Legislature(2015 - 2016)CAPITOL 106
03/03/2016 08:00 AM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB322 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 322 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 3, 2016
8:06 a.m.
MEMBERS PRESENT
Representative Bob Lynn, Chair
Representative Wes Keller, Vice Chair
Representative David Talerico
Representative Liz Vazquez
Representative Sam Kito
Representative Jonathan Kreiss-Tomkins
MEMBERS ABSENT
Representative Louise Stutes
OTHER LEGISLATORS PRESENT
Representative Cathy Tilton
COMMITTEE CALENDAR
HOUSE BILL NO. 322 "An Act limiting employee compensation for
certain officers and employees in the exempt service; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 322
SHORT TITLE: EXEMPT STATE EMPLOYEE SALARY LIMIT
SPONSOR(s): REPRESENTATIVE(s) COLVER
02/19/16 (H) READ THE FIRST TIME - REFERRALS
02/19/16 (H) STA, FIN
03/03/16 (H) STA AT 8:00 AM CAPITOL 106
WITNESS REGISTER
REPRESENTATIVE JIM COLVER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 322 using a
PowerPoint presentation.
NANCY MEADE, General Counsel
Administrative Staff
Office of the Administrative Director
Alaska Court System
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 322.
JO HECKMAN, Board of Regents
University of Alaska
Fairbanks, Alaska
POSITION STATEMENT: Testified on HB 322.
LESLIE RIDLE, Deputy Commissioner
Department of Administration (DOA)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on HB 322.
KATE SHEEHAN, Director
Division of Personnel & Labor Relations
Department of Administration (DOA)
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 322.
ACTION NARRATIVE
8:06:14 AM
CHAIR BOB LYNN called the House State Affairs Standing Committee
meeting to order at 8:06 a.m. Representatives Keller, Vazquez,
Kito, Kreiss-Tomkins, Talerico, and Lynn were present at the
call to order.
HB 322-EXEMPT STATE EMPLOYEE SALARY LIMIT
8:09:08 AM
CHAIR LYNN announced that the only order of business would be
HOUSE BILL NO. 322, "An Act limiting employee compensation for
certain officers and employees in the exempt service; and
providing for an effective date."
8:09:51 AM
REPRESENTATIVE JIM COLVER, Alaska State Legislature, as prime
sponsor, said the intent of HB 322 is to reset to a manageable
level some of the higher state government salaries in order to
help with the budget deficit and to derive value for the people
of Alaska. He stated that there are a number of state employees
earning a salary greater than the governor's, which is $145,000
per year. He revealed that the intent of the proposed
legislation is to reset those salaries to a lower or the same
level as the governor's; however, he allowed that some positions
would be excluded from the salary limitation. He referred to
the employee spreadsheet in the committee packet, titled
"Executive Branch Exempt Employees with Earnings of $145,000 or
More in CY 2015," and added that bargaining unit positions were
not included in this list.
8:12:57 AM
CHAIR LYNN asked if there are employees in bargaining units with
salaries greater than the governor's.
REPRESENTATIVE COLVER answered that there are but there are
special circumstances to warrant the higher salary, such as
location or overtime. Representative Colver continued by saying
that the listing of positions and salaries in the employee
spreadsheet consists of only exempt employees, but he plans to
include partially exempt employees in the proposed legislation
as well. The total of the salaries listed in the spreadsheet
comes to $11.9 million. After limiting these salaries and
adjusting for the ones excluded, the savings to the state would
be about $2 million.
REPRESENTATIVE COLVER further stated that he was unable to
obtain salary data from the University of Alaska and was
informed that the Alaska Railroad employees are excluded from
the proposed legislation.
8:15:18 AM
CHAIR LYNN inquired why Representative Colver was not able to
get university salary information, as the university is a public
institution.
REPRESENTATIVE COLVER replied that he is unsure why and would
keep trying.
CHAIR LYNN asked why the university president is excluded.
REPRESENTATIVE COLVER replied that he believes that position
requires a high level of education, experience, and
responsibility.
CHAIR LYNN asked if the governor's appointees didn't also
require a high level of expertise and experience.
8:18:38 AM
REPRESENTATIVE COLVER referred to slide 4 and reiterated that
the intent of the proposed legislation is to reset the salaries,
and if, for reasons determined by the governor, a higher salary
is needed to fill a position with the expertise required, the
governor could unilaterally raise that salary and report the
action to the legislature.
