Legislature(2005 - 2006)SENATE FINANCE 532
04/25/2005 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB150 | |
| SB151 | |
| SB71 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 133 | TELECONFERENCED | |
| + | SB 150 | TELECONFERENCED | |
| += | SB 151 | TELECONFERENCED | |
| += | SB 71 | TELECONFERENCED | |
MINUTES
SENATE FINANCE COMMITTEE
April 25, 2005
9:10 a.m.
CALL TO ORDER
Co-Chair Green convened the meeting at approximately 9:10:51 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Lyman Hoffman
Senator Donny Olson
Also Attending: NONA WILSON, Legislative Liaison, Department of
Transportation and Public Facilities; KIP KNUDSON, Deputy
Commissioner of Aviation, Department of Transportation and Public
Facilities; JASON HOOLEY, Staff to Senator Fred Dyson; JOEL
GILBERTSON, Commissioner, Department of Health and Social Services;
CHUCK HARLAMERT, Juneau Section Chief, Tax Division, Department of
Revenue; MIKE TIBBLES, Deputy Commissioner, Department of
Administration; CHRIS CHRISTENSEN, Deputy Administrative Director,
Alaska Court System; PAM VARNI, Executive Director, Legislative
Affairs Agency
Attending via Teleconference: From Anchorage: MARGO MCCABE, Chair,
Board of Trustees, Alaska Children's Trust
SUMMARY INFORMATION
SB 133-AVIATION ADVISORY BOARD
The Committee heard from the Department of Transportation and
Public Facilities. One amendment was offered but withdrawn from
consideration. The bill reported from Committee.
SB 150-ALASKA CHILDREN'S TRUST FUND GRANTS
The Committee heard from the bill's sponsor, the Alaska Children's
Trust, and the Department of Health and Social Services. The bill
reported from Committee.
SB 151-DECOUPLING FROM FED TAX DEDUCTION
The Committee heard from the Department of Revenue and the bill
reported from Committee.
SB 71-NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT
The Committee heard from the Department of Administration, the
Court System, and the Legislative Affairs Agency. The bill was held
in Committee.
SENATE BILL NO. 133
"An Act establishing the Aviation Advisory Board; and
providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
NONA WILSON, Legislative Liaison, Department of Transportation and
Public Facilities, informed the Committee that the Department has
identified this legislation as being "critical to the State's
aviation infrastructure as well as the aviation industry as a
whole". It would allow for the continuance of the Aviation Advisory
Board, which was created in 2003 and renewed in 2004, to occur
"without the need for annual administrative renewals". A permanent
Board would be "practical and necessary to the continued success
and prudent operation" of the State's international airport hubs in
Anchorage and in Fairbanks and its 258 Rural airports.
Ms. Wilson stated that the Board also serves in an advisory
capacity to the Commissioner of the Department of Transportation
and Public Facilities (DOT) and facilitates on-going "coordination
between the State and aviation industry" on such things as aviation
policy, safety, airport management and operations.
Ms. Wilson noted that the composition of the Board, as detailed in
Section 1, Sec. 44.42.230(a) on page two, lines six through 30, is
"a broad cross-section" of the State's aviation industry and as
such would provide well-balanced dialogue and expertise.
Senator Olson asked whether the responsibilities of the new Board
would differ from its predecessor.
KIP KNUDSON, Deputy Commissioner of Aviation, Department of
Transportation and Public Facilities, informed the Committee that
the Board was originally formed to improve communication between
aviation interest groups and DOT personnel responsible for the
airport system. The Board has done a good job in providing that
conduit.
Senator Olson pointed out that a large portion of the Board member
positions "are not necessarily aviation related", as exampled by
Section 1, Sec. 44.42.230. Composition of the Board (a)(5), (6),
and (7).
