Legislature(2007 - 2008)HOUSE FINANCE 519

03/13/2008 01:30 PM House FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 194 FINES AND OFFENSES TELECONFERENCED
<Bill Hearing Canceled>
+ HB 324 LOW-INCOME HOUSING; HOMELESSNESS TELECONFERENCED
Heard & Held
*+ HB 417 NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 359 PROBATION AND MINOR CONSUMING TELECONFERENCED
Moved CSHB 359(FIN) Out of Committee
+= HB 364 NOTICE & CONSENT FOR MINOR'S ABORTION TELECONFERENCED
Scheduled But Not Heard
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.                                                                                           
                                                                                                                                
KEVIN    BROOKS,   DEPUTY    COMMISSIONER,   DEPARTMENT    OF                                                                   
ADMINISTRATION,  introduced  HB  417  by  section.  The  bill                                                                   
addresses  pay   issues  for  non-covered   state  employees,                                                                   
including   employees   in  the   executive,   judicial   and                                                                   
legislative branches.  The bill restates the  salary schedule                                                                   
to  reflect  a  5.5%  retroactive   increase  and  identifies                                                                   
several positions that need adjustment.                                                                                         
                                                                                                                                
   · Sec. 1 adjusts pay for the members of the Limited Entry                                                                    
     Commission from range 26, step C to range 27 with no                                                                       
     step designation.                                                                                                          
   · Sec. 2 conforms HB 417 to the Alaska State Defense                                                                         
     Force statute.                                                                                                             
   · Sec. 3 adjusts pay for the chief procurement officer                                                                       
     position, which has been functioning in dual roles,                                                                        
     from  range  24  to  range  27,  consistent  with  other                                                                   
     directors. Senate Bill 171 does the same.                                                                                  
   · Sec.   4  removes   a   step  designation   for   deputy                                                                   
     commissioners upon appointment.                                                                                            
   · Sec. 5  restates the salary  schedule effective  July 1,                                                                   
     2007 to reflect a 5.5% increase.                                                                                           
   · Sec. 6  provides language  adjusting the schedule  by 3%                                                                   
     for FY 09.                                                                                                                 
   · Sec. 7 adjusts the schedule another 3% for FY 10.                                                                          
   · Sec.  8 creates  pay increments  computed at  a rate  of                                                                   
     3.75% for employees  who have attained step  F. A person                                                                   
     could be eligible for a merit  increase every two years.                                                                   
    A subsection allows the same for legislative staff.                                                                         
   · Sec.  9  moves  the  Regulatory   Commission  of  Alaska                                                                   
     commissioners from range 26C to 27 without steps.                                                                          
   · Sec. 10 repeals  longevity steps and replaces  them with                                                                   
     pay increments.                                                                                                            
   · Sec.   11  clarifies   executive   branch  pay.   Anyone                                                                   
     currently  receiving  a  salary  override,  as  well  as                                                                   
     commissioners  whose pay was  adjusted three  years ago,                                                                   
     would  not  receive  the  5.5%  or  the  3%.  There  are                                                                   
     mechanisms in  place that compensates  those individuals                                                                   
     adequately; the intent is to close the gap.                                                                                
   · Sec.  12  provides  for   increments  for  the  judicial                                                                   
     branch.                                                                                                                    
   · Sec.  13  gives  employees   of  the  University  salary                                                                   
     increases in accordance with  the compensation policy of                                                                   
     the Board of Regents.                                                                                                      
   · Sec.   14   stipulates  that   the   salary   increments                                                                   
     identified earlier are prospective.                                                                                        
   · Sec.  15   provides  transition  language   so  that  no                                                                   
     individual is harmed by the  bill, but credited for time                                                                   
     served.                                                                                                                    
   · Sec. 17 makes the first 5.5% adjustment retroactive.                                                                       
                                                                                                                                