CHAIR LYNN asked Representative Colver to explain why the
governor would do anything other than set the salary for
appointees based on expertise and a level needed to fill the
position.
REPRESENTATIVE COLVER replied by saying that through pay
increments ("step increases"), merit increases, and cost of
living allowances (COLA), some salaries that started out much
lower have risen significantly. He referred to slide 7 to
demonstrate the percentage rise in salaries.
REPRESENTATIVE COLVER referred to the employee spreadsheet to
describe a provision called "override." He directed attention
to the second column from the end, labeled "[Employee Exempt]
Pay Rate Override," which he defined as the current mechanism by
which the executive branch can pay above and beyond the range
for which the position is approved.
8:23:23 AM
REPRESENTATIVE KELLER asked why judges and magistrates were
among the exempt positions.
REPRESENTATIVE COLVER replied that he learned through discussion
with several Alaska Supreme Court justices that even at their
current salary of $185,000, justices consider these state
positions more of a retirement job.
8:25:30 AM
NANCY MEADE, General Counsel, Administrative Staff, Office of
the Administrative Director, Alaska Court System, thanked the
sponsor for discussing the proposed legislation with her and
listening to her concerns. She maintained that her intent is
not to express any policy views on the wisdom or integrity of HB
322. She went on to state her concern, which is that the
proposed legislation implicates Article IV, Section 16, of the
state constitution, which grants to the court administrative
director the ability to set salary schedules for employees of
the judicial branch. She added that this provision is also in
statute and in the court administrative rules.
8:27:23 AM
CHAIR LYNN asked Ms. Meade how the administrative director
determines salary levels.
MS. MEADE replied that the administrative director aligns
salaries closely with the executive branch salary schedule
through a comparison of duties. She further stated that
justices and judges are not included in this employee group and
their salaries are set by the legislature. She offered that a
bill setting a salary cap may run afoul of these provisions.
She added that within the entire judicial system there are only
two positions that would be affected by the proposed legislation
according to base salary - the administrative director and the
deputy director - and there are two or three more employees
affected whose salaries have surpassed the governor's because of
longevity.
8:30:27 AM
REPRESENTATIVE KELLER asked for clarification on the legislative
influence on the salary schedule by way of its power of
appropriations to the court system.
MS. MEADE conceded that the legislature did have that power, but
stated that the number of judges are set by statute and again
mentioned the constitutional provisions regarding salaries for
the judicial branch.
8:31:52 AM
REPRESENTATIVE VAZQUEZ asked for clarification regarding the
administrative director of the court establishing the salaries
of non-judges.
MS. MEADE confirmed that the administrative director issues a
salary schedule for judicial employees.
REPRESENTATIVE VAZQUEZ asked for the statutory authority for
[the salary schedule].
MS. MEADE answered that the statute is AS 22.20.037(a) and the
rule is Alaska Court Rules, Rules of Administration, Rule 2.
REPRESENTATIVE VAZQUEZ asked if there is any criteria for
exemptions from the schedule established by the administrative
director.
MS. MEADE answered that the court salary schedule looks like the
executive branch salary schedule with ranges and steps. The two
positions mentioned previously, in regard to base salaries above
$145,000, are not on that salary schedule. The administrative
director's salary is in administrative rule and the deputy has
an override granted by the administrative director.
REPRESENTATIVE VAZQUEZ asked Ms. Meade if she had provided the
court's salary schedule to Representative Colver.
MS. MEADE responded that she had provided him the salary
schedule along with a chart showing the salaries of the
employees who would be affected by the proposed legislation.
8:33:42 AM
REPRESENTATIVE VAZQUEZ asked Ms. Meade why the two individuals
are exempted.
MS. MEADE reiterated that the administrative director's salary
is set in court rule and the deputy's salary is set by the
administrative director. She offered that these individuals
need special expertise to do their jobs: they both need to be
attorneys; they both need to be experts in court operations; and
they both need to be well-versed in the wide-ranging duties of
an administrative director. She added that it is for this
reason that the two salaries are aligned somewhat with judges'
salaries.
REPRESENTATIVE VAZQUEZ asked Ms. Meade if she is recommending
that these two positions be exempt [from the proposed
legislation] along with the judges.