(5) a member who is a community leader residing in the
unorganized borough of the state;
(6) a member who represents the mayor of the Municipality of
Anchorage;
(7) a member who jointly represents the mayors of the City of
Fairbanks and the Fairbanks North Star Borough;
Mr. Knudson explained that when Governor Frank Murkowski
established the original Board by Administrative Order, it was
thought best not to "predetermine" that Board members should have
an aviation connection. However, "effectively they are all aviation
people" in that in some form, they each have "some leg in the
aviation industry or some aviation interest group". The people who
have been appointed by the mayors of the City of Anchorage and the
City of Fairbanks have had aviation backgrounds. Therefore, "it
happens that they're all aviation interested".
Co-Chair Green concluded therefore that it must be "assumed" that
the appointees would have aviation industry backgrounds.
Co-Chair Green asked whether the Board composition in this bill is
similar to the makeup of the Board established by the
Administrative Order.
Mr. Knudson replied that this Board is identical to the original
Board with the exception being that an at-large member was added
"for tie breaks". Therefore this Board would have 11 members rather
than ten.
Co-Chair Green asked whether the Board has met consistently during
the two years it has existed.
Mr. Knudson communicated that the Board has had a busy schedule and
has met nine times in the last two years.
Co-Chair Green understood that the responsibilities of the Board
would continue as before. Absent this legislation it could continue
via the issuance of an Administrative Order. This legislation would
serve to include the Board in State Statute and thereby make it
subject to review by the Division of Legislative Budget & Audit.
This would align the Board with other boards in the State.
Senator Hoffman asked for examples of the types of "major issues"
the Board has addressed and resolved.
Mr. Knudson commented for general background that DOT oversees the
operations of the Anchorage and Fairbanks airports. Other airports
such as the ones ins Juneau and Ketchikan are locally governed. The
Board has addressed the issue of airport governance by gathering
information from around the country in order to determine the best,
most cost effective method to manage airports. Other issues that
have been addressed include the operation of airport towers such as
the tower at King Salmon and a feasibility issue relating to how
small of a community could support a ten million dollar airport.
The Board has provided good advice to the Commissioner in regards
to such things as the allocation of resources.
Co-Chair Wilken voiced concern about the size of the Board;
specifically that the budget and the Board's size and scope of
responsibility do not appear to be "in alignment". Language in
Section 1, Sec. 44.42.220. Meetings; hearings; records. does not
appear to allow the Board to meet and make decisions by
teleconference; therefore, he questioned how the 11-member Board
could meet two or three times a year within the constraints of a
$20,000 budget. To that point, he asked whether the Board could
meet and make decisions via teleconference.
Mr. Knudson communicated that, while the Board has held meetings by
teleconference, they would prefer to meet as a group prior to
issuing a resolution. Meetings have been held in Ketchikan,
Anchorage, Fairbanks, and Juneau.
Co-Chair Wilken asked whether the $20,000 annual Board budget would
be sufficient.
Mr. Knudson stated that while the budget might cause some
"scrimping", it would be workable.
Co-Chair Wilken questioned the language in Section 1, Sec.
44.42.230.(c), page three, lines two and three, that specifies that
the Governor would name the Board chairman. He considered proposing
an amendment to delete that language, as an 11-member Board, making
such important decisions, would be qualified to choose their own
chairman. It would also "keep peace in the family". The Chair being
appointed by the Governor is an anomaly, as it is atypical of how
other boards select their chairs.
Mr. Knudson understood that this must "be a construct of some
Boards". The chair being appointed by the Governor was, "oddly
enough", recommended by the Board for inclusion in the
Administrative Order. One Board member, Richard Williams, thought
that "it would de-politicize the chair to a certain extent" in that
the chair selection "would not be a popularity contest".
Conceptual Amendment #1: This amendment deletes the language "The
governor shall designate a member of the board to serve as chair of
the board, or, at the governor's request," in Section 1, subsection
(c), on page 3, lines two and three. The revised language would
read as follows.
(c) The board shall elect a chair from among its members who
are not state officers or employees.
Co-Chair Wilken moved to adopt Amendment #1.
Co-Chair Green objected and stated that one of the upsides in
having a chair appointed by a Governor is that there is no delay in
the deliberations of the Board. In her experience with Boards, she
has concluded that, oftentimes, this process would have been
preferred as it would result in a more efficient use of time and
the board would be ready to conduct business.
