Legislature(1999 - 2000)
02/11/1999 08:08 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE February 11, 1999 8:08 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative John Coghill Representative Scott Ogan Representative Jim Whitaker Representative Bill Hudson Representative Beth Kerttula Representative Harold Smalley MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL NO. 2 "An Act relating to issuance of a motor vehicle registration plate to or parking permit for a person who is disabled." - MOVED HB 2 OUT OF COMMITTEE *HOUSE BILL NO. 45 "An Act relating to initiative and referendum petitions; and providing for an effective date." - HEARD AND HELD *HOUSE JOINT RESOLUTION NO. 7 Proposing an amendment to the Constitution of the State of Alaska relating to initiative and referendum petitions. - HEARD AND HELD *HOUSE BILL NO. 74 "An Act relating to salary caps and to the power to transfer certain positions to the classified service and entitlement to longevity increments for certain state officials." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: HB 2 SHORT TITLE: REGISTRATION PLATES FOR DISABLED SPONSOR(S): REPRESENTATIVES(S) JAMES Jrn-Date Jrn-Page Action 1/19/99 18 (H) PREFILE RELEASED 1/8/99 1/19/99 18 (H) READ THE FIRST TIME - REFERRAL(S) 1/19/99 18 (H) TRANSPORTATION, STATE AFFAIRS 2/02/99 (H) TRA AT 1:00 PM CAPITOL 17 2/02/99 (H) MOVED HB 2 OUT OF COMMITTEE 2/02/99 (H) MINUTE(TRA) 2/03/99 129 (H) TRA RPT 5DP 2NR 2/03/99 129 (H) DP: HUDSON, KOOKESK, SANDERS, HALCRO, 2/03/99 129 (H) MASEK 2/03/99 129 (H) NR: KEMPLEN, COWDERY 2/03/99 129 (H) ZERO FISCAL NOTE (ADM) 2/03/99 129 (H) REFERRED TO STATE AFFAIRS 2/11/99 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 45 SHORT TITLE: INITIATIVE/REFERENDUM PETITIONS SPONSOR(S): REPRESENTATIVES(S) WILLIAMS Jrn-Date Jrn-Page Action 1/19/99 30 (H) READ THE FIRST TIME - REFERRAL(S) 1/19/99 30 (H) STATE AFFAIRS, FINANCE 2/11/99 (H) STA AT 8:00 AM CAPITOL 102 BILL: HJR 7 SHORT TITLE: CONST AM: INITIATIVE/REFERENDUM PETITIONS SPONSOR(S): REPRESENTATIVES(S) WILLIAMS Jrn-Date Jrn-Page Action 1/19/99 17 (H) READ THE FIRST TIME - REFERRAL(S) 1/19/99 17 (H) STATE AFFAIRS, JUDICIARY, FINANCE 2/11/99 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 74 SHORT TITLE: SALARIES FOR CERTAIN STATE OFFICIALS SPONSOR(S): REPRESENTATIVES(S) OGAN, Kohring, Cowdery Jrn-Date Jrn-Page Action 2/03/99 131 (H) READ THE FIRST TIME - REFERRAL(S) 2/03/99 131 (H) STATE AFFAIRS, FINANCE 2/11/99 (H) STA AT 8:00 AM CAPITOL 102 WITNESS REGISTER BARBARA COTTING, Legislative Aide to Representative James Alaska State Legislature Capitol Building, Room 102 Juneau, Alaska 99801 Telephone: (907) 465-4963 POSITION STATEMENT: Presented HB 2. REPRESENTATIVE BILL WILLIAMS Alaska State Legislature Capitol Building, Room 502 Juneau, Alaska 99801 Telephone: (907) 465-3424 POSITION STATEMENT: Sponsor of HJR 7 and HB 45. DANNA LATOUR, Administrative Officer Division of Elections Office of the Lieutenant Governor P.O. Box 110017 Juneau, Alaska 99811 Telephone: (907) 465-5347 POSITION STATEMENT: Provided information on HJR 7 and HB 45. BETTY ROLLINS P.O. Box 55163 North Pole Alaska 99705 Telephone: (907) 488-6614 POSITION STATEMENT: Testified in opposition of HJR 7 and HB 45. KYLE JOHANSEN, Legislative Aid to Representative Williams Alaska State Legislature Capitol Building, Room 502 Juneau, Alaska 99801 Telephone: (907) 465-3424 POSITION STATEMENT: Provided information on HJR 7 and HB 45. TOM BOUTIN P.O. Box 35116 Juneau, Alaska 99803 Telephone: (907) 789-7936 POSITION STATEMENT: Testified in support of HB 45. ALISON ELEGEE, Deputy Commissioner Department of Administration P.O. Box 110200 Juneau, Alaska 99811 Telephone: (907) 465-2200 POSITION STATEMENT: Testified in opposition to HB 45. DON ETHERIDGE Local 71 710 West Ninth Street Juneau, Alaska 99801 Telephone: (907) 789-0395 POSITION STATEMENT: Testified on HB 74. ACTION NARRATIVE TAPE 99-1, SIDE A Number 0001 CHAIR JEANNETTE JAMES called the House State Affairs Standing Committee meeting to order at 8:08 a.m. Members present at the call to order were Representatives James, Coghill, Ogan, Whitaker, Hudson, Kerttula and Smalley. HB 2 REGISTRATION PLATES FOR DISABLED CHAIR JAMES announced the first order of business is HB 2," An Act relating to issuance of a motor vehicle registration plate to or parking permit for a person who is disabled." Number 0019 BARBARA COTTING, Legislative Aide to Representative James, Alaska State Legislature, read the following sponsor statement: House Bill 2, which is an Act relating to issuance of a motor vehicle registration plate to, or a parking permit for a person who is disabled, is very short and very simple. It makes one simple change to Title 28, Vehicle Registration and Title, allowing licensed nurse practitioners to provide proof of disability for veterans to receive specially designed license plates. Currently, only licensed physicians are authorized in our Alaska Statutes to provide proof of disability. Alaska has many medical facilities in both rural and urban settings where a nurse practitioner is the only licensed medical person available, and this bill would allow much-needed flexibility. MS. COTTING mentioned HB 2 was previously heard in the House Transportation Standing Committee and then referred to a letter of support from Anne Lilley, a nurse practitioner in Fairbanks. She pointed out Ms. Lilley's veterans center requested the introduction of HB 2 which details why nurse practitioners in the state of Alaska need this flexibility. MS. COTTING read Juanita Hensley's, Chief, Driver Services, Division of Motor Vehicles, message that the Department of Administration has no objection to HB 2 in its current form. REPRESENTATIVE OGAN asked, "What was the purpose of -- I mean I can understand the licensed physician and maybe at best nurse practioners in some parts of the state act like a physician in those areas. But, how would one get one before?" Number 0071 MS. COTTING explained that the patients had to go through a series of tests with a licensed physician. At the present time, that's the only way they can be certified. Whereas, these nurse practitioners are usually very familiar with their disabilities because they're the ones that work with them most frequently. This applies to all disabled people, not just veterans - there is a list of requirements in federal statute that qualifies a person as disabled. And we follow those statutes in Alaska that is our criteria. It has to do with how far the person can walk without assistance and other such things that a nurse practitioner can very easily verify. REPRESENTATIVE KERTTULA asked if this could be broadened to include other people that might need this type of certification by a nurse practitioner. MS. COTTING replied, Mike Ford, Legal Services, drafter of HB 2, assured her that this applies to all disabilities, to all disabled people, not just veterans. CHAIR JAMES further explained that vehicles owned by disabled veterans, including persons disabled in the line of duty, and other persons with disabilities is in existing law. The only change is adding the advanced nurse practitioners as authorized to make those determinations for any person who is disabled. For purposes of this subsection, proof of disability may be provided by a person licensed as a physician under AS 08.64 or as an advanced nurse practitioner under AS 08.68. Number 0118 REPRESENTATIVE SMALLEY indicated he could support HB 2 and stated, "In looking at the criteria, it says a disabled veteran who is not - and it is in the regulation - is not otherwise qualified under this section, but he presents the department written proof that this person is at least 70 percent disabled. So they would have to bring that criteria to the nurse practitioner, and then the nurse practitioner verifies it, is that correct?" MS. COTTING replied she believes the nurse practitioner is the one who verifies it, and then the form is taken to the Division of Motor Vehicles. CHAIR JAMES pointed out the only difference is that they can take the form to a nurse practitioner or a doctor. Currently the disabled can only take the form to a doctor and it's not necessarily presumed that that's going to be the doctor that's going to make the determination. She reiterated the requirements to determine the 70 percent disability doesn't change, it only allows a nurse practitioner to do the same thing a doctor would do in verifying the documentation. REPRESENTATIVE OGAN said, "The bill suggests that an advanced nurse practitioner, under AS 08.68, and then it doesn't define it past that. Alaska Statute 08.68 is the whole title of the Board of Nursing. Might I suggest we tighten it down - and I'm looking for the section under 'advanced nurse practitioner' - I'm not sure exactly where it is." CHAIR JAMES noted the legislature has been working on adding language throughout the past few years. She reiterated that this was required to allow nurse practitioners to operate in the rural areas where a physician isn't available. They