MS. MEADE responded that she believes the judicial branch should
be exempt from the proposed legislation because of the
constitutional provision granting the administrative director
the authority to set the salaries.
8:35:41 AM
REPRESENTATIVE KELLER asked if the constitution specifies that
the court administrator sets salaries.
MS. MEADE clarified that it is the administrator's role to be
the head of the operations of the court system and statute
specifies that includes salaries. She added that court rule
more specifically states that salaries are established by the
administrator.
8:36:31 AM
MS. MEADE further clarified that the constitution gives the
administrative director the authority to set salaries for the
700 employees of the judicial branch, who are not judges and
justices. The legislature has the right to set judge and
justice salaries without implicating that provision.
REPRESENTATIVE VAZQUEZ read Article IV, Section 16, as follows:
The chief justice of the supreme court shall be the
administrative head of all courts. He may assign
judges from one court or division thereof to another
for temporary services. The chief justice shall, with
the approval of the supreme court, appoint an
administrative director to serve at the pleasure of
the supreme court and to supervise the administrative
operations of the judicial system.
REPRESENTATIVE VAZQUEZ asked Ms. Meade whether "to supervise the
administrative operation of the judicial system" means that it
empowers the administrative director to set salaries.
8:38:53 AM
MS. MEADE responded that the administrative director is
responsible for all operations within the court system. She
maintained that AS 22.20.037(a) further clarifies the
constitutional provision, and read the statute as follows:
"Judicial employees shall be employed subject to classification
and wage plans based on the merit principle and adapted to the
special needs of the judiciary, as determined by the
administrative director of the [court system]." She went on to
offer her interpretation that creating wage plans is a direct
responsibility of the administrative director. She continued by
paraphrasing the Alaska Court Rules, Rules of Administration,
Rule 2(b), which read as follows [original punctuation
provided]:
The administrative director shall receive an annual
compensation in an amount equal to $2,000.00 less than
the annual compensation provided by law for a justice
of the Alaska Supreme Court. Employees in the
partially exempt and classified service are entitled
to receive compensation in accordance with the salary
and classification plan adopted by the administrative
director under the personnel rules. The
administrative director with the approval of the chief
justice shall appoint and fix the compensation of such
assistants as are necessary to the exercise and
performance of the powers and duties vested in the
administrative director.
8:40:14 AM
REPRESENTATIVE VAZQUEZ agreed that AS 22.20.037(a) does appear
to provide the administrative director the power to classify and
set forth wage plans.
MS. MEADE reiterated that the salary schedule that the
administrative director sets forth is very closely aligned to
that of the executive branch. She stated she did not believe
these salaries levels to be irresponsible and added that there
are just two positions outside that salary schedule and above
the governor's salary in base pay.
8:41:54 AM
CHAIR LYNN asked for clarification that the proposed legislation
would exempt the judges.
REPRESENTATIVE COLVER replied that according to Ms. Meade's
testimony and legal interpretation, the administrative director
and deputy director should be included among the exemptions. He
affirmed that he would review that and work with the committee
to draft amendments as needed.
REPRESENTATIVE KELLER requested a copy of the legal opinions
that Representative Colver mentioned.
REPRESENTATIVE VAZQUEZ requested a copy of the salary schedules
provided by the court system to Representative Colver's office.
8:43:52 AM
JO HECKMAN, Board of Regents, University of Alaska, apologized
that salary data from the university was not provided to the
sponsor of HB 322. She offered that salary data is readily
available and she would make sure her staff provides the data to
the bill sponsor. She continued by explaining that the
university recruits nationwide to find the best faculty, senior
administrators, and officers. She expressed her concern that HB
322 would make the university non-competitive in recruiting
future mid-management administrators, who are needed to effect
change. She cited the negative effects to the university during
the '80s when the state economy suffered. She recited the
directives from the university president - to maintain
excellence, increase enrollment, procure additional funding for
research, and encourage increased donations. She opined that
some of these directives would become difficult to achieve if
the university loses quality employees, and she emphasized that
the university would become non-competitive in the market
environment. She offered that the compensation structure is
market-based and is derived utilizing a benchmark standard - the
annual competitive compensation survey from the National
Association of Human Resource Professionals. She indicated that
this benchmark tool lists salary positions for 55,000 positions
in over 1,200 public and private universities nationwide.
Currently the University of Alaska is offering salaries that are
90 percent of the national median for comparable positions when
hiring new employees; therefore, at present, the university is
not competitive nationwide.