Senator Olson asked the reason Co-Chair Wilken chose not to
eliminate the language excluding State officers or employees from
being able to chair the Board. He contended that numerous "State
officers and employees are quite knowledgeable about the aviation
industry" and would make excellent Board chairs.
Co-Chair Wilken opined that State officers and employees should not
be considered for the chair position as he viewed this board as "a
citizens' commission".
Co-Chair Wilken moved to withdraw Conceptual Amendment #1.
There being no objection, the Amendment was WITHDRAWN.
Senator Olson opined that, as the operator of two air taxi
companies, this Advisory Board is an "asset to the aviation
industry". He strongly supported the bill.
The Bill was HELD in Committee.
[NOTE: This bill was re-addressed later in the meeting.]
SENATE BILL NO. 150
"An Act repealing the limits on grants awarded from the Alaska
children's trust fund."
This was the first hearing for this bill in the Senate Finance
Committee.
JASON HOOLEY, Staff to Senator Fred Dyson, Chair of the Senate
Health, Education and Social Services (HESS) Committee, stated that
the HESS Committee sponsors this bill by request of the Alaska
Children's Trust Board of Trustees. The Trust was established in
the late 1980s as a means through which to fund programs designed
to "combat child abuse". The Board of Trustees is "seeking
additional flexibility" in the administration of the program in
regards to the awarding of Trust grants. To that point, Section 1
of this bill would require grant applicants to include a self-
sustainability plan in their proposal. Section 2 of the bill would
eliminate the current annual $50,000 grant limitation; would re-
define the current grant funding formula; and would specify that
the grant award be limited to four-years in an effort to guarantee
that the grant would be recognized as seed money for the program.
Section 3 would reinforce the conditions specified in Sections 1
and 2 by allowing the Board to reduce or eliminate an awarded grant
based on the performance of the grantee.
Co-Chair Green, noting that this grant process was revised within
the last four or five years, asked the reason for the need to re-
address the process.
Mr. Hooley deferred to Margo McCabe of the Alaska Children's Trust.
MARGO MCCABE, Chair, Board of Trustees, Alaska Children's Trust,
testified via teleconference from Anchorage and commented that,
while the assets of the Trust Fund currently exceed ten million
dollars, the Trust could only expend its annual net income of the
Trust Fund to fund the entirety of child abuse programs statewide.
In the last few years, the amount of available funds was a limiting
factor as the income was only sufficient enough to fund recurring
grants. Therefore, "the intent of this legislation is to limit"
funding for those grants so that money would be available to fund
"new innovative" programs.
Co-Chair Green asked which current formula language must be changed
in order to accomplish this goal; specifically why the proposed
formula is to establish a sliding scale award of 75-percent of the
program's first year's expenses the initial year, 50-percent of the
program's first-year expenses the second year, and 25-percent of
the program's first-year expenses the third and fourth years.
Ms. McCabe stated that the proposed formula changes would establish
parameters that would allow the grantees to become self-sufficient
at the termination of the four-year period. This would also allow
Trust funds to become available to fund other programs.
Co-Chair Green asked how many $50,000 grants have been awarded.
Ms. McCabe responded that, due to budget constraints, the most
recent Request for Proposals (RFP) grant awards were limited to
$30,000. Approximately half of the applicants applying requested
the maximum $30,000 amount, and four such grants were awarded. The
Trust would be issuing its next RFP shortly.
Co-Chair Green noted that current State Statutes limit the award to
$50,000. She was curious to the number of grants that have been
awarded at that level.
Ms. McCabe did not have that data available as the $50,000 grant
level was last awarded prior to her being on the Board. Recent
annual award levels have been limited to $30,000.
Co-Chair Green asked the Commissioner of the Department of Health
and Social Services to explain, for the record, the specific
formula change included in the Senate HES version of the bill.