can contact a physician and are able to pass on that authority given to them by phone. Chair James said, "To me that's a separate issue, if you really want to know what the difference is, we need to find that in the statute where it is defined, it probably is also in regulation." Number 0183 REPRESENTATIVE OGAN expressed his concern that it could be interpreted broadly. He indicated, for example a nurse's aid can issue a certificate if it's just under AS 08.68. CHAIR JAMES informed Representative Ogan that is not true and explained "advanced nurse practitioner" is a title, a person has to qualify for that certification. REPRESENTATIVE HUDSON mentioned HB 2 amends AS 28.10.181, which is licensing and making reference to the advanced nurse practitioner under AS 08.68. He said, "Typically speaking, that's what we do. We just draw reference to that which is the nurse practitioner. That's the nurse practitioner's section within the statutes." CHAIR JAMES said she agrees, but believes what Representative Ogan is asking what you have to do to qualify for certification. REPRESENTATIVE HUDSON indicated it doesn't matter for this purpose. REPRESENTATIVE OGAN stated, "I think we could clear it up by amending the bill to say [AS] 08.68 -- that 410 - there's a definition of advanced nurse practitioner in the bill and I would move that as an amendment, just as a technical amendment." MS. COTTING noted the bill drafter didn't think it was necessary. CHAIR JAMES asked Ms. Cotting to contact Mr. Ford since she isn't aware of another reference to nurse practitioners under AS 08.68 and in 410. If that's the only place it is, then that would be perfectly okay there. Number 0235 REPRESENTATIVE SMALLEY asked Representative Ogan, "In the 410 section, is it defining only nurse practitioner, or is it specific to advanced nurse practitioner?" He also said he is wondering if it's even necessary. REPRESENTATIVE OGAN replied that he didn't know if it was necessary or not. He indicated, under AS 08.68, a certified nurse's aid could issue one of these. You may leave a loophole. CHAIR JAMES said she doesn't feel uncomfortable with this and referred to Anne Lilley's title, "Advanced Nurse Practitioner" is capitalized in her letter. Chair James explained that it's a title not a definition. CHAIR JAMES called an at-ease at 8:20 a.m. and called the meeting back to order at approximately 8:21 a.m. MS. COTTING, after speaking with Mr. Ford, said the bill as written would be referring to the whole chapter which regards licensing as a whole procedure, not just a definition of a nurse practitioner. REPRESENTATIVE OGAN removed his motion for the amendment. Number 0284 REPRESENTATIVE HUDSON made a motion to move HB 2 out of the House State Affairs Standing Committee with individual recommendations and the accompanying zero fiscal note. There being no objection, it was so ordered. HJR 7 CONST AM: INITIATIVE/REFERENDUM PETITIONS HB 45 INITIATIVE/REFERENDUM PETITIONS Number 0300 CHAIR JAMES announced she would like to hear both HJR 7, "Proposing an amendment to the Constitution of the State of Alaska relating to initiative and referendum petitions," and HB 45, "An Act relating to initiative and referendum petitions; and providing for an effective date," together. CHAIR JAMES called for a brief at-ease at 8:25 a.m. and called the meeting back to order at approximately 8:26 a.m. Number 0328 REPRESENTATIVE BILL WILLIAMS read his sponsor statement: HB 45 and its companion measure, HJR 7, were introduced to ensure statewide support of an issue prior to being put before the voters. The legislation would require signatures from 15% of those who voted in the preceding general election in at least 75% of the house districts for a question to reach the ballot. Currently, because of our population dispersal, initiative sponsors can easily gather the required signatures from single areas of the state. The current system does not require a statewide perspective in determining which topics will appear on the ballot as amendments to state law. I am concerned that the whole of Alaska will suffer as question after question, of limited perspective, is placed on the ballot. I urge you to support this legislation. REPRESENTATIVE WILLIAMS referred to the committee packet which includes the summary of signatures gathered for an initiative vote on the 1998 ballot sorted by election districts, including the number of signatures gathered and whether the election district would have qualified under HB 7 or HJR 45, and the section of the constitution to be amended by this legislation. Also included is a table showing the percentage of the state population in Anchorage since 1990, tables showing the population of Anchorage from 1930 through 1970, a chart showing the population of the growth rate in Alaska's five largest boroughs, and excerpts of the Constitutional Conventional minutes regarding those subjects. REPRESENTATIVE OGAN asked Representative Williams what recent petitions or initiative issues, that have been on the ballot, does he feel that maybe would not have passed if this were in place? REPRESENTATIVE WILLIAMS replied, "I wouldn't say any of the initiatives wouldn't happen. What I'm saying is that you get a better perspective from the whole state rather than one area. As you can see on the billboard (initiative) for instance, that was on this ballot, most of it came from one area and that was Anchorage. And, I'm sure that it may have passed, but what I'd like to see is these people that are getting the signatures, that they have to get an overall state perspective rather than just Anchorage. Anchorage is, as you see is, we have an influx of new people each year based on out-of-state (indisc.) gather in the Anchorage area." REPRESENTATIVE OGAN asked, "In order for this bill to be enacted we have to - the constitution would have to be amended." REPRESENTATIVE WILLIAMS said he believes that's how it reads. Number 0389 REPRESENTATIVE OGAN said, "If I'm interpreting it right, that means that in two-thirds of the districts in the state, 15 percent of those people within two-thirds of those districts will have to sign the petition." REPRESENTATIVE WILLIAMS agreed. REPRESENTATIVE OGAN remarked it's currently 10 percent within two-thirds. REPRESENTATIVE WILLIAMS added, 10 percent of those who voted in the last election. REPRESENTATIVE OGAN reiterated, "If they get one person, in two-thirds of the districts, and 10 percent of the aggregate of the people that voted in the election, that qualifies (indisc.). Is that correct?" REPRESENTATIVE WILLIAMS replied that he believes that's correct. REPRESENTATIVE HUDSON asked if 15 percent is an arbitrary number. REPRESENTATIVE WILLIAMS responded that it is. Number 0405 REPRESENTATIVE HUDSON stated, "I really like this. ... I have thought all along when we got to for example issues like the wolf snaring and the billboard initiatives, and things of this nature, they are important public policy. And expanding those to a broader required sector of the state of Alaska and a little higher percentage of them - we're only talking 15 percent of the registered voters as opposed to 10 percent." CHAIR JAMES pointed that out Anchorage holds approximately one-half of the population of the state. If you don't live in Anchorage, you're in a minority population and we need to have our voices heard as well - to spread it around the state is a real benefit to that. She mentioned we've seen the state of California manage their government by their public vote and, in our representative form of government, that is not the way it was intended to work. CHAIR JAMES noted she is very supportive of this issue so everyone's voice can be heard and referenced legislation that was introduced last year regarding petitioners being paid for obtaining signatures. She said it was found, by court cases, that we were limited in that area, people can pay people to do things. Chair James said she believes it's distressing when it can affect public policy. However, we want to protect our rights and this extends our rights to assure the minority has a place in that. REPRESENTATIVE COGHILL indicated he likes the 15 percent. However, in districts that are large but sparsely populated, the ability to get 15 percent might be a problem. REPRESENTATIVE WILLIAMS pointed out a good example would be the district that covers Metlakatla to Kodiak. He said he believes it would work with the types of communication and the transportation system that currently exist. REPRESENTATIVE KERTTULA said she doesn't believe the Division of Elections can accept fax or E-mail votes for petition signatures. REPRESENTATIVE OGAN asked if a study has been done in Alaska's four largest communities [Anchorage, Fairbanks, Juneau and Ketchikan]. He said, "Obviously you're trying to raise the bar to what gets on the ballot. ... I guess what I'm getting at is I'd like to see rural Alaska be less disenfranchised in the initiative process because a lot of these things are wildlife initiatives that affect them very