8:48:41 AM
MS. HECKMAN said that a total of 88 university employees have
salaries over $145,000 for FY 16, and she offered to provide
supporting documentation. She categorized the 88 employees as:
14 faculty members; 41 officers and senior administrators; and
33 deans and department heads. She expressed the concerns of
the university in regard to HB 322, which are: faculty would
choose to leave the university rather than make less than market
wages; faculty would be difficult to replace with quality
faculty if non-competitive salaries are offered; and the
university would not be able to fulfill its mission according to
the directives previously stated. Ms. Heckman cited the example
of the open chancellor position at the University of Alaska
Fairbanks (UAF). She posited that the university would not be
able to find a candidate with the experience and credentials
required who would accept a salary of $145,000. She offered
that UAF is considered a research university and nationally
recognized in many classifications. She recited the national
median annual salaries for research university administrators:
$337,000 for a provost; $248,000 for a dean of sciences; and
$287,000 for a dean of engineering. She further opined that if
the university loses quality faculty and researchers, then it
would be difficult to attract research funding and students
would not choose to enroll.
8:52:08 AM
CHAIR LYNN asked the sponsor of HB 322 to specify the exemptions
of university positions in the proposed legislation.
REPRESENTATIVE COLVER replied that only the university president
position would be exempt under the proposed legislation. In
reference to the university administrative positions,
Representative Colver offered that he is trying to work with the
university to consolidate administrative functions.
8:53:21 AM
MS. HECKMAN claimed that the 14 faculty members at the
university who teach business, accounting, engineering, and some
sciences, could earn salaries in excess of $145,000 per year in
the private sector, but choose to teach in Alaska's university
system. She added that it would be very difficult to recruit
qualified faculty because of the high private sector salaries in
these fields.
8:54:16 AM
REPRESENTATIVE KITO asked Ms. Heckman if the capping of the
salary of the 88 positions prompted any concern at the
university for potential loss of accreditation of any program.
MS. HECKMAN revealed that she does not know; however, she
offered her belief that it is plausible that loss of faculty and
the credentials they bring with them may put the university at
risk.
8:55:01 AM
CHAIR LYNN acknowledged Representative Cathy Tilton joined the
committee meeting.
REPRESENTATIVE TALERICO referenced Ms. Heckman's mention of
higher private sector salaries and requested Representative
Colver obtain salary averages for engineers and researchers in
the State of Alaska from the Department of Labor & Workforce
Development (DLWD).
8:56:34 AM
REPRESENTATIVE KITO cited board certified staff psychiatrists
listed on the employee spreadsheet but not among the positions
exempt from HB 322. He stated his understanding that the Alaska
Psychiatric Institute (API) has extreme difficulty recruiting
and retaining psychiatrists and, as a result, has used itinerant
psychiatrists. He expressed his belief that this situation is a
result of non-competitive salaries and a shortage of
psychiatrists nationwide. He suggested that psychiatry is a
field for which the Department of Health and Social Services
(DHSS) needs to offer salaries necessary to fill positions.
REPRESENTATIVE COLVER responded that the Legislative Finance
Division analysis identified a number of budgeted salaries at
the $400,000 range at API. He suggested that relying on
itinerant psychiatrists may be driving up the cost. He promised
that he would review this with DHSS to determine the challenges
of filling those positions.
8:59:21 AM
LESLIE RIDLE, Deputy Commissioner, Department of Administration
(DOA), agreed and reminded committee members that since most of
the individuals on the employee spread sheet were on salary
overrides, it is possible that the next employee in that
position may have a different salary based on experience or
department need.
9:01:13 AM
REPRESENTATIVE VAZQUEZ asked who set the salaries for the Alaska
Oil and Gas Conservation Commission (AOGCC).
9:01:34 AM
KATE SHEEHAN, Director, Division of Personnel & Labor Relations,
Department of Administration (DOA), responded that exempt
salaries are set within the agencies and with the Office of the
Governor. She added that some agencies, through policy, follow
the State Personnel Act [AS 2015, Section 39.25] and others have
their own policies.
REPRESENTATIVE VAZQUEZ asked Representative Colver if there is
any consideration for exemption of employees [under HB 322] in
AOGCC.
