03/25/2024 09:00 AM Senate FINANCE

SENATE BILL NO. 259                                                                                                           
                                                                                                                                
     "An  Act  relating to  the  basic  salary schedule  for                                                                    
     compensation of  state employees; and providing  for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:08:47 AM                                                                                                                    
                                                                                                                                
Co-Chair Olson relayed that it was the first hearing SB
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9:09:03 AM                                                                                                                    
                                                                                                                                
JEFF STEPP, STAFF, SENATOR ELVI GRAY-JACKSON, introduced                                                                        
himself and read from a prepared statement:                                                                                     
                                                                                                                                
     Senate  Bill   259,  Compensation  for   Certain  State                                                                    
     Employees,  is  legislation  necessary  to  resolve  an                                                                    
     oversight  contained within  a  section  of House  Bill                                                                    
     226,  which  passed the  legislature  in  2022. HB  226                                                                    
     included a  provision meant  to ensure  state employees                                                                    
     who  are  not  covered  by a  bargaining  unit  receive                                                                    
     salary adjustments  in parity with those  negotiated by                                                                    
     the supervisory bargaining unit.                                                                                           
                                                                                                                                
     However, due the Department  of Law's interpretation of                                                                    
     that  section, as  detailed in  a  Legal Services  memo                                                                    
     included  in  your  bill   packet,  the  Department  of                                                                    
     Administration  has  been  unable  to  implement  these                                                                    
     salary adjustments  for approximately 2,800  exempt and                                                                    
     partially  exempt  employees  across  the  Legislative,                                                                    
     Executive, and Judicial branches.                                                                                          
                                                                                                                                
     SB 259  seeks to solve  the problem by  providing clear                                                                    
     and   unambiguous  authority   to  the   Department  of                                                                    
     Administration  to  adjust   salaries  for  exempt  and                                                                    
     partially   exempt   employees.   This  bill   is   not                                                                    
     introducing a  new concept; rather,  it is  a necessary                                                                    
     corrective measure  to fulfill  the original  intent of                                                                    
     one  section of  HB 226  when it  was supported  by the                                                                    
     Legislature and became law two years ago.                                                                                  
                                                                                                                                
     By   amending  AS   39.27.011(m),  SB   259  offers   a                                                                    
     streamlined    approach    to    salary    adjustments,                                                                    
     eliminating  the need  for  further legislative  action                                                                    
     for  each   salary  schedule  change.  This   not  only                                                                    
     expedites  the  process  but   also  ensures  that  our                                                                    
     employees   are   compensated   fairly   (and   without                                                                    
     additional  burdens.)   Moreover,  the   bill  includes                                                                    
     provisions for  these adjustments to be  retroactive to                                                                    
     July 1,  2023, which  is necessary  to rectify  the pay                                                                    
     disparity experienced  by affected employees  since the                                                                    
     passage of HB  226 two years ago. The  fiscal impact of                                                                    
     the  1  percent COLA  in  the  current fiscal  year  is                                                                    
     $4,177,000   ($2,746,700  Executive   Branch;  $909,300                                                                    
     Courts;   and   $521,000   Legislature).   Supplemental                                                                    
     funding  would be  required to  pay  for this  cost-of-                                                                    
     living adjustment in FY 24.                                                                                                
                                                                                                                                
Mr. Stepp referenced  a memo from the Division  of Legal and                                                                    
Research Services  dated March  4, 2024  (copy on  file). He                                                                    
noted that there were staff  available from personnel, human                                                                    
resources,   and  finance   from  all   three  branches   of                                                                    
government to answer questions.                                                                                                 
                                                                                                                                
SB  259  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
9:12:29 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:17:14 AM                                                                                                                    
RECONVENED