Legislature(2001 - 2002)

05/01/2002 01:15 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SJR 37 - CONST AM: HIRING FREEZE                                                                                              
Number 0305                                                                                                                     
GWENDOLYN  HALL,  Staff  to  Senator  Pete  Kelly,  Alaska  State                                                               
Legislature, said on  behalf of Senator Kelly,  sponsor, that his                                                               
intent in introducing  SJR 37 is to help slow  down the growth of                                                               
government  in facing  a  $1.3 billion  deficit.   [Senate  Joint                                                               
Resolution  37]  will  grant the  legislature  the  authority  to                                                               
demand that the  executive branch implement a hiring  freeze.  It                                                               
will not, however, outline any  particular type of hiring freeze;                                                               
rather,  such  would  be  discussed   at  a  later  date  by  the                                                               
legislature should that body see fit to demand a hiring freeze.                                                                 
CHAIR ROKEBERG called an at-ease from 2:58 p.m. to 2:59 p.m.                                                                    
Number 0449                                                                                                                     
JACK KREINHEDER,  Chief Analyst,  Office of the  Director, Office                                                               
of Management &  Budget (OMB), Office of the  Governor, said that                                                               
he  would begin  his remarks  by quoting  Representative Coghill,                                                               
who in  a House State  Affairs Standing Committee  (HSTA) hearing                                                               
said that  SJR 37 is  "Senator Kelly's latest attempt  to rewrite                                                               
the constitution  one line  at a time."   Mr.  Kreinheder posited                                                               
that   although  Representative   Coghill   was  probably   being                                                               
facetious when he said that, his  comment did contain a kernel of                                                               
truth.   Mr. Kreinheder  said he  is offering  that quote  in the                                                               
context of  questioning whether  the concept  embodied in  SJR 37                                                               
rises  to  the   level  of  deserving  to   be  a  constitutional                                                               
amendment.  He went on to say:                                                                                                  
     I'm not going to get into a lot of detail on the pros                                                                      
     and cons or merits of a hiring freeze; we debated that                                                                     
     at some length in  [HSTA] and Representatives James and                                                                    
     Coghill  were   familiar  with   that.     The  Knowles                                                                    
     Administration did do a hiring  freeze in 1999 when oil                                                                    
     prices  dropped below  $10 a  barrel.   I don't  recall                                                                    
     exactly how  long it was in  effect - I believe  it was                                                                    
     somewhat  in excess  of six  months.   There were  some                                                                    
     modest  savings,  but we  did  that  in response  to  a                                                                    
     short-term  problem,  which  was  oil  prices  dropping                                                                    
     precipitously.   [In]  our current  situation, ...  our                                                                    
     revenue  problem  is not  a  short-term  problem -  oil                                                                    
     prices are higher than average  right now.  We've got a                                                                    
     long-term  problem, and  it's simply  not realistic  to                                                                    
     have a  hiring freeze  in effect for  the next  five or                                                                    
     ten years and expect that to solve our problem.                                                                            
     ... A number  of other states have  done hiring freezes                                                                    
     or [are]  in the middle  of it because of  the national                                                                    
     recession and  the declines in  their tax  revenues and                                                                    
     so forth.  But, again,  they're looking at a short-term                                                                    
     problem, and  those hiring freezes will  be lifted when                                                                    
     the economy picks back up  and their revenues return to                                                                    
     normal.  The people have  referred to the hiring freeze                                                                    
     as  a  management  tool;  that's   true,  but  I  would                                                                    
     characterize it as management  by chance, or management                                                                    
     by meat axe  really, as opposed to a  precision type of                                                                    
     tool, because  if you  want to  reduce the  budget, our                                                                    
     view is  that the legislature should  decide where they                                                                    
     want it reduced and do that.   With a hiring freeze, it                                                                    
     is just chance  or luck ... which  employees will leave                                                                    
     their jobs and which positions will end up vacant.                                                                         
Number 0632                                                                                                                     
MR. KREINHEDER continued:                                                                                                       
     I  just  checked  with  ...  Sharon  Barton  [Director,                                                                    
     Division  of Personnel,  Department of  Administration]                                                                    
     and  she tells  me  that ...  their preliminary  latest                                                                    
     estimate for  annual state turnover  is between  11 and                                                                    
     12 percent; in  other words, 11 or 12  percent of state                                                                    
     employees leave  their jobs  in any  one year....   And                                                                    
     there's approximately  16,000 state employees  now, not                                                                    