1:59:31 PM                                                                                                                    
                                                                                                                                
Representative  Gara referred  to Sec. 5  and asked  how many                                                                   
steps were currently in place.  Mr. Brooks answered A through                                                                   
F. Representative Gara asked if  the only additional step was                                                                   
the 3.75% every  two years. Mr. Brooks explained  the current                                                                   
longevity steps and  said the bill removes limits  on how far                                                                   
a person can go. There was a discussion  regarding details of                                                                   
how the steps can be used to address  recruitment difficulty.                                                                   
Representative  Gara did  not think  the longevity  allowance                                                                   
addressed the difficulty.                                                                                                       
                                                                                                                                
2:05:46 PM                                                                                                                    
                                                                                                                                
CHRIS  CHRISTENSEN,  DEPUTY ADMINISTRATIVE  DIRECTOR,  ALASKA                                                                   
COURT SYSTEM,  pointed out that  the judicial branch  has the                                                                   
largest  and lowest paid  group of  non-covered employees  in                                                                   
state government  outside the  University. Approximately  70%                                                                   
of  employees  are range  15  or  below.  This means  a  high                                                                   
turnover rate,  which translates  to high training  costs and                                                                   
other inefficiencies.  In  spite of this,  the employees  are                                                                   
hardworking and committed. He  noted that over the past three                                                                   
years,  court   employees  have   received  cost   of  living                                                                   
adjustments (COLA)  substantially lower than the  actual rate                                                                   
of inflation.  He thought the  change in longevity  pay would                                                                   
help the courts keep mid-level workers longer.                                                                                  
                                                                                                                                
Mr. Christensen spoke to two provisions  in the bill that the                                                                   
court system  is not  in accord with.  First, while  the bill                                                                   
gives COLA to  magistrates and judges, it does  not give them                                                                   
the retroactive  pay raise for  the current fiscal  year, nor                                                                   
does it give  magistrates longevity changes.  The majority of                                                                   
magistrates are underpaid compared  to similar workers in the                                                                   
executive  branch. Second,  he was  concerned about  grouping                                                                   
judges together  with political  appointees in the  executive                                                                   
branch.  Judges  do  not  get   longevity  increases,  unlike                                                                   
regular state employees, who can  get step increases equal to                                                                   
around 35%  of their salary over  an 18-year career.  A judge                                                                   
working for  18 years earns  as much  as a new judge,  making                                                                   
judges uniquely  dependent on  COLA. In two decades,  Alaskan                                                                   
judges  have gone  from being  the highest  paid state  court                                                                   
judges  in  the  country  to next  to  last.  It  has  become                                                                   
difficult  to  retain judges  and  to  recruit new  ones.  He                                                                   
wanted the salaries  to keep up with inflation  (Statement on                                                                   
File).                                                                                                                          
                                                                                                                                
2:12:13 PM                                                                                                                    
                                                                                                                                
Representative Crawford thought  the same story could be told                                                                   
across all state employment.                                                                                                    
                                                                                                                                
BRUCE  LUDWIG,  BUSINESS  MANAGER,  ALASKA  PUBLIC  EMPLOYEES                                                                   
ASSOCIATION  (APEA/AFT), spoke  for two  groups within  state                                                                   
government,  the  state  supervisors   and  the  confidential                                                                   
employees.   The   supervisory    unit   recently   completed                                                                   
negotiations, which  he described.  He referred to  a handout                                                                   
(On File) showing average state  service. Supervisors are the                                                                   
employees with the highest longevity.                                                                                           
                                                                                                                                
Mr. Ludwig  added that  APEA/AFT would like  to see  the bill                                                                   
amended  so that  it  would not  be effective  for  executive                                                                   
branch  employees until  offered to  classified employees  as                                                                   
well.  The  second  handout  (On File)  shows  who  the  bill                                                                   
targets;  APEA/AFT proposes  amending  it so  that many  more                                                                   
people are affected.                                                                                                            
                                                                                                                                