JOEL GILBERTSON, Commissioner, Department of Health and Social
Services, pointed out that the most substantial formula change in
that version of the bill is the four-year grant award limitation
specified in Section 2. Current State Statute does not specify any
limitation on the length of a grant award. While current language
does include a sliding scale award level, once the lowest award
percentage is reached, it could be awarded indefinitely. One
program recipient is receiving its eighth year of funding. "No
grants are transitioning off", therefore no new grants are being
awarded, as there is a finite amount of money available. No new
programs have received grants in the last two years. The net income
for the program is projected to continue at the current level and,
unless programs are cycled out, funds to support new programs would
be unavailable. Therefore, the four-year provision would provide
the Trust the ability to transition from "continuation funding" to
being able to fund new programs.
9:30:19 AM
Co-Chair Green stated that she had participated in the development
of the previously adopted language. While the sliding scale
language in the bill was intended to halt continual funding, the
changes being proposed in this legislation would "correct and
clarify" that a program would receive a sliding scale percentage of
funding that would terminate at the end of the fourth year. This
would provide the opportunity for new programs to be funded. The
intent of the Trust funds is to provide "a boost but not a lifeline
support system".
Commissioner Gilbertson affirmed that that the intent of the
original Trust language was "to have the grants move toward
sustainability plans and to transition off after a four year
cycle". However, the four-year cycle language was omitted from
State Statute.
9:31:09 AM
Co-Chair Green asked whether this legislation would affect the
maximum award amount.
Commissioner Gilbertson stated that this legislation would
eliminate the maximum limitation amount on the grants awarded by
the Trust. The annual net income available would serve as "a
natural cap".
Co-Chair Green concurred, but stated that the Trust should not
award the entirety of its funds to a single program.
Commissioner Gilbertson stated that other factors would prevent one
entity from receiving the entire amount of available funds. One
deterrent to that would be the fact that existing grants must be
honored until they transition out of their four-year cycle.
Co-Chair Green asked whether the number of program applicants might
diminish once the current recipients conclude their four-year
cycle.
Commissioner Gilbertson responded that one of the circumstances
constantly encountered in grant programs is "that areas most in the
need of the programs and programs that are most in need of coming
into their communities are often those that are the least prepared
to submit a good grant application". Typically the areas that
submit good applications "are areas that are resourced enough". The
challenge, therefore, is how to make those communities that do not
have grant writers or the resources with which to compete with
larger organizations more competitive. The proposed structure would
require the formation of a sustainability plan, performance
measures, and would include the Trust's involvement in the process.
This, combined with the phased four-year maximum grant award
limitation, would allow a natural transition process that would
provide the opportunity for programs that are on "the peripheral
now" to get into the system and receive some start-up funding. The
existing programs are good; however, as was the original intent of
the Trust grant program, they need to become self-sustaining and
allow other programs to benefit from the grant program.
Co-Chair Green asked whether the language authorizing the Board to
reduce or discontinue an awarded grant, as included in Section 3,
is a revision of current language.
Commissioner Gilbertson clarified that Section 3 is new language.
9:33:54 AM
Commissioner Gilbertson stated that Section 3 would allow the Trust
to discontinue or reduce funds were a program to not meet
performance standards. When he initially participated in the Trust,
the quality of the data being collected on the grants disappointed
him. The Board is addressing performance standards in a serious
manner as reflected in the forthcoming RFP specifications. "Outcome
data" would become more of the focus in the future.
Co-Chair Green supported this direction, as it would provide the
Board the oversight authority required to ensure that the programs
being conducted support the mission of the Alaska Children's Trust.
Commissioner Gilbertson affirmed that the Board and the Trust are
"in agreement" that "a better tool and a better reason for why we
approve a grant or why we discontinue it" is required. The outcome
data, similar to the State's Missions and Measures policy, would
allow the program's performance to be measured to insure that Trust
funds are used in the most efficient and effective manner. The
bill's language would also allow for program expansion for, as
recipients cycle out, funding would become available to fund new
grants.
Ms. McCabe voiced appreciation for the discussion. It covered the
important aspects of what the bill would do.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal note.
