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 | |
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.
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