03/17/2008 01:30 PM House FINANCE

HOUSE BILL NO. 417                                                                                                            
                                                                                                                                
     An Act relating  to the compensation for  certain public                                                                   
     officials,  officers,  and   employees  not  covered  by                                                                   
     collective  bargaining   agreements;  relating   to  pay                                                                   
     increments   for  longevity   in   state  service;   and                                                                   
     providing for an effective date.                                                                                           
                                                                                                                                
Co-Chair Meyer  reminded the Committee  of the status  of the                                                                   
bill and described the fiscal notes.                                                                                            
                                                                                                                                
Representative  Gara  recapped previous  questions  regarding                                                                   
employee  shortages the  State is  facing due  to the  salary                                                                   
schedule and salary review system.  He had asked Commissioner                                                                   
Kreitzer the conditions  under which it would  possible to go                                                                   
from step A to F in order to hire someone.                                                                                      
                                                                                                                                
2:25:36 PM                                                                                                                    
                                                                                                                                
KEVIN    BROOKS,   DEPUTY    COMMISSIONER,   DEPARTMENT    OF                                                                   
ADMINISTRATION (DOA),  replied that currently there  is not a                                                                   
mechanism for granting advanced  steps based on a shortage in                                                                   
a job classification.                                                                                                           
                                                                                                                                
Representative  Gara  thought   the  system  was  arcane.  He                                                                   
thought  HB 417  should be  able  to do  something about  the                                                                   
situation. He  wanted a provision  saying an employer  can go                                                                   
between steps  if needed to  fill a position.  Co-Chair Meyer                                                                   
was  not sure  HB 417  was  the right  bill  for the  change.                                                                   
Representative Gara  thought the bill was the  right place to                                                                   
change the  hiring system to  allow a department  to exercise                                                                   
discretion rather  than having  the Legislature  telling them                                                                   
what to pay people.                                                                                                             
                                                                                                                                
Mr. Brooks  acknowledged Representative  Gara's point,  which                                                                   
addressed  the  primary  reasons  for  the  creation  of  the                                                                   
Administrative  Workgroup on Recruitment  and Retention.  The                                                                   
Department of Administration has  found different impediments                                                                   
in the  hiring system in  different departments. The  goal is                                                                   
to  look  at   the  entire  system,  including   geographical                                                                   
differences, the  classification system, and the  pay system.                                                                   
The situation is complex, but  the Department is committed to                                                                   
working through the problems.                                                                                                   
                                                                                                                                
2:29:11 PM                                                                                                                    
                                                                                                                                
Mr.  Brooks added  that  there  is some  flexibility  through                                                                   
using  the criteria  of recruitment  difficulty,  exceptional                                                                   
qualifications,  or  both.  Recruitment   difficulty  is  the                                                                   
factor  that   addresses  shortages.  Some   departments  are                                                                   
limiting themselves by doing State-only  recruitments, and he                                                                   
worried that that limited candidate pools.                                                                                      
                                                                                                                                
Representative  Gara stated  that  sometimes  the problem  is                                                                   
that the  salary offered is  inadequate, regardless  of other                                                                   
criteria. He  wanted to address  the issue of the  ability to                                                                   
pay more in those situations.                                                                                                   
                                                                                                                                
Mr. Brooks promised  that DOA is looking at where  there is a                                                                   
shortage of  workers, and said  in those cases there  is some                                                                   
ability to offer a higher step.                                                                                                 
                                                                                                                                
2:33:34 PM                                                                                                                    
                                                                                                                                
Representative  Joule thought  there might  be two  different                                                                   
discussions.  Mr. Brooks  said  similar issues  do exist  for                                                                   
both union and non-union groups,  but the bill addresses non-                                                                   
covered employees.  In many cases  the solutions will  be the                                                                   
same, including adjusting pay.                                                                                                  
                                                                                                                                