There being no objection, CS SB 150(HES) was REPORTED from
Committee with previous zero Fiscal Note #1, dated April 5, 2005
from the Department of Health and Social Services.
AT EASE 9:36:24 AM / 9:37 AM
SENATE BILL NO. 133
"An Act establishing the Aviation Advisory Board; and
providing for an effective date."
Co-Chair Green noted that the bill was again before the Committee.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, SB 133 was REPORTED from Committee with a
new $20,000 Department of Transportation and Public Facilities
fiscal note, dated April 25, 2005, and previous Department of
Transportation and Public Facilities zero Fiscal Note #1, dated
February 28, 2005.
SENATE BILL NO. 151
"An Act excepting from the Alaska Net Income Tax Act the
federal deduction regarding income attributable to certain
domestic production activities; and providing for an effective
date."
This was the third hearing for this bill in the Senate Finance
Committee.
Co-Chair Green asked whether the Department of Revenue wished to
present further testimony.
CHUCK HARLAMERT, Juneau Section Chief, Tax Division, Department of
Revenue, stated that he was available to answer Committee
questions.
9:38:12 AM/ 9:38:40 AM
Co-Chair Green stated that a revised Department of Revenue fiscal
note, dated April 19, 2005, has been provided.
Mr. Harlamert noted that the only revision included in the new
fiscal note is that the revenue column reflects an $8,230,000
revenue increase in FY 2006. An upward trend would continue with
$14,995,000 being the projected revenue increase in FY 2011.
Co-Chair Green characterized this legislation are being "a good
thing for the State budget".
Mr. Harlamert affirmed that this legislation would reinstate the
money.
Co-Chair Green voiced that the legislation would "restore" the
money.
Mr. Harlament affirmed.
Co-Chair Green noted that other details of this legislation had
been discussed during its previous hearings.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal note.
There being no objection, SB 151 was REPORTED from Committee with a
new indeterminate Department of Revenue Fiscal Note, dated April
19, 2005.
9:40:49 AM
SENATE BILL NO. 71
"An Act relating to the compensation of certain public
officials, officers, and employees not covered by collective
bargaining agreements; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
MIKE TIBBLES, Deputy Commissioner, Department of Administration,
testified in support of the legislation. This bill would align the
statutory pay schedule for partially exempt and exempt employees in
the executive, legislative, and judicial branches with recent
negotiated union contract salary schedules. It is anticipated that
"complicated issues" would arise were the bill denied.
Mr. Tibbles stated that the area of interest is the process
involved in making State employees wage adjustments: the wage
adjustment process for Union employees is addressed via collective
bargaining negotiations and, once an agreement is reached at that
level, the proposed monetary terms are submitted to the Legislature
for approval; partially exempt or exempt employee salary
adjustments are addressed by the submittal of legislation that
would update State wage Statutes. SB 71 is the vehicle for that
wage adjustment this year.
Mr. Tibbles noted that due to the fact that partially exempt and
exempt wage bill proposals have not always "moved forward", there
is currently an approximate five-percent disparity between their
wage schedules and those represented by collective bargaining. This
disparity would increase further in FY 2006 and 2007 as contracted
wage implementations occur.
Mr. Tibbles stressed that were the salary scales of partially
exempt or exempt employees not brought into alignment with those of
union employees, three issues could arise. The first is an equity
issue in that all State employee positions are assigned a salary
range based on the nature and complexity of work and the amount of
supervisory oversight. Since State Statutes require "like pay for
like work", the Department's opinion is that were SB 71 to not move
forward, a disparity between the two salary schedules would occur
which would violate "the like pay for like work" statutory mandate
at the point "when we get to a nine-percent difference between the
two salary schedules".
Mr. Tibbles also shared that difficulties have arisen in situations
where an effort was made to "move a position laterally" in the same
range. For example, were an exempt fiscal analyst position to open
in the Office of Management and Budget, a collective bargaining
fiscal analyst employee would be disinterested in the position
because "there was such a difference in pay". This situation has
become problematic.