directly. And, I think it would be wonderful if they had to fly around in a super cub, land in a village and start going door to door, they'd probably get run out at that point - 'Do you want us to stop snaring wolves,' you know. But rural Alaska is disenfranchised in the process because in urban Alaska, they can sit out there in front of the population centers - the way it's written." REPRESENTATIVE WILLIAMS deferred to the Division of Elections. Number 0503 DANNA LATOUR, Administrative Officer, Division of Elections, Office of the Lieutenant Governor, explained the division's responsibility in this piece of legislation is essentially the same as they currently operate under. This bill would require, when they do their checking and verify signatures, that they would have to assure through their computer programming change that signatures have been verified, equal in the number of 15 percent of the people who voted in the last general election in 30, or three-quarters of the state's 40 election districts. MS. LATOUR explained there are 25 election districts, counting the Kenai Peninsula and the Mat-Susitna [Matanuska-Susitna] Borough, those would be our urban districts. She noted the Division of Elections feels this makes a change in their policy or the way they do their work. The $3,000 fiscal note represents the minor changes to their mainframe program that verifies those signatures. CHAIR JAMES remarked at least five of the rural districts will have to participate in order to get the initiative on the ballot and mentioned there are 25 in the urban areas. MS. LATOUR replied that's correct. CHAIR JAMES mentioned there are 15 and at least five would have to participate in it. She said she believes that's better than it currently is. REPRESENTATIVE OGAN agreed with the correction [three-quarter not two-thirds]. Currently it takes one signature from a district, you have to have 10 percent of the aggregate of everybody that voted, and at least one signature from two-thirds of the House district. CHAIR JAMES agreed that one signature from two-thirds of the House district isn't very many. REPRESENTATIVE OGAN added that it's not like a consensus in that particular House district. REPRESENTATIVE COGHILL asked if it would be more difficult to get petitions in the more sparse areas than it would be in the more densely populated districts. He remarked he didn't believe doing it electronically would work, that means we're going to have to go from village to village in some of the rather large districts, maybe the 15 percent becomes a hindrance for them. Number 0546 MS. LATOUR explained how an initiative petition is circulated and how they receive them. Typically the three prime sponsors on an initiative petition, and the initial 100 sponsors recruit additional sponsors for an initiative petition. She further stated, "This bill, I guess would place more onus on those sponsors to make sure that they have representation throughout the state so they may go search out someone who looks at their issue favorably, in a town like McGrath, and find a person in that community who would serve as a signature gatherer. So, it's going to take more work on the side of the prime sponsors and those people backing the issue." MS. LATOUR continued, "As far as getting the petition booklets back, our requirement is that those booklets be submitted to our office as one unit. So, it would take more time to gather those booklets from across the state as the one-year calendar, the clocks, you know continues to wind-down. Other than that, I don't know any other impact it would have other than the sponsors being responsible for finding people to circulate the petitions out there." REPRESENTATIVE COGHILL remarked that does answer his question, getting sponsors in each locality obviously is going to be very important. And, of course the empty petitions can be transmitted electronically and then the sponsor would have to be designated by whoever is driving that petition through. Number 0565 MS. LATOUR informed the committee members that each initiative petition booklet has to be sequentially numbered. She indicated that she didn't recall talking about the prospect of faxing an entire booklet. Ms. LaTour said, "We staple those booklets as we're going through the verification process, we don't really require that they come back to us stapled. But knowing that the booklet ... comes back to us in the same condition that it went out tells us that someone didn't take that book apart and spread those pages out through a number of locations. It's the responsibility of the petition gatherer to make sure that they're with that booklet to gather those signatures. And so for that reason, we've never considered electronically transmitting the booklets or having prime sponsors transmit those booklets in that fashion." REPRESENTATIVE HUDSON reiterated that he likes the idea of moving up to 15 percent in districts, and 30 as opposed the 27 for the very reasons that were spoken here. Now they can't just be done in the urban parts of the state. They'd have to go out to rural areas as well. He concluded that he believes that's really good when you're amending the constitution. Representative Hudson asked how difficult it would be to get 15 percent of the voters at any given time. CHAIR JAMES said 15 percent of those who voted in the preceding election - that's probably not very many even if there was a poor voter turnout. She said she believes 15 percent would be a reasonable number. CHAIR JAMES remarked, "To follow up on Representative Hudson's, I like the three-fourths only because of the numbers we've already calculated, that there are 25 urban areas, and so, if you want to get just to rural areas, that really isn't representative of the rural areas. At least you got five out of fifteen, that's a third of them, and so that's more fair I think to get - assuming that we have a piece of legislation that's proposed that might be detrimental to the people in the rural areas and that they would want to have a strong voice against it. It may well be that that's where the issue comes from - is that we are trying to do something for them and not against them but to have a standard responsibility." REPRESENTATIVE HUDSON asked Ms. LaTour to provide the committee an accounting of how many voted in each of the districts so that the committee could determine what 15 percent would be [provided in the packet]. He reiterated that currently some districts only have to have one. REPRESENTATIVE KERTTULA implied the petition process in Alaska was written to be an easy way for people to get things onto the ballot. She asked Ms. LaTour if she knew of the constitutional history behind that and why the drafters would have drafted it (indisc.) that. MS. LATOUR replied no. Number 0627 BETTY ROLLINS testified via teleconference from Fairbanks in opposition to HB 45. She said, "It's obvious that none of the people that are speaking there today have ever stood on a street corner or attempted to get an initiative on the books. If you're Mr. George Soros, with a billion bucks in your pocket, you probably can do it. Other than to thwart and deny the Alaskan's the right to the initiative process, I can see absolutely no reason for the change in this legislation." MS. ROLLINS referred to the Constitutional Convention, pages 1028, 1136 to 1142, and pages 1180 to 1183. She stated, "You'll find that they ... tried to make it 15 percent, some tried to make it 8 percent - the ones that did not want the citizens to have an initiative process tried to make it 15 percent. And, it was very evident ... that was the object. So, they finally did decide on 10 percent and the three-fourths. And, at the present time, I really believe if state employees, Division of Elections, and other people would seriously look at some of these petitions -- number one, the question was also asked how many of these petitions would have passed this past election if the 15 percent were in effect, none, absolutely none. And if you look back at what happened ... most, I think all but one had to go back the second time. They turn them in, and then if they don't have enough, they come back and get more signatures within a specific time period. And, there's only one that had an adequate number of signatures during this last go-around. So absolutely none of them would have made it, even under Sharp's bill of last year. And under this, 15 percent is a lot, a lot, a lot of people, let me tell you, I've stood on a street corner." MS. ROLLINS continued, "Now I find that the problem, and there's really nothing you can do about it as you say there's court cases that say you have to be able to pay sponsors. But in this last election, I was very interested because of the marijuana initiative. There were two people ... who gave an address of ... Lyman Lane in North Pole. I tried to get in touch with these people because I wanted to talk to them. These people don't exist in the state of Alaska. I have reported this to the Division of Elections. I reported to the