Co-Chair  Meyer  asked  if there  were  classifications  with                                                                   
flexibility to  go above the  normal grade range.  Mr. Brooks                                                                   
replied  that there  were fully  exempt classifications,  oil                                                                   
and  gas positions  specifically, paid  on salary  overrides;                                                                   
they  get paid  what  the market  will  bear. Co-Chair  Meyer                                                                   
wondered   if  similar   strategy  could   be  used   in  the                                                                   
departments.  Mr.  Brooks  replied  that  would  mean  moving                                                                   
classified  employees  to  the  exempt  service,  from  union                                                                   
representation    to    non-union     representation,    with                                                                   
accompanying challenges and issues.                                                                                             
                                                                                                                                
Representative  Gara turned the  discussion to the  non-union                                                                   
employee  issue.  He  said  there  are  still  shortages.  He                                                                   
thought  a provision  could be  put into the  bill along  the                                                                   
lines of:  "The commissioner  of an agency  may offer  any of                                                                   
these step  ranges if  needed to fill  an open position."  He                                                                   
wanted  give the agency  commissioner  the authority  to make                                                                   
the  decision  as  needed.  Mr.   Brooks  believed  that  the                                                                   
authority  already  exists  for   non-classified,  non-union,                                                                   
fully  or  partially   exempt  employees,  where   there  are                                                                   
shortages.                                                                                                                      
                                                                                                                                
2:37:54 PM                                                                                                                    
                                                                                                                                
Representative Gara asked if the  agency could offer up to an                                                                   
F step  if needed  to fill a  shortage. Mr. Brooks  responded                                                                   
that there  is nothing that simple.  Criteria are set  to try                                                                   
and  maintain  consistency in  the  pay system.  The  typical                                                                   
criteria used are recruitment  difficulty, as demonstrated by                                                                   
a   lack    of   qualified    candidates,   or    exceptional                                                                   
qualifications, or both.                                                                                                        
                                                                                                                                
Representative  Kelly  commented  that  the  difficulty  with                                                                   
making it  too easy to  go to an  F step is that  supervisors                                                                   
can do it  for the wrong  reasons and throw the  whole system                                                                   
off. He thought it would be difficult  to make such a complex                                                                   
change with an amendment.                                                                                                       
                                                                                                                                
Co-Chair Meyer  pointed out that  there was not  an amendment                                                                   
yet.                                                                                                                            
                                                                                                                                
2:40:34 PM                                                                                                                    
                                                                                                                                
Representative Gara  asked if the  ability to move from  an A                                                                   
to an  F because of  a shortage  applied to union  employees.                                                                   
Mr. Brooks answered  that an agency can and does  offer up to                                                                   
an F, using the same criteria.                                                                                                  
                                                                                                                                
Co-Chair  Chenault  MOVED  to  REPORT CSHB  417(FIN)  out  of                                                                   
Committee  with individual recommendations  and attached  new                                                                   
fiscal note  by the Alaska Court  System, new fiscal  note by                                                                   
the Legislative  Affairs Agency, and  new fiscal note  by the                                                                   
Office of Management and Budget.                                                                                                
                                                                                                                                
Representative Gara  OBJECTED for discussion. He  stated that                                                                   
there are major  shortages and that he was  very dissatisfied                                                                   
with the Administration's answers.  He thought the attempt to                                                                   
keep the  budget down  resulted in a  refusal to  address the                                                                   
reality that many  people are being underpaid.  The bill will                                                                   
help non-union employees get pay  increases as they get older                                                                   
and  their expenses  go  up. The  bill  will  not help  union                                                                   
people if  the union  isn't powerful enough  to get  the same                                                                   
thing into  a labor  contract. He did  not agree  that people                                                                   
should be treated differently  because of being union or non-                                                                   
union. A  human being should not  be left at the  same salary                                                                   
level, especially  taking into  consideration cost  of living                                                                   
changes.                                                                                                                        
                                                                                                                                
Representative  Gara WITHDREW his  OBJECTION. There  being NO                                                                   
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
CSHB  417(FIN)  was  REPORTED   out  of  Committee  with  "no                                                                   
recommendation"  and attached new  fiscal note by  the Alaska                                                                   
Court  System, new  fiscal note  by  the Legislative  Affairs                                                                   
Agency, and new  fiscal note by the Office  of Management and                                                                   
Budget.