9:45:52 AM
Mr. Tibbles stated that a second issue is that recruitment efforts
become more difficult as the disparity between the two schedules
increases; particularly in the case of recruiting professionals,
especially as "managers and directors are asked to do more". Were
this "bill to not pass, the message being sent is that we are not
respecting the management that they do perform ... in many cases,
individuals" they supervise would be making more money than them at
the point in time that a nine-percent difference in the two salary
schedules occurs.
Mr. Tibbles communicated that the third issue is that when a large
disparity between the two salary schedules is reached, it
discourages people "from moving up" into management positions. The
State is "required to encourage career progression" and, in his
opinion, that requirement could not be met when it would not take
"that many years in merit step" increases for an individual to earn
more than his or her own new supervisor. This is exampled by a
situation in which an individual in a Range 23 Step D supervisory
position would be earning more than his or her Range 26, Step A
supervisor. This situation is reflected in the "Comparison of
Statutory and Supervisory Salary Schedules after bargained
increases" chart depicted on page three of the "Comparison of
Statutory, Judicial and Supervisory Salary Schedules" handout [copy
on file].
Mr. Tibbles summarized that this bill is "very important" in
addressing the inequity, recruitment, and difficulty in upward
progression issues. It would provide a better playing field. The
"union contracts have been submitted to the Legislature and are
moving forward in the budget process". He asked the Committee's
support in adjusting "the statutory schedules as well".
Senator Hoffman asked when the exempt and partially exempt salaries
were last adjusted; specifically the salaries of Alaska Court
System employees
Mr. Tibbles stated that the historical wage increases for exempt;
partially exempt; and Court System employees are depicted on page
two of the aforementioned handout. Court employees wage adjustments
are specified in the column titled "Wage Increases for XJ". Their
most recent wage adjustments included a two-percent increase in
2001 and a three-percent increase in 2002.
9:46:32 AM
Co-Chair Green understood therefore, that, under the current
system, were a Range 10, Step "E" or Step "F" employee encouraged
to advance in their career and increased to a Range 12, Step A or
Step B position, "they would actually lose money" by such a
promotion.
Mr. Tibbles responded that is possible. He also noted that were an
employee to move from a classified position to a non-classified
position, they would be moving from a collective bargain negotiated
schedule that is higher than the non-classified schedule existing
in Statute.
Co-Chair Green asked for further information regarding how the Step
placement for a person earning the highest step in one range but
who is being advanced to the next range would be determined.
Mr. Tibbles responded that there are "certain rules that govern
advanced step placement". Continuing, he noted that the operating
procedures in place in the Executive Branch of State government
specify that an individual "can't be moved into longevity and
certain criteria must be met" before one could be placed within
advanced steps. Such things as "exceptional service" are
considerations. He was unfamiliar with the Legislative employee
rules in this regard.
Co-Chair Green concluded therefore, that this legislation would
serve to make "the smoothing much easier" and more aligned with
employee counterparts in non-exempt positions. While this wage
issue might "have been overlooked or intentional in years past for
various reasons", this legislation would serve to correct the
situation. It would make it "even, equal" and provide parity
amongst between the two groups of employees.
9:49:12 AM
Co-Chair Green introduced her grandsons, Connor and Noel Leaf, who
were visiting from Kenai.
9:49:30 AM
CHRIS CHRISTENSEN, Deputy Administrative Director, Alaska Court
System, voiced appreciation for Court System employees being
included in this Administration sponsored legislation. Of the Court
System's approximate 733 permanent employees, 62 are judges
appointed by the Governor, 39 are magistrates, and the majority of
the remaining employees are clerical in nature. The Court System
consumes less than two-percent of the State's operating budget, and
even though it is one of the smallest departments in the Executive
branch, more private citizens interact with the System on a daily
basis than any other entity in State government with the plausible
exception of the University of Alaska system. The majority of the
private citizens with whom the Court System's staff work with every
day are unfamiliar with the workings of the Court System, "are
angry or scared, and might be undergoing the most traumatic
experience of their lives". In addition, more than 150,000 new
cases were filed with the Court System the previous year. While
Court employees work hard under very stressful conditions and most
of them work "at a very low salary", they are, nonetheless, proud
of their work and believe that what they do matters.
