Legislature(2005 - 2006)HOUSE FINANCE 519

04/13/2005 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 182(FIN) Out of Committee
Heard & Held
Moved CSHB 98(STA) Out of Committee
Scheduled But Not Heard
Bills Previously Heard/Scheduled
Moved CSHB 32(FIN) Out of Committee
Moved CSHB 54(FIN) Out of Committee
HOUSE BILL NO. 98                                                                                                             
     "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."                                                                                                           
MIKE   TIBBLES,   DEPUTY   COMMISSIONER,    OFFICE   OF   THE                                                                   
COMMISSIONER,  DEPARTMENT OF  ADMINISTRATION, explained  that                                                                   
HB  98  matches  the statutory  schedule  for  the  partially                                                                   
exempt/exempt  employees  in the  legislative  executive  and                                                                   
judicial   branches,  to   the   salary  schedules   recently                                                                   
negotiated with the  supervisory unit.  He describe  the two-                                                                   
tier approach  that is  required to  update salary  schedules                                                                   
for  state  employees.     One  is  through   the  collective                                                                   
bargaining   process,   the   second   tier   for   partially                                                                   
exempt/exempt  employees.   Because there  are two  different                                                                   
approaches,   the  salary  schedules   have  drifted   apart.                                                                   
Currently  they are  5 percent  off, and will  increase  to 9                                                                   
percent at the end of the recently negotiated contracts.                                                                        
Mr.  Tibbles  expressed  three  concerns.    The  pay  system                                                                   
requires payment  based on  "like pay  for like work",  which                                                                   
will not meet  statutory obligation.  He referred  to a chart                                                                   
on page  3 of the packet  "Comparison of Statutory,  Judicial                                                                   
and Supervisory Salary Schedules"  (copy on file.)  The other                                                                   
two   concerns   regard   upward   career   progression   and                                                                   
recruitment.  He recommended that  the legislature  adopt the                                                                   
statutory schedule.                                                                                                             
4:16:16 PM                                                                                                                    
In response  to a question  from Co-Chair Meyer,  Mr. Tibbles                                                                   
replied that it  is common practice to submit  legislation to                                                                   
track  the  two  salary  schedules.    They  are  not  always                                                                   
approved in  the same  year and so  there is sometimes  catch                                                                   
up, like there is this year.                                                                                                    
In  response to  a  question  from Representative  Holm,  Mr.                                                                   
Tibbles  explained the  difference  between  steps A  through                                                                   
step F.                                                                                                                         
In  response to  a question  from  Representative Kelly,  Mr.                                                                   
Tibbles reiterated the current  and projected salary schedule                                                                   
4:17:51 PM                                                                                                                    
Representative Croft  asked for the  total cost for  the next                                                                   
five years.   Mr. Tibbles describe  each of the  three fiscal                                                                   
notes.   Representative Croft  questioned the "free  ride" of                                                                   
organizations  that   have  not  negotiated.     Mr.  Tibbles                                                                   
responded  that the  salary schedule  applies to  individuals                                                                   
that  are exempt  from  collective  bargaining  and it  meets                                                                   
statutory obligation.   He pointed out problems  if parity is                                                                   
not followed.                                                                                                                   
4:20:37 PM                                                                                                                    
Representative  Hawker  observed  that  the  legislature  has                                                                   
imposed  upon itself  a 23.5  percent reduction  in per  diem                                                                   
pay.  He questioned what happened to cost reduction.                                                                            
MILA    COSGROVE,    DIRECTOR,   DIVISION    OF    PERSONNEL,                                                                   
ADMINISTRATION  underscored  the parity  issue  of the  bill.                                                                   
She  addressed Representative  Croft's  concern about  equity                                                                   
and  negotiation  issues.   She  spoke  of an  obligation  to                                                                   
insure  "like  pay  for  like  work", and  a  duty  to  treat                                                                   
management level and "rank and file" fairly.                                                                                    
Representative   Kelly  asked  which   comes  closest   to  a                                                                   
competitive scale.   Ms. Cosgrove reported that  the state of                                                                   
Alaska   does  not   have  a   market   driven  pay   system.                                                                   
Representative Kelly  noted that equal pay for  equal work is                                                                   
not relevant today.  He asked  how competitiveness is sensed.                                                                   
4:24:11 PM                                                                                                                    
Ms. Cosgrove replied  that the executive branch  is hemmed in                                                                   
by statute.   She explained that  the pay is  not competitive                                                                   
with the  private sector.  She  agreed that steps need  to be                                                                   
taken  to  adjust  pay  scales.     There  is  an  impact  on                                                                   
recruitment.     Representative  Kelly  suggested   that  the                                                                   
department should  be aware of the market condition  in order                                                                   
to get  to a  competitive measurement.   He stressed  another                                                                   
reason to stay competitive.                                                                                                     
4:26:50 PM                                                                                                                    
CHRIS  CHRISTENSEN,  DEPUTY  ADMINISTRATOR,   OFFICE  OF  THE                                                                   
ADMINISTRATIVE  DIRECTOR,  ALASKA  COURT SYSTEM,  shared  the                                                                   
background  of  the  court system.    He  related  statistics                                                                   
surrounding  court employees.    He discussed  high  turnover                                                                   
rates and  talked about cost-of-living adjustments  resulting                                                                   
in employees  joining  a union.   He related  the history  of                                                                   
judges'  salaries in  Alaska, including  a comparison  of the                                                                   
average annual  increases for judges nationally  and locally.                                                                   
Judges do  not get annual longevity  increases.  He  spoke of                                                                   
rural  judge  differentials.     HB  98  would  bring  salary                                                                   
adjustments  equal to  salaries approved  by the  legislature                                                                   
for APEA  members last  year.   The bill  sends a message  to                                                                   
employees  that the legislature  does value  them as  much as                                                                   
union employees.                                                                                                                
4:33:03 PM                                                                                                                    
