that Commissioner Fisher testified that "overall"
the state's "cash compensation" was below market value for
professional and new employees. He agreed that there were
some employees that earned above market values due to
longevity and tier status which he opined "should be
applauded." He remarked that public testimony was heard in
committee on a previous Friday morning when state employees
were diligently working. He reported receiving "a lot" of
emails from public employees. He noted the $12 million in
savings reported in the fiscal note. He thought the bill
"brought out" people that "demonized" legislators and its
work as well as state employees and despised government. He
believed the situation was a "shameful reflection" of the
consequences of actions such as introduction of the HB 379.
He stated that if the legislature continued to "degrade
merit and longevity and continued to "demonize" the state's
public employees it would be difficult to hire and retain
good workers. He also remarked that the bill linked public
employee merit with the price of oil, which the employees
had "nothing to do with." He suggested linking other
expenditures to the price of oil. He felt that the deficit
was the legislators "fault" and not the fault of state
employees. He felt "badly that the legislature was pushing
the bill through."
Co-Chair Thompson discouraged Representative Kawasaki from
speaking on behalf of the sponsors. Representative Kawasaki
clarified his remarks and asserted he was relaying his
experience of the consequences of introducing the
legislation. He believed "folks" were metaphorically
"beating up" public employees and it was "shameful."
Co-Chair Neuman did not agree with his remarks regarding
beating up public employees.
Representative Kawasaki restated that he had received
emails that were disparaging public employees and felt that
it was "shameful."
12:39:15 PM
AT EASE
12:41:31 PM
RECONVENED
Representative Kawasaki continued that the bill sent a "bad
message" to state employees at a time when the state
depended on their work "more than ever" and that state
workers contributed to making the state "great." He
strongly opposed the bill.
12:42:22 PM
Representative Edgmon did not think the legislation was ill
founded. He believed that the discussion was appropriate in
light of the state's fiscal situation. He understood the
need for the legislation. He also determined that the
legislation might have deep ramifications. He viewed the
discussion less about merit pay and more about the
universal merit and employee compensation system of the
state. He felt that he was unable to decipher all of the
"moving parts" in a system with different tier status, etc.
He noted that the employees in the criminal justice system
were already working longer hours with less support. He
reported observations regarding fiscal impacts and reported
testimony from Commissioner Fisher regarding the
departments absorbing additional personnel costs through
attrition and retired employees and not additional
appropriations. He reflected on the overall impact of the
bill and considered rural state employees who "never seem
to catch up" in defiance of the geographic differentials.
He mentioned the "double edge sword" that described the
"exponential" effect on rural areas when the price of oil
rose. He viewed the legislation as a major policy change
and thought it needed further consideration and proper
vetting. He did not support the bill that only "touched the
outer edges" of a larger policy and was only quickly
evaluated.
12:47:17 PM
Co-Chair Neuman stated that he believed that the
legislation was not a pay cut, but rather a pay freeze. He
acknowledged the hard work of state workers and voiced that
the legislature respected state employees. He related his
personal work experience. He thought of the bill as a means
of trying to protect workers rather than lying off
employees. He endorsed regulation reform and believed it
would reduce employee workload by shrinking enforcement
duties. He maintained that decisions around budget
reductions were very difficult but necessary in the face of
the fiscal crisis and large deficits. He stressed that the
legislature had reduced its budget. He thought about cause
and effect and noted the importance of paying attention to
effects like state troopers leaving state employment. He
viewed the legislation as beneficial but asserted that
adjustments could be made if the effect was negative. He
commented that the state's economy was "slowing down." The
legislature had to deal with the current fiscal crisis and
the legislation was another difficult decision that was on
the table.
12:53:12 PM
Co-Chair Thompson asked whether members had any amendments.
Representative Gara moved Conceptual Amendment 1.
Representative Wilson objected.
Representative Gara explained Conceptual Amendment 1:
He stated that the amendment was "delete all material" and
requested more information about the bill and the state's
salary system. He did not possess an "accurate picture" of
how the system worked. He had "suspicions" that anyone
would receive merit pay without working hard. However, he
thought it was worth looking at how the state handled merit
pay. He wondered whether the issue interfered with the
rights to collective bargaining. He did not believe that
the bill "gets it right." He explained that the conceptual
amendment requested more information and called for a
review in order to construct a fair system. The information
was not currently available. He believed the department
could undertake a study without the amendment and felt a
study and more discussion was warranted.
Representative Gara WITHDREW Conceptual Amendment 1.
12:57:35 PM
AT EASE
12:58:07 PM
RECONVENED
12:58:12 PM
AT EASE
12:59:41 PM
RECONVENED
Co-Chair Neuman explained that he held a discussion with
the sponsors who agreed with the second part of
Representative Gara's conceptual amendment that requested
further "study to devise a merit pay system that properly
awarded performance and recognized the public intent in
effective recruitment and retention with a study prepared
by December 31, 2016 for the legislature." He felt that a
study was appropriate.
1:00:42 PM
Co-Chair Neuman offered the amendment as Conceptual
Amendment 2.
Representative Wilson objected to Conceptual Amendment 2.
She had no problem with requesting a study. However, she
objected to the latter half of the amendment that requested
to "devise a merit pay system that properly awarded
performance and recognized the public intent in effective
recruitment and retention…" She believed the language
contained a "policy call" for the legislature to decide.
She believed that the amendment as currently written
authorized DOA to devise the merit pay system.
Co-Chair Neuman agreed with Representative Wilson. He
delineated that his intent was to send a message to the
administration to conduct the study by next year.
Co-Chair Neuman WITHDREW Amendment 2.
Vice-Chair Saddler MOVED to REPORT CSHB 379 out of
committee with individual recommendations and the
accompanying fiscal note(s).
Representative Munoz Objected.
A roll call vote was taken on the motion.
IN FAVOR: Pruitt, Saddler, Wilson, Gattis, Neuman, Thompson
OPPOSED: Edgmon, Gara, Guttenberg, Kawasaki, Munoz
The MOTION PASSED (6/5).
CSHB 379 was REPORTED out of committee with a "do not pass"
recommendation and with a fiscal impact note by the
Legislature, a fiscal impact note by the Alaska Judicial
System, and a fiscal impact note by the Executive Branch.
^RECESSED TO THE CALL OF THE CHAIR
ADJOURNMENT
1:04:30 PM
The meeting was adjourned at 1:06 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 379 CS WORKDRAFT Ve 4-22-16.pdf |
HFIN 4/23/2016 11:00:00 AM |
HB 379 |
| 2016.04.21 House Bill 379 Testimony.pdf |
HFIN 4/23/2016 11:00:00 AM |
HB 379 |
| HB 379 Letters Opposition PKT 3.pdf |
HFIN 4/23/2016 11:00:00 AM |
HB 379 |
| HB 379 Letters Support PKT 2.pdf |
HFIN 4/23/2016 11:00:00 AM |
HB 379 |