Mr. Christensen informed the Committee that because approximately
70-percent of the employees are Range 15 or below, the Court
experiences large turnover rates. This, in turn, results in
management issues. Currently there is a 50-percent employee
turnover rate for employees who have been with the System for less
than five years. The turnover rate in Rural locations, such as
Kotzebue, is 100 percent for five-year or less employees, and at
times the turnover has been 100-percent in one year. One factor in
the high Rural turnover is that the local boroughs or Native
Corporations offer higher compensation to employees than the State
does for similar work.
Mr. Christensen reminded the Committee that the Legislature has
historically provided non-judicial Court employees a cost of living
adjustment (COLA) equal to the COLA provided to union employees.
When this failed to occur in 1993, non-supervisory Court employees
voted to join the IBEW union. In 1996, the Legislature provided
both union and non-union employees a COLA amount that restored
parity. Subsequently, those Court employees voted to de-certify the
IBEW when the first collective bargaining agreement expired. Pay
equity rather than working conditions appears to have been the
driving force behind the initial vote. Currently, "the Court System
has the largest non-union shop in State government".
Mr. Christensen informed the Committee that while the salaries of
the Alaska Court System's judges "were ranked first in the nation
in 1982", today, "according to the National Center of State Courts,
the salary of a Superior Court Judge in Alaska ranks 49th, once
adjusted for cost of living". This decline has occurred in a little
more than twenty years. "The average annual increase for Superior
Court Judges in other states during the period from 1992 to 2004
was three-point-one percent. In Alaska it averaged under one
percent which was well under half the rate of inflation … unlike
other State employees, Judges do not get annual longevity
increases". The salary of a new Judge is exactly the same as a
Judge with 15 years of experience. There are no longevity increases
to compensate for missed cost of living adjustments. In addition,
the geographic differential (GD) provided to Rural judges is
substantially less than that of other State employees. For example,
a union employee in Barrow receives a 43-percent GD and a non-union
employee receives a 31.5 percent GD. The local Superior Court Judge
receives a 17-percent GD. In addition, Judges' geographic
differential is calculated only on the first $40,000 of his or her
salary. Other State employees' GD is calculated on their entire
salary. Due to the combination of there being no longevity
increases and a limited GD, there are places in Rural Alaska in
which the local prosecutor or the local public defender makes more
than the local Superior Court Judge.
Mr. Christensen stated that this bill would provide non-judicial
Court employees a salary adjustment effective in FY 2006 that would
place the Court's salary schedule on par with the salary schedule
approved last year for Alaska Public Employees Association (APEA)
members. Nonetheless, Court employees have lost substantial ground
to inflation over the last two decades. Judges would receive a
salary increase equal to the percentage increase that SB 71
proposes for a Range 28 Step E in the Executive Branch, as State
Statutes ties a Judge's salary to that Range.
Mr. Christensen observed that this increase would improve Alaska's
judges' ranking of 49th in the nation to 47th place. The increase
would be appreciated, and by approving this bill, "the Legislature
would send a message that it values Court employees as much as it
does union employees in the Executive Branch and that it doesn't
take their hard work for granted." Support of this bill would be
appreciated.
9:55:00 AM
Co-Chair Green understood therefore that the Court System views
this legislation "as a good thing for its employees".
Mr. Christensen affirmed.
9:55:24 AM
PAM VARNI, Executive Director, Legislative Affairs Agency, noted
that in the 1980s and again in the 1990s, Executive Branch
employees received salary increases that Legislative Branch
employees did not. "Currently, Legislative employees' salaries are
roughly five-percent behind their counterparts in the Executive and
Judicial Branches with the exception of partially exempt employees.