He referred  to  Representative Croft's  question about  non-                                                                   
union employees stating that often  non-monetary compensation                                                                   
in union contracts is not matched.                                                                                              
4:37:27 PM                                                                                                                    
Vice-Chair Stoltze recalled that  there has been an effort to                                                                   
match  employees' salaries.   He  noted that  judges have  an                                                                   
honorary position.                                                                                                              
Mr.  Christensen  responded  that  going from  number  49  to                                                                   
number  47 does  not seem  to  be much  of an  increase.   He                                                                   
contrasted private sector lawyers  with public sector lawyers                                                                   
and judicial pay raises.                                                                                                        
4:38:05 PM                                                                                                                    
PAM VARNI,  EXECUTIVE DIRECTOR,  LEGISLATIVE AFFAIRS  AGENCY,                                                                   
testified  in support  of HB  98,  for equity  reasons.   She                                                                   
recalled  the history  of the executive  and judicial  salary                                                                   
schedules.     She  described  the  difference   between  the                                                                   
partially exempt and CPIU salary  increases as 26.68 percent.                                                                   
She shared  statistics from  various states regarding  salary                                                                   
increases.  The per diem rate  has gone down for legislators,                                                                   
which is set by Department of Defense.                                                                                          
4:40:44 PM                                                                                                                    
Vice-Chair  Stoltze  asked  on  who's  behalf  Ms.  Varni  is                                                                   
testifying.    She  replied  on  the  behalf  of  the  agency                                                                   
employees.  Legislative council would also support this.                                                                        
4:41:48 PM                                                                                                                    
Representative Hawker  observed that the  bill puts him  in a                                                                   
very  uncomfortable   position.     Dealing  with   costs  of                                                                   
retirement plans  is a big  issue.  Alaska's retirement  plan                                                                   
is very generous.   He suggested "do no harm  until we figure                                                                   
out how to solve  the problem."    He debated  the other side                                                                   
of the  argument.   He stated his  opposition to  the radical                                                                   
changes proposed  to the  PERS and TRS  plans.  He  suggested                                                                   
that granting  a wage increase  is hypocritical on  his part.                                                                   
He stated  that his concern is  not with equity  and fairness                                                                   
to employees.                                                                                                                   
4:45:27 PM                                                                                                                    
Co-Chair  Meyer suggested  proposing  a  hiring freeze  until                                                                   
PERS  and  TRS  is  decided.    He  emphasized  that  current                                                                   
employees need  to be treated fairly.   He spoke in  favor of                                                                   
passing HB 98.                                                                                                                  
Vice-Chair Stoltze agreed with Representative Hawker                                                                            
Representative Holm  also agreed with Representative  Hawker.                                                                   
He quoted  the high  pay level  of 28 E.   He voiced  concern                                                                   
about  COLA,  vacation  pay, and  other  compensations.    He                                                                   
requested more information about those costs.                                                                                   
4:47:50 PM                                                                                                                    
Co-Chair Meyer pointed out that  union employees have already                                                                   
received  their  wages.    This  bill  will  bring  non-union                                                                   
employees up to the same level.                                                                                                 
4:49:03 PM                                                                                                                    
Ms. Cosgrove spoke of collective bargaining.                                                                                    
ART   CHANCE,   DIRECT,  LABOR   RELATIONS,   DEPARTMENT   OF                                                                   
ADMINISTRATION,  shared   information  about   the  executive                                                                   
branch  related to  leave, pay,  geographical  differentials,                                                                   
and merit steps, all established in statute.                                                                                    
4:51:56 PM                                                                                                                    
Representative  Foster spoke in  support of the  legislation.                                                                   
He concluded that  denial of the legislation  would result in                                                                   
greater unionization.                                                                                                           
Mr.  Chance stated  that the  only employees  that could  not                                                                   
collectively  bargain are  elected  and appointed  officials.                                                                   
He  noted that  he is  currently seeking  to eliminate  labor                                                                   
relations staff from the current bargaining unit.                                                                               
4:54:20 PM                                                                                                                    
Co-Chair  Chenault  referred   to  Section  6,  salaries  for                                                                   
University  of  Alaska, and  questioned  why  they are  being                                                                   
treated differently.                                                                                                            
Ms.  Cosgrove  noted that  the  university pay  structure  is                                                                   
completely  different from  the other  branches.  Mr.  Chance                                                                   
added that  many of  their salaries  are established  through                                                                   
collective bargaining.                                                                                                          
4:55:52 PM                                                                                                                    
Representative  Kelly spoke  in support  of the  legislation.                                                                   
He  observed that  public pay  has  slipped, the  legislation                                                                   
would only raise judges  from 49  to 47[place   in regards to                                                                   
pay nationally],  and there is  a threat of  underemployment.                                                                   
He stressed  that the  PERS and  TRS issue  is separate.   He                                                                   
concluded that employees  would be lost or organized  if this                                                                   
legislation is not adopted.                                                                                                     
4:59:30 PM                                                                                                                    
Co-Chair Meyer  pointed out that it  is not an union  or non-                                                                   
union issue, but one of fairness and equality.                                                                                  
Representative Foster  MOVED to report  CSHB 98 (STA)  out of                                                                   
Committee with  the accompanying  fiscal notes.   There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
CSHB 98 (STA) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation  and with three  fiscal impact notes:  #1 GOV,                                                                   
#2 LEG, and a new CRT note.                                                                                                     

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