2:18:00 PM                                                                                                                    
                                                                                                                                
Representative Harris asked if  the members of the groups Mr.                                                                   
Ludwig  listed were  represented  through union  negotiations                                                                   
and contracts. He asked if the  people talked about in HB 417                                                                   
had  a  bargaining  unit.  Mr.  Ludwig  answered  that  their                                                                   
bargaining unit  was the commissioner. He said  the longevity                                                                   
increases had  been denied in  bargaining because it  was not                                                                   
authorized. Representative Harris  surmised that the only way                                                                   
the people  classified under  HB 417  would get increases  is                                                                   
through statute.                                                                                                                
                                                                                                                                
2:20:03 PM                                                                                                                    
                                                                                                                                
Co-Chair   Chenault   sought  clarification   regarding   the                                                                   
offering  and denying  of the  longevity steps.  He asked  if                                                                   
APEA/AFT had gone  to arbitration and accepted  the decision.                                                                   
Mr. Ludwig replied that they bargained it with the State.                                                                       
                                                                                                                                
2:21:07 PM                                                                                                                    
                                                                                                                                
FRED YATES, SELF, testified in  favor of the bill. He thought                                                                   
the people  covered deserve what  is being offered.  He asked                                                                   
for  the longevity  steps  to  be  included as  incentive  to                                                                   
retain people.                                                                                                                  
                                                                                                                                
2:23:14 PM                                                                                                                    
                                                                                                                                
ANNETTE     KREITZER,     COMMISSIONER,     DEPARTMENT     OF                                                                   
ADMINISTRATION,   described   the   two  tracks   for   state                                                                   
employees:  those represented  by  collective bargaining  and                                                                   
those who are not. The bill is for the later group.                                                                             
                                                                                                                                
Commissioner   Kreitzer  clarified   some  of  Mr.   Ludwig's                                                                   
remarks. She said the entire offer  had to be accepted, which                                                                   
is what the union  did. There are many components  to a labor                                                                   
contract; it's dangerous  to separate one out.  The State has                                                                   
the  same  challenges  as any  other  employer  dealing  with                                                                   
recruitment  and  retention.   The  Department  wants  to  be                                                                   
equitable.                                                                                                                      
                                                                                                                                
Representative  Gara  talked  about  the  difference  between                                                                   
union and non-union employees.  He understood that collective                                                                   
bargaining governs union pay and  the bill should govern non-                                                                   
union pay. He stated that the  place where the two groups are                                                                   
the same relates to longevity,  and thought it made sense for                                                                   
everyone  to have  a  two year  increase  after reaching  the                                                                   
final step.                                                                                                                     
                                                                                                                                
Commissioner  Kreitzer described  her job  as looking  at the                                                                   
full cost  of each  negotiated contract  and judging  whether                                                                   
the cost was sustainable.                                                                                                       
                                                                                                                                
Representative Gara restated his  concern regarding longevity                                                                   
as  a problem  that applied  to  union as  well as  non-union                                                                   
employees.  He wanted  the bill  to address  the problem  for                                                                   
both groups.                                                                                                                    
                                                                                                                                
Commissioner Kreitzer maintained  that she would not separate                                                                   
out one  piece of  a contract.  Representative Gara  asked if                                                                   
union  employees  had the  same  problem with  getting  stuck                                                                   
after  reaching   the  final   step.  Commissioner   Kreitzer                                                                   
acknowledged that they did.                                                                                                     
                                                                                                                                
2:30:35 PM                                                                                                                    
                                                                                                                                
Commissioner Kreitzer  commented that the union  had accepted                                                                   
the  agreement. Representative  Gara  questioned whether  the                                                                   
employees meant to  convey that they were satisfied  with the                                                                   
longevity  situation. Commissioner  Kreitzer reiterated  that                                                                   
she had to keep union and non-union issues separate.                                                                            
                                                                                                                                
Representative Kelly pointed out  that union members pay dues                                                                   
to get someone  to bargain. He thought it would  be a serious                                                                   
mistake to legislate that process.                                                                                              
                                                                                                                                