     counting the university,  so if we had  a hiring freeze                                                                    
     in effect  for a year  and there were no  exceptions to                                                                    
     it, we'd  be looking  at something  in excess  of 1,600                                                                    
     positions  being left  vacant,  with the  corresponding                                                                    
     impacts on state  services.  And while  you could argue                                                                    
     that  it's more  fair or  better for  the employees  to                                                                    
     have hiring  freeze than layoffs,  the effect  on state                                                                    
     services isn't  going to be  any different than  if you                                                                    
     fired 1,600 state employees.   And, as you can imagine,                                                                    
     those would be some significant impacts.                                                                                   
     One  thing  we  hadn't mentioned  in  prior  testimony:                                                                    
     speaking  with the  representative  of the  university,                                                                    
     her   understanding  is   that  this   [constitutional]                                                                    
     amendment,  unless  there  were some  exception,  would                                                                    
     apply   to   the   university    as   well....      The                                                                    
     [constitutional]  amendment  does say,  "in  accordance                                                                    
     with law"; however, it does  not provide any exceptions                                                                    
     ...  for  public  safety  or   health  issues  such  as                                                                    
     [Alaska]  State  Troopers,  or  child  protection/child                                                                    
     abuse  workers, correctional  officers,  and so  forth.                                                                    
     So that's  one concern,  is that it  appears to  be, on                                                                    
     the  face of  it, a  blanket requirement  that the  ...                                                                    
     executive branch  could not hire any  employees or fill                                                                    
     any vacancies  in the executive  branch.   Perhaps that                                                                    
     would be  clarified by  statute, but  there's certainly                                                                    
     no guarantee of that.                                                                                                      
Number 0787                                                                                                                     
MR. KREINHEDER concluded:                                                                                                       
     [The]  Department of  Law  raised  some legal  concerns                                                                    
     about  this amendment;  we discussed  those in  [HSTA].                                                                    
     Just  briefly, there  has  been  case law,  nationally,                                                                    
     that  a  constitutional  amendment  that  significantly                                                                    
     changes  the balance  of  power  between the  executive                                                                    
     branch,  legislative  branch,   or  the  court  system,                                                                    
     depending on how  far it goes, if it goes  too far, the                                                                    
     courts   have   held  that   cannot   be   done  by   a                                                                    
     constitutional  amendment because  it's  one branch  of                                                                    
     the  government imposing  its will  on  the other,  and                                                                    
     that  it would  have  to be  done  in a  constitutional                                                                    
     convention  instead.    Whether  this  [constitutional]                                                                    
     amendment rises  to that level  is debatable,  it's not                                                                    
     black  and white,  but the  question does  exist, since                                                                    
     it's  taking  one  of the  governor's  powers  -  basic                                                                    
     powers, which is  for the executive branch  to hire and                                                                    
     appoint  employees -  and restricting  that and  giving                                                                    
     the legislature that power.                                                                                                
MR.  KREINHEDER, in  response to  a  question, said  that he  was                                                               
referring to  case law from  California and elsewhere,  and noted                                                               
that  he could  provide  the committee  with further  information                                                               
later.  In response to another  question, he said that even if an                                                               
exception  for   Department  of  Public  Safety   employees  were                                                               
included, the administration would still oppose SJR 37.                                                                         
MS. HALL  explained that SJR  37 does not include  any exemptions                                                               
because it was not intended to  outline the specifics of a hiring                                                               
freeze; SJR  37 simply  grants the  legislature the  authority to                                                               
require the executive  branch to implement a hiring  freeze.  She                                                               
noted that  SJR 37 is not  intended to be a  solution to Alaska's                                                               
deficit  problem,  it  is  merely  intended as  a  tool  to  help                                                               
decrease the  growth of state  government.  She pointed  out that                                                               
1,200  new state  positions have  been created  since 1995.   She                                                               
observed that  although the legislature can  appropriate money to                                                               
individual  departments, it  has no  say in  how those  funds are                                                               
actually spent once received by the departments.                                                                                
CHAIR ROKEBERG surmised  that if SJR 37 is  adopted, the specific                                                               
resolution requiring a hiring freeze  could be drafted to include                                                               
exemptions.  [SJR 37 was held over.]                                                                                            

Document Name Date/Time Subjects