REPRESENTATIVE COLVER replied that he did identify that market
rates for geologists and those overseeing permitting in the oil
and gas industry are above the $145,000 threshold, and he stated
that he would review the level of expertise needed by employees
of AOGCC to appropriately manage the resource.
9:03:24 AM
REPRESENTATIVE VAZQUEZ noted from the employee spreadsheet that
many of the AOGCC employees are geologists and engineers, and
she offered that competitive salaries would be needed to recruit
such personnel.
REPRESENTATIVE COLVER stated that he expects to have answers to
committee members' questions by the beginning of the following
week.
REPRESENTATIVE VAZQUEZ noted the exemption for the State Medical
Examiner in the proposed legislation and echoed Representative
Kito's concern regarding the recruitment of psychiatrists. She
suggested the possibility of a broad exemption for any state
physician position, due to the difficulty of recruiting a
physician at an annual salary of $145,000.
9:06:26 AM
CHAIR LYNN, after ascertaining no one wished to testify, closed
public testimony on HB 322.
REPRESENTATIVE VAZQUEZ reiterated her opinion that all physician
positions should be exempt from HB 322.
REPRESENTATIVE KELLER thanked the sponsor for calling attention
to state salaries and conceded that decisions regarding
exemptions under HB 322 would be difficult.
9:07:52 AM
REPRESENTATIVE VAZQUEZ referred to page 3 of the employee
spreadsheet to discuss the salary of a portfolio manager within
the Department of Revenue (DOR). She insisted that due to the
expertise required for a portfolio manager and the salary that
such a position demands, an exemption under HB 322 would be
appropriate. She further suggested that if portfolio managers
in DOR have job descriptions similar to portfolio managers in
the Alaska Permanent Fund Corporation (APFC), perhaps there
should be consideration for transfer of these positions to the
APFC.
REPRESENTATIVE COLVER offered to collaborate with Representative
Vazquez in regard to the exemption of portfolio managers. He
expressed his understanding that the legislature has raised the
salaries of positions as needed and added that his research has
included tracking salary increases determined by the state.
9:11:33 AM
REPRESENTATIVE KITO shared two considerations with the committee
members regarding state salaries: one, most Alaskans would find
$100,000 a comfortable living considering the median income in
Alaska is about $50,000; and two, Alaska needs to recruit and
retain state employees in a competitive environment nationwide.
He thanked the sponsor for the information and opined that for
some professions, limiting salaries may be beyond the control of
state government.
CHAIR LYNN asserted his opinion that HB 322 borders on income
equality in the sense that salaries would be made equal
regardless of expertise, and he further stated that Alaska
requires many specialized positions needing expertise and unique
qualifications. He thanked the sponsor for the information.
9:15:50 AM
REPRESENTATIVE VAZQUEZ asked the sponsor to address partially
exempt employees exceeding the $145,000 salary level in the
proposed legislation.
REPRESENTATIVE COLVER replied that he does intend to include
partially exempt employees. He also contended that the proposed
legislation is not about income equality but more about building
credibility among Alaskans about responsible state expenditures
and getting good value. He further attested that he does not
want to impugn anyone's reputation for his/her expertise, and
will continue vetting the positions that should be exempt. He
further held that the large number of state employees receiving
a salary above the highest ranking official in Alaska is
philosophically problematic.
[HB 322 was held over.]
9:18:11 AM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 9:18
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 HB 322 Ver.E Exempt Employee Salary_Limit BASIS (19Feb2016).PDF |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |
| 02 HB 322 Ver.E Sponsor Statement.pdf |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |
| 03 HB 322 v.E Sectional Analysis RVN (2Mar2016_rsk).pdf |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |
| 04 HB 322 Exec_Branch_XE_EE_with Earnings of 145000 or more_in_CY2015-Ridle-160227(3Mar2016sta).pdf |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |
| 05 HB 322 PowerPoint.pdf |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |
| 06 HB 322 Fiscal Note DOA 3-1-2016.pdf |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |
| 07 HB 322 Fiscal Note UofA 3-2-2016.pdf |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |
| 08 HB 322 Fiscal Note DOC-AGDC 3-1-2016.pdf |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |
| 09 HB 322 Court 00 3.25.pdf |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |
| 10 HB 322 Court Salaries Calendar Year Actuals Salaries $145K 3 3 16.pdf |
HSTA 3/3/2016 8:00:00 AM |
HB 322 |