Ombudsman. They have no driver's license, they've never applied for a permanent fund - any record that I could have checked, I have checked. And there's another individual, who in an eight-week period got almost 8,000 signatures. I've stood on a street corner, I asked if they could possibly check and find out if these signatures were valid, some way to check." MS. ROLLINS concluded, "I think, if we should sort of put our finger in the dyke and try to get rid of some of these leaks of our initiative process, maybe we wouldn't have the problems. People with money can get anything on an initiative - the marijuana initiative, the wolf snare, that was money from out-of-state. Matter in fact, the marijuana initiative was never written by an Alaskan. It was written by 'Americans' for Medical Rights' in California, ... it was funded by George Soros. These are the problems that we have in Alaska. And, because of their rights and the court cases, there's very little that can be done about some of these things. But at least we could check when we find problems with an initiative. People that don't exist, we could check and find out about them." Number 0685 CHAIR JAMES referred to Ms. Rollins comment that "None would have passed under this new rule." Chair James said she suspects they may have passed anyway, however, they would have a different configuration of signatures and that might have made it more difficult. As more and more people are moving into the Anchorage area, and many of the rural people are moving into the urban areas, we get a more disproportionate representation of the people in the sparsely populated areas. Anything we can do to be sure that their voice is heard is a positive step. CHAIR JAMES explained "mob rule" is when we make decisions by poles, petitions, or anywhere where the influence over the decision-making process is done without taking a vote, and without being sure that you have proper representation from all the districts. We have a district plan in our government to protect the people in every district to give them a voice. Alaska is probably more out of balance on those issues than any other state. She said, "As long as we have no surface transportation to many of the areas in our state, it's going to continue this way because as rural people get employment, they're going to have to come to town to be able to get their employment. So we want to be sure that we protect the entire state." CHAIR JAMES further stated, "We keep saying, 'Well all these other states do it this way,' I have that favorite saying, 'We don't care how they do it out there. We have to do it our way and we have to deal with our conditions and our 365 million acres of land in Alaska, with shortly over 600 thousand population. That's a different kind of configuration than any other state has to deal with. There's no one who has those kinds of proportions." Chair James asked what are the other committee assignments for HJR 7 and HB 45. Number 0721 KYLE JOHANSEN, Legislative Aid to Representative Williams, replied the next referrals are Judiciary and Finance Committees for HJR 7, and Finance for HB 45. REPRESENTATIVE OGAN mentioned he would provide minutes from the Constitutional Convention on referendums. CHAIR JAMES suggested, "It might be, Representative Ogan..." [End of tape]. TAPE 99-1, SIDE B Number 0001 CHAIR JAMES stated she is very supportive of the constitutional form of government because it sets the parameters. And, before the parameters are changed, you have to have good reasons. It's not necessarily easy to do that. She pointed out, "When we do things by popular demand, it does not necessarily always fall under the purview of our constitution. So, I think that's really an important thing to see what they were thinking at the time. However, I'm past understanding that they couldn't possibly have thought of everything. Most of the time, when your setting up parameters, there are some people who can figure out how to make it to their advantage. And what happens when too much - of people taking advantage of something - that they couldn't have seen when they wrote the constitution, or couldn't have thought of - then that's when we need to make an amendment." CHAIR JAMES summarized that we need to be sure that we follow the proper steps in making an amendment. To get an amendment out to the people to vote, 67 percent of the districts have to say yes we want that on the ballot. So, that's a real control for our constitutional amendment and we should not change our constitution easily. Number 0037 REPRESENTATIVE COGHILL called attention to the statistics included in the committee packet. He reported 38 percent of the districts passed the last five referendums. This is an average of 15 districts. This also indicates that the urban districts can have a tremendous amount of clout. REPRESENTATIVE COGHILL reiterated that he supports this initiative because they're going to have to go through the standing rules to get this. He also mentioned he is concerned about the logistics of getting petitions out through rural areas and that it hasn't been answered to his satisfaction. He concluded that he supports this initiative simply because it makes the vast majority of our districts accountable to have changed our constitution. REPRESENTATIVE HUDSON stated we are trying to strike a balance to make sure everybody is equally represented. He declared his concern is in the 15 percent of each of the districts and would feel somewhat more comfortable if that were 10 percent because it would still require some effort and initiative. And, of course, it would require that they go out to at least three more districts - which isn't currently required. REPRESENTATIVE HUDSON said he believes the one vote in any one district is wrong. He mentioned he would like to have more time to consider this legislation. CHAIR JAMES explained she understands the current reading is you have to have an accumulation of 10 percent of the voters that voted in the last election, and they have to be from at least two-thirds of the House districts, one in a House district is enough. Isn't that correct? REPRESENTATIVE HUDSON replied it's currently 15 percent in each one of the 30. CHAIR JAMES further remarked, "You're talking about - under this - but under the old way, they could get one and that's not enough. That's not enough particularly when almost every decision that we have made ... in the legislature, and every initiative that is passed, has a different effect on the urban areas than it does on the rural areas." Chair James said she doesn't know if 15 percent or 10 percent is too many, but one is not enough. She said she believes they need to have some kind of a challenge to be sure that -- even 10 percent isn't a popular vote in that district. A small number of people could put an initiative on the ballot that was totally averse to the area. Number 0149 REPRESENTATIVE SMALLEY explained his understanding of an initiative and a referendum petition is to make readily available the public's ability to bring about change in government. And, we're talking about representative government in the House and the Senate by representation by the majority. He said these changes actually redefine majority. It's not necessarily the majority of the population, it's the majority of the districts represented within the state. REPRESENTATIVE SMALLEY noted his concern is that we're changing the definition of representative government. He said, "Is it up to change - to strike the balance as you suggested because we're changing the stripe." CHAIR JAMES said that she understood Representative Smalley's concern. She further stated, "It's true that we are changing the stripes of this and that 51 percent then, instead of the two-thirds in the existing bill if (indisc.) now - then 51 percent of the districts could make the decision to put this on the ballot. However, that was only one vote out of many of districts. So, I think that, if we're going to stand by your definition of the majority which is in cases of legislation, 51 percent - then that would mean that in order to get it on the ballot we'd need 51 percent of the people in at least 51 percent of the districts - and if we were going to get a true majority view. And so, I don't think that in the initiative process that it's intended to be strictly with the representative form of government, but certainly we have to protect the minority. That's the whole issue of parliamentary law is that the majority rules, but the minority's heard. In this particular case the minority is not heard, so I think we need to make some changes. I don't know what the changes need to be but I think we need to expand that." REPRESENTATIVE SMALLEY explained it wasn't his point to change the 51 percent. Changing it to three-quarters is the problem that he is having. CHAIR JAMES agreed. She said the only time she was convinced that the three-quarters was necessary was when she received the numbers that 25 percent of the districts could qualify as urban and only 