2:33:55 PM                                                                                                                    
                                                                                                                                
Representative  Hawker tried to  find a broader  perspective.                                                                   
Although   he  thought  non-union   employees  deserved   the                                                                   
recognition  proposed in  the bill, he  understood the  State                                                                   
had  to prioritize  financially.  He talked  about  important                                                                   
human service workers  who have endured pay  freezes for many                                                                   
years  and  wondered how  Commissioner  Kreitzer  prioritized                                                                   
giving a raise to the highest paid state employees.                                                                             
                                                                                                                                
2:37:17 PM                                                                                                                    
                                                                                                                                
Commissioner Kreitzer  disagreed that the people  targeted in                                                                   
the  bill  were   the  highest  compensated   employees.  She                                                                   
stressed that  the bill is  about non-covered  employees. She                                                                   
described  the aging of  the workforce  and the pressures  to                                                                   
solve  the retention  and  recruitment  problems  as soon  as                                                                   
possible.  She  suggested moving  one  step  at a  time.  She                                                                   
thought HB 417 was a reasonable step forward.                                                                                   
                                                                                                                                
2:39:53 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  stated that  he  was not  comfortable                                                                   
with the  legislation, given the  resources available  to the                                                                   
State in relationship to the State's greatest needs.                                                                            
                                                                                                                                
Representative Kelly said he could  support a bargaining/non-                                                                   
bargaining  wage  freeze, but  he  could not  support  saving                                                                   
money on just one  group. He did not want the  Legislature to                                                                   
interfere with union activity.                                                                                                  
                                                                                                                                
2:43:23 PM                                                                                                                    
                                                                                                                                
Representative  Crawford asked  about the  40-hour work  week                                                                   
and  wondered if  what was  given up  for that.  Commissioner                                                                   
Kreitzer  responded that  many  state employees  are  already                                                                   
working  more  than 40  hours.  The  service steps  were  the                                                                   
inducement for the  40-hour work week.  Her goal  was to move                                                                   
towards  the 40-hour work  week for  non-union employees  and                                                                   
later for management, although it would be expensive.                                                                           
                                                                                                                                
2:47:06 PM                                                                                                                    
                                                                                                                                
PUBLIC TESTIMONY CLOSED.                                                                                                        
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment #1.                                                                                     
                                                                                                                                
     Page  5,  line 3:  Following  "employees",  Insert  "and                                                                   
     magistrates"; Page 5, line  4: Following "than":, Delete                                                                   
     "magistrates  and judicial  officers", Insert  "justices                                                                   
     and  judges"; Page  5, line  11: Following  "employees",                                                                   
     Insert  "and  magistrates";  Following  "than":,  Delete                                                                   
     "magistrates  and judicial  officers", Insert  "justices                                                                   
     and  judges";  Page  5, line  13:  Following  "courts":,                                                                   
     Insert  "and"; Page  5,  line 14:  Following  "courts":,                                                                   
     Delete ",and  magistrates"; Page  5, line 16:  Following                                                                   
     "AS 22.15.220":, Delete "(b) and".                                                                                         
                                                                                                                                
Representative Hawker OBJECTED.                                                                                                 
                                                                                                                                
Mr. Christensen  said the Amendment would allow  the judicial                                                                   
branch  magistrates  to  get   the  retroactive  pay  and  to                                                                   
participate in the longevity step increases.                                                                                    
                                                                                                                                
Co-Chair  Chenault asked  if  the new  fiscal  note would  be                                                                   
adjusted to the  Amendment. Mr. Christensen said  the size of                                                                   
the note would increase by $217,000.                                                                                            
                                                                                                                                
2:49:16 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
Representative Thomas  asked for clarification  regarding the                                                                   
Amendment.                                                                                                                      
                                                                                                                                
Representative Hawker WITHDREW his OBJECTION.                                                                                   
                                                                                                                                
There being no further OBJECTION, Amendment #1 was ADOPTED.                                                                     
                                                                                                                                
Co-Chair Meyer referred  to the changes needed  in the fiscal                                                                   
notes.                                                                                                                          
                                                                                                                                
HB  417  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
2:51:33 PM                                                                                                                    
                                                                                                                                

Document Name Date/Time Subjects