03/29/2022 03:30 PM Senate STATE AFFAIRS

           SB 195-PAY INCREASES FOR EXEMPT EMPLOYEES                                                                        
                                                                                                                                
4:26:10 PM                                                                                                                  
CHAIR   SHOWER  reconvened   the   meeting   and  announced   the                                                               
consideration  of SENATE  BILL NO.  195 "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."                                                                                               
                                                                                                                                
4:26:31 PM                                                                                                                    
SENATOR JESSE  KIEHL, Alaska  State Legislature,  Juneau, Alaska,                                                               
sponsor of  SB 195,  described the legislation  as a  pay catchup                                                               
bill  for exempt  and partially  exempt  employees. He  explained                                                               
that this refers  to public workers who are not  represented by a                                                               
union.   This   includes   the  civil   attorneys,   prosecutors,                                                               
administrative clerks,  and paralegals at the  Department of Law;                                                               
many of  the people who work  at public corporations such  as the                                                               
line employees  at the Alaska  Industrial Development  and Export                                                               
Authority (AICEA)  who do the investment  analysis; the employees                                                               
at  the  Alaska  Seafood Marketing  Institute  (ASMI);  political                                                               
appointees   within   departments,  other   than   commissioners;                                                               
legislative  staff; all  employees  at the  Alaska Court  System,                                                               
including judges;  and the nonpartisan  staff at  the Legislative                                                               
Affairs Agency.                                                                                                                 
                                                                                                                                
In  total,  the  bill  applies  to  about  2,400  state  workers.                                                               
Historically,  when   the  General  Government  Unit,   which  is                                                               
represented   by   the   Alaska  State   Employees   Association,                                                               
negotiates a  contract for  a pay  increase, the  legislature has                                                               
applied those same  pay increases to exempt  and partially exempt                                                               
employees. The legislature did not do  that when the last GGU pay                                                               
increase was negotiated so the pay  for these employees is a full                                                               
contract  cycle  behind.  SB  195  makes  up  that  five  percent                                                               
difference in pay over the course of two years.                                                                                 
                                                                                                                                
SENATOR  KIEHL  noted  that  the  Commissioner  Designee  of  the                                                               
Department of  Administration talked about the  difficulties with                                                               
recruitment earlier in this meeting.  He said this applies across                                                               
all departments  and in the private  sector and it does  not make                                                               
it any easier when comparable jobs  have a pay difference of five                                                               
percent. It will also feed  into the retention problem because it                                                               
doesn't  make sense  to stay  and  get paid  less. Similarly,  it                                                               
doesn't make  sense for the legislature  to not catch up  the pay                                                               
for those employees who  are not in a union to  the pay for those                                                               
who are represented.                                                                                                            
                                                                                                                                
SENATOR  KIEHL said  his staff  Cathy Schlingheyde  would present                                                               
the sectional  analysis and the  director of Personnel  and Labor                                                               
Relations was available to answer more technical questions.                                                                     
                                                                                                                                
4:30:30 PM                                                                                                                    
SENATOR COSTELLO requested a copy of the salary schedule.                                                                       
                                                                                                                                
SENATOR KIEHL  directed attention to  Section 1 of the  bill that                                                               
reflects the 2.5 percent increase  for the first year. He offered                                                               
to  provide  the  schedule  for the  following  year  that  would                                                               
reflect  the second  2.5 percent  increase  for a  total of  five                                                               
percent.                                                                                                                        
                                                                                                                                
4:31:18 PM                                                                                                                    
SENATOR KAWASAKI asked  if he had an analysis of  the effect this                                                               
would have on the retirement system.                                                                                            
                                                                                                                                
SENATOR KIEHL replied he did  not have a standalone analysis, but                                                               
it  is   well  within  the   actuarial  assumptions   the  Alaska                                                               
Retirement  Management  (ARM)  Board  has made  for  funding  the                                                               
Public Employees Retirement System (PERS) for defined benefits.                                                                 
                                                                                                                                
CHAIR SHOWER requested the sectional  analysis and an explanation                                                               
of the fiscal note.                                                                                                             
                                                                                                                                