15 percent in the rural area. She further stated, "If you even stay with two-thirds, it's only a couple of them. And that's too small a percentage of the rural area to satisfy me. We have to have a bigger representation I think, otherwise, they're run over with a truck." Number 0221 REPRESENTATIVE KERTTULA said she would like to know why the drafters actually made it so broad because this does change the constitution. Secondly, no matter what happens, everyone has the right to vote and has less of a concern because this is a route by which individuals can get things on the ballot where the whole state gets to vote. She stated, "If we are concerned about impacting rural Alaska, I too am concerned about the 15 percent because I think that in some of the rural districts that's going to be extremely hard to get. And that in a weird way it kind of turns around the problem and may make it more difficult for those people to have a voice." CHAIR JAMES announced she is willing to hold the bill for further consideration. Number 0275 REPRESENTATIVE HUDSON offered Amendment 1, page 1, line 11 of HJR 7, remove 15 and replace it with 10 percent. That there be at least 10 percent in each House district. to at least ten percent of those who voted in the preceding general election in the house district. REPRESENTATIVE OGAN objected. He said, "If we lower it to 10 percent, then I would like to see it all the House districts in the state. And there's precedence for that, and I have, in a committee packet on another bill, a breakdown of different states and what they have done. ... I guess I might move that as a friendly amendment to the amendment if the mover of the first amendment doesn't object and I'd certainly like to have the bill sponsor weigh in on that. I could tell you that would get my vote on this bill." CHAIR JAMES stated that amendment is too complicated, that they should handle that in a separate amendment. REPRESENTATIVE OGAN maintained his objection. He suggested the bill should not be amended at this meeting, possibly at the next meeting. Number 0362 CHAIR JAMES asked for a roll call vote on Amendment 1. Representative Hudson, Smalley, Coghill, Kerttula and James voted in favor of the amendment. Representative Ogan and Whitaker voted against the amendment. Amendment 1 of HJR 7 passed by a vote of 5 to 2. REPRESENTATIVE OGAN asked for a point of clarification. He asked, "Did we amend the House Joint Resolution." CHAIR JAMES confirmed that the amendment was made to HJR 7. She pointed out the committee also addressed HB 45. CHAIR JAMES suggested assigning HJR 7 and HB 45 to a work session; creating a CS and then bring that to the committee. HB 74 SALARIES FOR CERTAIN STATE OFFICIALS Number 0433 CHAIR JAMES announced HB 74, "An Act relating to salary caps and to the power to transfer certain positions to the classified service and entitlement to longevity increments for certain state officials," is before the committee and that she didn't plan on moving it out of committee today. REPRESENTATIVE KERTTULA stated that she had a conflict with this piece of legislation, because her husband, her sister, and her cousin all work for the State of Alaska and could be affected. REPRESENTATIVE SMALLEY objected. REPRESENTATIVE OGAN said, "Please consider this bill, not as an end, but as a beginning in making the necessary reductions to our new fiscal reality. You have in your packets a comparison of the governor's budget and the legislature's from 1996 through 1999. Also provided is a summary by Pam Varni from Legislative Affairs outlining the very responsible consistent reforms the legislative branch of the government has taken to respond to public demands for a leaner more efficient government. Please take time to review it. It is an excellent model for the Administration to use as an example of how to do more with less." REPRESENTATIVE OGAN continued, "Also in your packet is a fiscal note that shows a savings of at least $3 million in salaries in certain partially-exempt, and exempt persons within the Administration were capped at a range 21, step F. I fully expect the Administration to raise arguments of the people who supervise, now being paid less than those they direct. This bill is not unique in that regard. In fact there are many employees who not only make more than directors, or commissioners; they make more than the Governor does. Perhaps someone in the Administration could tell the committee how many employees in our state have a high salary higher than the Governor's. I expect the Administration to show us the list of some 32 legislative employees who are not capped at 21-F." Number 0468 REPRESENTATIVE OGAN said, "I recognize that these employees, with a high degree of education credentials or responsibility, should be offered more in wages. In HB 74 I have intentionally provided a section for similar exemptions for the Administration. And we're open to expanding that list and I think a good example of that is something I read in the newspaper about a gentleman who has to be a doctor, whose a director of a division, and certainly that would be a rational exemption. I also expect to hear the argument that qualified people will not work for salaries that are too low." REPRESENTATIVE OGAN continued, "The expertise argument fails on at least two counts. First, many of these political positions are political. If expertise and institutional knowledge were important there would not be a huge turnover in these positions. ... With each administration that comes in a lot of people that had these positions were removed, not because they were doing a poor job, but simply they were in the wrong party. And that is, of course, the prerogative of the Governor, because they serve in his pleasure. If these positions were advertised at a 21-F, as the legislature currently offers, the Administration would undoubtedly find many applicants, especially during this downturn period. I think there are at least 600 people that were laid off a week or two ago from one of the major oil companies and I imagine a lot of those guys would be good managers. They might have the wrong letter behind their name, but they would be good managers." Number 0493 REPRESENTATIVE OGAN continued, "For example, our new Commissioner, Ed Flanagan, has taken, as have other administrator's in the past, pay cuts when he was promoted. In Mr. Flanagan's case it has been reported the cut would be about $3,000 a year as he goes from deputy commissioner to commissioner. Perhaps the Administration could give other examples of cuts for promotions." REPRESENTATIVE OGAN said, "I have also heard comments about the recent wage and benefit study showing top-level ranges being within the standards of the private sector. Madam Chair, could this be the same study, which was criticized just few short weeks ago by the same Administration as being politically motivated and not accurate? Let's take a look at the executive summary of the study. On page 2, if you have it in your packet, the executive summary shows": The costs of benefits for state employees are substantially higher than the survey participants. Now I think the study shows that the high level of exempt employees, their salary compensation is fairly consistent. But it also says the state contributions toward medical is 31 percent higher than the private sector. The state contributions toward SBS (Supplemental Benefits System) and PERS (Public Employees' Retirement System) is 25 percent higher and paid time off benefits for state employees is 48 percent higher than the average surveyed participant. REPRESENTATIVE OGAN further stated, "The question of whether or not a person takes a professional position needs to be asked, not on salary alone, but on the entire package available. And we haven't even addressed in those figures the travel, and we've got some information in there on what the travel of a lot these people are and the airline miles. Now I know, I'm consistently taken to task, as a legislator, for my high salary, and my opponents always point out what the total package for the cost of me being a legislator, which includes my office account, any travel that I do, my moving expenses, and those. And they all say well you max x-amount of dollars per year. And if we look at it critically with that point of view, some of these folks are pushing $200 thousand." Number 0528 REPRESENTATIVE OGAN said, "The committee needs to know what the total typical benefit package is worth for a range 28, step F position. I respectfully ask the chair to request that information. This is a political business, not a corporate performance driven entity. Many of the positions in this bill are political appointees, first and foremost. I do not mean to suggest that credentials are not necessary, but experts of the wrong political persuasion are simply not hired for these positions. In other words, expertise is not always the primary hiring criteria." Number 0535 REPRESENTATIVE OGAN continued, "This Administration contains at least 30 persons who once