This bill should be passed as a matter of fairness and to eliminate
any suggestion that employees doing similar work are not paid
equally. It is long overdue. You want to retain the best and the
brightest employees". Numerous "employees have been lost to the
Executive Branch because they can take a position at the same range
and step and make more money or they accept positions at a higher
range, and receive an additional five percent increase in pay".
Ms. Varni stated that absent parity in salary, it is difficult to
retain employees such as attorneys, programmers, personal
assistants, and Legislative staffers. When reviewing the
Legislative budget, "the drain" of long-term Legislative staff is
noticeable as the number of Legislative staff receiving longevity
Step increases is decreasing. In addition to this, the Legislative
Affairs Agency is experiencing difficulty in recruiting Legislative
Information Office (LIO) teleconference moderators in Rural areas
as the "private sector wages are higher". It is difficult for staff
at the lower Range levels "to keep up with cost of living". Wage
adjustments are not keeping pace with the cost of living. In the
15-year period from 1988 to 2003, the Anchorage Consumer Price
Index (CPI) increased 49.89-percent while Legislative pay increased
14.72-percent: a difference of 35.08-percent. "This is a
significant difference". When comparing Alaska's Legislative wage
increases for the past five years to other state's it is found that
in contrast to Alaska's five percent increase, New Mexico increased
14.5-percent, Louisiana increased 30-percent, Indiana increased
12.7-percent, Virginia increased 11.8-percent, and Rhode Island
increased 12.3-percent.
Ms. Varni thanked the Committee for their attention, and, as a
manager and personnel officer, she urged for passage of this bill
in order "to make wages fair and equitable to all employees in the
Legislative branch".
Co-Chair Wilken noted that, regardless of political affiliation,
over the years, Administrations have "struggled" in their search to
find individuals to fill commissioner positions. Extended searches
have occurred and oftentimes, the people filling those positions
"have the financial means" that allow them to fulfill their public
service. This is a re-occurring situation every election cycle. To
that point, he asked whether this bill would be the avenue through
which commissioner salaries could be addressed.
9:59:12 AM
Mr. Tibbles replied that the salaries of commissioners "are unique
because they are tied to a range and a step". That creates a
situation in which the salaries are frozen. As a result, other
employees' salaries could increase beyond that of the Commissioner.
He noted however, that people serve the state for a variety of
reasons: some of them "are financially able" to accept the position
at a lower salary than they would make in other professions.
Generally; however, this is a concern. There were three acting
commissioners this year. He shared that a number of the applicants
would be taking a pay cut from their current job were they to
become commissioner.
Co-Chair Green asked whether the applicants who would have taken a
pay reduction were existing State employees.
Mr. Tibbles affirmed that a number of the applicants were State
employees who would have received less compensation had they taken
a commissioner position.
10:00:32 AM
Co-Chair Wilken suggested that the commissioner salary issue be
addressed in this legislation. Doing so could assist in making the
process of hiring a commissioner easier for the next governor. Such
conditions as implementing a salary upgrade effective date to
coincide with the seating of the next governor could be considered.
Co-Chair Green noted that action eliminating the statutorily
specified salary range and allowing the position to be subject to
the range and step process could also be considered.
Mr. Tibbles opined that a simple solution would be to eliminate the
Step "E" designation and simply include the Range 28 designation in
Statute. This would allow the commissioner salary to move up the
steps in the same manner that other State employees do.
Co-Chair Green asked whether the Range 28 Step "E" designation is
frozen at its original level or would increase in line with other
State salary increases.
Mr. Tibbles verified that it increases with the State's statutory
schedules.
Co-Chair Green asked for confirmation that the salary currently
increases in that manner.
Mr. Tibbles affirmed.
Co-Chair Green stated that further work on this legislation would
be conducted.
The bill was HELD in Committee.
10:02:36 AM
Co-Chair Green announced that Senator Bunde is excused.
Senator Dyson introduced his wife and the wife of his staff person,
Lucky Schultz.
ADJOURNMENT
Co-Chair Green adjourned the meeting at 10:03 AM.
| Document Name | Date/Time | Subjects |
|---|