4:32:07 PM                                                                                                                    
CATHY  SCHLINGHEYDE, Staff,  Senator  Jesse  Kiehl, Alaska  State                                                               
Legislature,  Juneau, Alaska,  presented  the sectional  analysis                                                               
for SB 195 that read as follows:                                                                                                
                                                                                                                                
     Section  1: 2.5%  salary  increase  for classified  and                                                                  
     partially exempt employees in  the executive branch not                                                                    
     covered  by a  collective bargaining  unit and  for all                                                                    
     legislative employees in FY 23.                                                                                            
                                                                                                                                
     Section  2:  An  additional 2.5%  salary  increase  for                                                                  
     classified  and  partially   exempt  employees  in  the                                                                    
     executive   branch   not   covered  by   a   collective                                                                    
     bargaining unit  and for  all legislative  employees in                                                                    
     FY 24.                                                                                                                     
                                                                                                                                
     Section 3:  Repeals a defunct section  of statute which                                                                  
     changed salaries in 2015.                                                                                                  
                                                                                                                                
     Section 4:  The salary  increases in  sections 1  and 2                                                                  
     apply to exempt employees in the executive branch.                                                                         
                                                                                                                                
     Section 5:  The salary  increases in  sections 1  and 2                                                                  
     apply to  employees in the judicial  branch not covered                                                                    
     by a collective bargaining unit.                                                                                           
                                                                                                                                
     Section 6:  The salary  increases in  sections 1  and 2                                                                  
     apply  to employees  of the  University  of Alaska  not                                                                    
     covered by a collective bargaining unit.                                                                                   
                                                                                                                                
     Section 7:  The initial 2.5% increase  takes effect for                                                                  
     FY 23.                                                                                                                     
                                                                                                                                
4:33:15 PM                                                                                                                    
CHAIR SHOWER asked which University  of Alaska employees would be                                                               
covered by Section 6.                                                                                                           
                                                                                                                                
MS.   SCHLINGHEYDE  replied   she  would   follow  up   with  the                                                               
information.                                                                                                                    
                                                                                                                                
CHAIR SHOWER said he would appreciate the information.                                                                          
                                                                                                                                
SENATOR  KIEHL  clarified  that  this  would  not  apply  to  the                                                               
university employees who are represented  by the three bargaining                                                               
units at the university.                                                                                                        
                                                                                                                                
CHAIR SHOWER asked the sponsor to review the fiscal note.                                                                       
                                                                                                                                
4:34:16 PM                                                                                                                    
SENATOR KIEHL  explained that the  fiscal note includes  the cost                                                               
estimates for  the affected  employees in  all three  branches of                                                               
government. The  cost in  year one  will be  $8.6 million  and an                                                               
additional  $8.8 million  the second  year. Of  that, about  $5.8                                                               
million  is   unrestricted  general  fund  (UGF),   a  little  is                                                               
designated   general  fund   (DGF)  and   the  rest   comes  from                                                               
interagency receipts.                                                                                                           
                                                                                                                                
CHAIR SHOWER  asked if  cost increases  in program  receipts were                                                               
anticipated  to  make  up  some  of  the  revenue  that  will  be                                                               
required.                                                                                                                       
                                                                                                                                
SENATOR  KIEHL  offered  his understanding  that  the  Office  of                                                               
Management  and  Budget  (OMB) included  the  university  in  its                                                               
fiscal note, but he would double check.                                                                                         
                                                                                                                                
CHAIR SHOWER said  he would like to know whether  any of the cost                                                               
increases for wages would be passed  along to the public. He also                                                               
asked if this would be the only fiscal note.                                                                                    
                                                                                                                                
MS. SCHLINGHEYDE replied this is  expected to be the final fiscal                                                               
note.                                                                                                                           
                                                                                                                                
CHAIR SHOWER asked  if he expected the director  of Personnel and                                                               
Labor Relations to testify.                                                                                                     
                                                                                                                                
SENATOR KIEHL replied  he did not believe  the administration had                                                               
prepared any testimony.                                                                                                         
                                                                                                                                
4:36:50 PM                                                                                                                    
CHAIR SHOWER held SB 195 in committee for future consideration.