worked for the legislature. Just like our staff, they once traveled to Juneau twice yearly without reimbursement, they managed two residences, worked long hours and received no travel budget or area pay differential. And I would suggest Madam Chair that we have some pretty fine employees around here who are pretty highly qualified. And actually I know some employees who are pretty highly educated. .... With a few exceptions these employees are all capped at range 21-F. Why were these professionals originally attracted to the legislative jobs? Were they any less talented or ambitious when they held positions here? The point is, we have similarly qualified professionals working with vastly different compensation packages." REPRESENTATIVE OGAN added, "As members look at these financial notes, please also consider all the benefits and additional perks. The Legislative Budget and Audit Committee examined the travel of deputy commissioners and directors and we have that handout. Please note the costs to the state with airline miles being accumulated as additional personal benefits to all who travel. We don't address that in the bill, but I would just like to state for the record that if everyone in the state was willing to give up their airline miles as a perk, I would certainly be willing to go along with that and as we build up our accounts - be able to credit those for our state travel. What's good for the goose is good for the gander." REPRESENTATIVE OGAN asked, "Can we afford to make further legislative cuts and leave the Administration whole? Should we eliminate positions rather than reduce salaries? Should we reduce benefits and leave salaries and positions alone?" Number 0564 REPRESENTATIVE OGAN followed, "I do not have the final answer. I do know the governor has asked the private sector; our constituents to sacrifice and cut their budget. As the Governor himself has emphasized we are all going to have to make some adjustments. I have asked the persons affected by this bill, many I know very well, to please suggest their ideas for responding to our revenue shortfalls. I am asking them to step up, as they support their governor who is asking the public to pay taxes." REPRESENTATIVE OGAN closed, urging the committee to use this bill as a place to find facts, to ask hard questions, to encourage solutions and not controversy. Let it be a beginning point for those, who the public looks to for leadership, to do so by example. He said, "As we discover positions, which should be exempt, we may add them into the section in the bill established for that purpose. After all that has been examined, and if we find adjustments to the caps in this bill are fair and necessary, I am prepared to discuss those changes." REPRESENTATIVE HUDSON asked Representative Ogan if his concept takes into consideration the level of responsibility in the pay structure. REPRESENTATIVE OGAN replied, "Yes sir, I think (indisc.--a teleconference network glitch) as far as the responsibility with the governor, and many directors, and many deputy commissioners, and even commissioners are paid more than the governor. And many directors are paid more than commissioners." Number 0579 REPRESENTATIVE HUDSON said he believes that is a wrong comparison. For example, director of the Alaska Marine Highway, is responsible for one of the largest passenger liners in America, which entails managing 700 personnel, a fleet of ships, and all of the politics and rigors of the schedule. REPRESENTATIVE OGAN mentioned that he has taken into consideration, there being certain exemptions, as stated in a section of the bill on page 2, line 4. Some people have a certain level of responsibility that the committee may wish to give deference to. There is something wrong with the system when people that have the ultimate responsibility are paid less than the people under them. Number 0627 REPRESENTATIVE KERTTULA asked whether or not there was going to be a geographic differential, for example are people in Nome going to get paid the same as people in Juneau. REPRESENTATIVE OGAN said that's correct and urged the Administration to use the legislature as an example. REPRESENTATIVE KERTTULA mentioned some of the legislative staff don't work year-round. REPRESENTATIVE OGAN stated the legislative staff does work year-round. CHAIR JAMES clarified that some employees work year-round and some don't. REPRESENTATIVE KERTTULA referred to Section 4. She said it wouldn't allow for any pay increments for the deputies. They could never get a pay increase once they came in that would be as it is drafted. REPRESENTATIVE OGAN replied that's correct. If they're at their maximum pay range, that's the maximum they could get. REPRESENTATIVE KERTTULA asked, "Was it your intention to never allow a pay raise, though, because that appears to be how it's written right now?" REPRESENTATIVE OGAN replied that would be correct. Number 0647 CHAIR JAMES asked, "We're talking about political appointees, not people that are hired for long periods of time. We're talking about political appointees in this case aren't we? ... Political appointees not people that are hired through the hiring process ... in collective bargaining and those kinds of things?" REPRESENTATIVE OGAN replied, "That's correct Madam Chair. It's simply political appointees and it's pretty well defined I believe and they'd be held at the same standard as our legislative employees because they are essentially political employees. I mean we hire them at our will and they serve at our pleasure." REPRESENTATIVE HUDSON said, "We are talking about deputy commissioners, assistant commissioners, and directors. I guess the problem that I have is that we have many people down beneath the directors and the commissioners who are already up in range 22 to 24 -- and the high salary grades because they've been around for many years. My concern is that, and while I accept the prime sponsor of the bill as a point to start from and to really start thinking seriously about how we can reduce are cost of government, we have collective bargaining, we have responsibilities and they're almost contractual responsibilities. I think we'd have to really look seriously at whether or not we don't have to go back; if we're going to take care of the division director are we going to then be forced to go back in and take care of everybody else that would earn a higher salary, because they've been there longer or because they have earned it and they're collectively bargained for a particular position." CHAIR JAMES stated, "This is my seventh year here. And I've been concerned about the parameters in which we hire legislative staff. ... They are more restrictive I believe than the Administration. But for legislative staff there is the number movement. If you started at a 21 and ... the next year you get a merit increase. But if you get to 21-F you're at the top and you can't go any further. Some of these folks that have been hired at 21 already are at 21-F because they have been working elsewhere in the State ... and are qualified for a higher appointed amount. It's very difficult to compare ... with other employees, where legislative employees are hired for seven days a week, 24-hours a day ... with no overtime." People that are not from Juneau have to pay their own way and we're not having a shortage of finding people who want to work. It is like comparing "apples and oranges" when people are hired to work for the Administration, and when people are hired to work for the legislature." TAPE 99-2, SIDE A [Approximately three minutes of testimony was lost due to recorder malfunction]. Number 0001 REPRESENTATIVE OGAN said that what spurred this legislation was a discussion with some high-level executives of the oil companies attending the Alliance Conference. One of the oil companies said that their executive budget has been cut by 50 percent. They have profit-driven programs as opposed to constitutionally mandated programs, which is different, but the reality is that they are on the same fiscal stream. He said that he has yet to see any cuts on the upper echelon of the bureaucracy. The legislature has made a lot of cut backs, but the upper levels need to be made to reorganize. Number 0056 TOM BOUTIN mentioned he has lived in Alaska since 1973 and has lived in Juneau since 1983. He said supports HB 74 and that he believes the government needs to move toward solving its fiscal problems, before asking the private sector to help. He said, "State government took its oil money and bulked up and now it has to adjust to reduce circumstances, that happens in the private sector very often. Alaskans have a government that was built by oil. Now a process needs to take place to determine how much government we can have without oil. This bill brings an important stakeholder, the executive branch management and professionals into that process and certainly gets everyone's attention. I think the legislature needs to do that and it needs to be done very soon. Before coming here today I talked with people who currently have state government positions that could be directly impacted if HB 74 became law. I think if you polled state employees the majority might favor this bill over alternatives. I would not be surprised if those who would have their salaries reduced by this bill would favor this level of pay roll reduction over a state income tax." MR. BOUTIN continued, "One person pointed out that salary cuts that might result from HB 74 would be before tax and therefore the real impact on take home pay would be better. I hope everyone could agree that state payroll reductions would certainly would be more efficient than new taxes and have a much smaller impact on the Alaska economy. It will be interesting to what the fiscal notes say; none were available when I checked yesterday." MR. BOUTIN said, "Like many people in Alaska that I know - I've worked for both the private sector and government. In working for the government, I worked first for the Alaska Department of Revenue and then for the Department of Natural Resources. The positions were in the professional service and therefore exempt or partially exempt. The Department of Revenue job was paying about $73 thousand a year; when I took the job at the Department of Natural Resources that job paid $83 thousand a year. Public service should not pay as much as the private sector. I have never worked for a private sector firm which gave any where near as much paid vacation, any where near the 13 paid holidays, nor the other benefits, such as not having to pay social security and having the Supplemental Benefits System, the additional Public Employee Retirement System and a Deferred Compensation Plan." MR. BOUTIN continued, "I have to tell you it was an eye-opener for me to see people not only take sick leave when they were ill - something I never encountered in the private sector, and also take sick leave when family members were ill. Most importantly of all, all of my private sector jobs had a normal work week of six, ten-hour days including my first job in Alaska, which was a logging engineer position at 'Ketchikan Pulp'. So, as far as I know, professional positions, and that is what HB 74 impacts, continue to be six tens in the private sector. The private sector manager has to turn a dollar into jobs, costumer satisfaction, and at least a dollar ten or a dollar and a quarter. Productivity is measured and managers either earn their keep or they show them the door." Number 0127 MR. BOUTIN said, "The type of budget cut proposed by HB 74 is not unreasonable given the budget cuts that need to come. Hardly a week goes by that some large lower 48 private sector firm doesn't announce major payroll cut backs. Now Alaska government has to cut back; it's unfortunate, but it's not unhealthy. It would be unhealthy to not first reduce the costs of government. I think that cutting the Alaska government payroll must take place, and beginning at the higher echelons is good process and good management." MR. BOUTIN continued, "The rank and file should be much more willing to understand the other changes that need to come if a professional staff has first had to tighten its belt. If General Motors had just lost all sales of the Cadillac, Oldsmobile, Buick and Pontiac divisions, cutting the pay of top executives and grounding the corporate jet fleet would be a meaningful symbol and an important preliminary step to solving the problem. I think symbolism is important in managing; I think that bringing every part of an organization into the solution is good process. Sometimes government people like to talk about the public as their customers; I think that before you go to your customers to try to raise prices, you need to reduce your own costs. HB 74 is a small, but an important step." MR. BOUTIN further stated, "State government is spending at least $3 million more than it is taking in each day, about $7 thousand per minute based on a 7.5-hour day, therefore, I'm expecting many measures like HB 74 to be enacted. I think that the private sector is expecting measures like this to be implemented before any discussion of new taxes, I know I am. I keep reading in the newspapers that this budget situation needs to be explained to the public; the thinking seems to be that a person who works 30-hours a week at K-Mart and 30-hours a week at Costco, with no benefits, would say fine to an income tax if only she understood how much state revenues have diminished. I think it's curious that no one is first trying to bring the 21 thousand state employees into the process." MR. BOUTIN said, "HB 74 goes a long way toward doing that, a good beginning. I also think the public would take notice if it were quickly enacted. For several years now the Alaska legislature has shown leadership, taken the heat. HB 74 demonstrates the sort-of leadership that is needed right now." Number 0174 MR. BOUTIN concluded, "The final point I want to make is that in my experience, legislative staffers work very hard compared to Administration personnel. Of course there are hard working people in every administration, but I'd be quite surprised if anyone does not believe that legislative staffers work harder. The key point is that every legislative staffer works hard, by hard worker I'm talking about people who come in early and work late, always working against deadlines, always producing. The Administration's managers can spend a lot of time traveling, going to meetings, churning, going to the Anchorage Board Room any Friday night, yet you call their offices on Saturdays and most of those people aren't at work; they don't work Sundays either. After a while you come to realize they do not intend to make up the work they missed when they were traveling and sitting in meetings. If the top pay of a legislative staffer is going to be used as a benchmark for government workers, then I don't think that any government pay level should exceed what the legislature pays even if oil goes back to $25. Please move this bill on behalf of the legislative staff that will be on this floor working this Saturday, and for the woman who works 30-hours a week at Costco and 30-hours a week at K-Mart just to make ends meet." Number 0203 ALISON ELGEE, Deputy Commissioner, Department of Administration, said that she is here on behalf of the Administration to oppose HB 74. The concern is one that Representative Hudson has already expressed. That is qualifications are very important for these positions, but the underlying responsibility is really the benchmark against which we determine our compensation policy. When you look at the responsibilities of the director level people, and the Alaska Marine Highway example is a good one, where the management responsibility includes management of several millions of dollars and several hundred employees on a year-round basis. It is difficult to compare that job with that of a staff assistant to the legislature. We need to be competitive not only internally to state government, but also externally to attract good qualified people to take these positions. She mentioned the Department of Administration prepared the attached fiscal note. MS. ELGEE explained, "There are a couple of points that I would like to make on the benefit analysis that was raised by Representative Ogan. He picked three specific areas of benefits that the study showed were higher than their comparables that they used in conducting that study. The overall benefit package, they said, was only 7 percent higher than the comparables. When you take apart the pieces, the retirement and benefits are identical to every public sector employee in the state of Alaska - be it a state employee or a municipal employee. And, that is also recorded by their 'KPMG' study, the retirement and benefits are identical. The health benefits are I think overstated in their comparisons, because they have compared a number of employees from outside of the state of Alaska that participate in managed care plan environments which we do not have available to use in this state." MS. ELGEE further stated, "When you look at a comparison that is a direct conventional plan comparison to the state of Alaska's costs, on the employer side our costs are running from zero to 8 percent higher. On the employee contribution side, our employees contribute as much as 50 percent higher than the comparables that are used in that study. And when you look at the paid time off benefits, you end up with a distorted comparison because what 'KPMG' did was take the number of days off, convert it to dollars, and then run it against a base level comparison where the dollars that you're starting with are substantially different. If it is look at it on a day-by-day basis, the people that we have working for state government in an annual and sick leave environment do have more paid days off than their comparables in the study. But the majority of our employees are in a personal leave environment and those employees actually receive less paid time off than the comparables that were cited." REPRESENTATIVE OGAN asked if Ms. Elgee would be affected by the passage of HB 74. MS. ELGEE replied yes. REPRESENTATIVE OGAN asked why didn't the Administration send a commissioner that does not have a conflict to testify on this. MS. ELGEE replied that the time demands on the staff varied and she agreed to do it. REPRESENTATIVE OGAN asked, "Is it the position of the Administration that they take no cuts in salary or benefits?" MS. ELGEE said she felt it's inappropriate to say that the Administration is unwilling to consider any kind of reduction, but they feel this approach is a wrong approach in terms of just taking across the board action that ignores the level of responsibility of the people that we're asking to perform these duties. REPRESENTATIVE OGAN asked Ms. Elgee if the Administration is willing to come up with some alternatives, with some changes. MS. ELGEE replied that she was not in a position to make that commitment, but would discuss that with the Administration. Number 0287 REPRESENTATIVE KERTTULA asked Ms. Elgee is she was the person who normally would come before a committee to discuss salaries and employment. MS. ELGEE responded yes, as Deputy Commissioner of Administration, this is one of her responsibilities. Number 0293 REPRESENTATIVE KERTTULA stated for the records, "For exempt employees, such as this bill would affect, they don't receive any overtime pay for any of the extra hours that they work. Is that right?" MS. ELGEE replied, "The employees that would be impacted by this bill, that is correct. There is no overtime compensation." REPRESENTATIVE HUDSON asked what percentage of our reduction would this represent - approximately. MS. ELGEE replied there is no one percentage reduction, because you're impacting people in the commissioner's offices that are anywhere from a range 23 to a 28. You're impacting directors that are at a range 26 but in a variety of incremental steps. So, the percentage reduction would be different for each employee. REPRESENTATIVE HUDSON asked if it would be 15 percent, 20 percent, 25 percent. MS. ELGEE said she would provide that information. Number 0310 REPRESENTATIVE HUDSON referred to the fiscal note saying that it provides for a cost savings of about $3.1 million. He said he presumed that was made according to the specific position and step that these affected members have at the present time. He said that he believes the actual fiscal note would be many, many, many, millions of dollars for this reason that you do not reduce the salary of the boss without going down through the scales and reducing the salaries of everybody that works for the boss. CHAIR JAMES stated legislative staff is paid more than the legislator at a range 10. REPRESENTATIVE OGAN gave the governor's and his chief of staff's salary. CHAIR JAMES explained there's a lot of unfairness out there. She said in her first job that she took was with the Department of Motor Vehicles and she made $166 a month, which included vacation time and holidays. By the time she paid the babysitter, she couldn't work for $166 a month so she went to work in the private sector and made $1.26 per hour or approximately $2600 a year. The private sector provided her with all the same benefits as the state and more pay. She said the reason she says this is, at that time, in 1950s, is people said that - especially women going back to work after their families are gone, they could go to work for the state, because you didn't have to have any special skills. So people would go to work for the state for the benefits and assumed that they would be making less money in their paycheck than what they earned in the private section, that's the choice they made. Over the years that has turned around, where working for the state, or any kind of government, provides more pay plus great benefits. Now, state jobs are much more sought after than private sector jobs. Number 0392 DON ETHERIDGE District, Local 71, appeared before the committee. He stated, "None of our folks are effected by this bill directly, but indirectly they all will be. And, I too, when I started with state government was making a whole lot less than the private sector, but we've worked to get it up, comparable. During pipeline days, the state jobs weren't that well paid and the industry went skyrocketing and ours held pretty much level. Now it's going the other way, they took a big cut, our private sector folks, but our state folks have been able to hold the line. One of our major concerns if we start cutting state salaries then everybody else is going to start losing also. And that's a major concern out there because we don't need another 86 (1986) here, because there's too many houses that were walked away from - and giving the keys back to the banks and so forth." MR. ETHERIDGE further stated, "First of all, I believe that all of you deserve higher pay, I would do what you guys go through for the pay you get and I don't know why you do. ... In response also to the comment made that every time the Administration changes, directors change, I know that's not true, I worked under a director of the 'Highways Department' [Department of Highways] that was there for over 20 years. He stayed on and on, through not only different administrations but a different party - taking over the Administration and he just kept right on going. And, if you get some of these directors that get entrenched in there and they can't afford to get rid of them because they know too much to do that. I think that we need to protect these folks that are making the decisions. When we're talking to people that are out spending our state dollars, I want somebody that's qualified out there to spend our state dollars. ... I want somebody that's got the responsibility and will stay there and has an incentive to stay there and do the job." MR. ETHERIDGE continued, "When I worked for 'Marine Highways', I made more money than the director. I made more money than the governor did at certain times, but I also worked an excess of 1,000 hours a year of overtime in those years in order to do it because we were so shorthanded we couldn't afford to hire help to give me the break - which I would loved to have had. When you look out there, there's many instances where the people are going to make more money because of the hours they have to put in." MR. ETHERIDGE further stated, "The comment of one of the gentlemen testifying earlier, that you don't find directors and commissioners in the offices on weekends, I've got news for him. I find lots of them in here. I spend a lot of time in my office over the weekends, especially when you guys are in session, and I have no problem getting a hold of those people. I know that when you dial the phone numbers for their switchboards, there is nobody at the switchboards to answer them, but if you have the direct number to their offices, you can get those folks, because they are there. I spend a lot of time on the phone with them over the weekends. I even call them at home at night, or whatever I have to do, if I've got an issue that I need to work on - they are available. I've never had one yet tell me, no matter what time of day or night I call him, that he isn't going to talk to me." Number 0456 MR. ETHERIDGE said, "I believe that you're going backwards in the idea of equality here. Instead of trying downgrade the folks that are doing these jobs, I believe the staff for the legislators - they're underpaid, they're overworked, they put in so many more hours than should be called for, but they deserve more and I'll be the first one to stand here and argue it. If we could organize them and bring them up - I'd love for the chance to do that. But you guys don't let us do that for some reason. I also see a lot of staffers here that are using this as a stepping-stone. ... And, I would hate to see anything taken away from them - just to bring them down to somebody else's level. I don't believe that's the fair way to do this." Number 0476 REPRESENTATIVE OGAN asked Mr. Etheridge, "Is it your position that there shouldn't be any salary reductions at all -- of the pain of this budget shortfall should be more on the backs of the taxpayers?" MR. ETHERIDGE replied, "Yes, I believe that everybody in the state should have to foot the bill of running the government. I see that right now were talking of cutting public employees, commissioners, and all these folks, wages on the facts that - well, we got less oil dollars. People are getting laid off in the industry. The pay cuts in the industry, and so forth. The state does not go up when the product price goes up. State salaries don't do that. We have to negotiate the prices to get them up and we have to work at them to get them up. The oil industry, when the prices go up, their executive get raises. ... But, our public employees - they've got the same job every day and they're doing more with less out there every day." [HJR 7 and HB 74 were heard and held]. Number 0499 ADJOURNMENT CHAIR JAMES adjourned the House State Affairs Standing Committee at 10:12 a.m.