Legislature(2005 - 2006)CAPITOL 106

04/20/2005 08:30 AM RULES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 123 OCCUPATIONS: FEES & EXTENSION OF BOARDS
Moved CSHB 123(RLS) Out of Committee
HB 98 NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT
Heard & Held
Bills Previously Heard/Scheduled
= HB 121 SERVICE AREAS IN SECOND CLASS BOROUGHS
Moved CSHB 121(2d RLS) Out of Committee
HB  98-NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT                                                                              
                                                                                                                                
CHAIR ROKEBERG announced  that the final order  of business would                                                               
be 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."                                                                                                                          
                                                                                                                                
9:11:52 AM                                                                                                                    
                                                                                                                                
CHAIR ROKEBERG explained that he calendared this bill to discuss                                                                
potential amendments and to review whether legislators should be                                                                
included in the bill.                                                                                                           
                                                                                                                                
9:13:05 AM                                                                                                                    
                                                                                                                                
MIKE TIBBLES, Deputy Commissioner, Department of Administration,                                                                
presented HB 98 to the committee.  He stated:                                                                                   
                                                                                                                                
     House Bill  98 matches  the statutory pay  schedule for                                                                    
     partially exempt  and exempt employees  in legislative,                                                                    
     judicial, and  the executive branch of  government, and                                                                    
     provides  the same  wage adjustment  that was  recently                                                                    
     negotiated  by  the  supervisory  unit  in  the  public                                                                    
     employees  association.   We  have  a two-step  process                                                                    
     that's  required to  provide  wage  adjustments to  our                                                                    
     state  employees, and  one  is  through the  collective                                                                    
     bargaining process  where we submit the  monetary terms                                                                    
     to  the  legislature,  and  that   has  been  done  and                                                                    
     included in  the House budget.   We have  a significant                                                                    
     amount of  increase this year in  wage adjustments. ...                                                                    
     We  have submitted  monetary terms  last year  and this                                                                    
     year  to the  legislature  and so  far  in the  process                                                                    
     those haven't been approved in  the budget.  The second                                                                    
     step  to   provide  the  wage  adjustments   for  state                                                                    
     employees is  to introduce legislation similar  to what                                                                    
     you  have  in  front  of  you now.    That  covers  the                                                                    
     partially exempt and exempt employees.                                                                                     
                                                                                                                                
MR. TIBBLES continued:                                                                                                          
                                                                                                                                
     We feel this  bill is really important for  a number of                                                                    
     reasons.  The  first reason is just basic  equity.  Our                                                                    
     statute  requires us  to pay  our state  employees like                                                                    
     pay for  like work.  And  [in the case of]  the failure                                                                    
     of the  passage of this bill,  we will see a  9 percent                                                                    
     difference between the employees  of a particular range                                                                    
     ... under  the collective bargaining agreement  and the                                                                    
     statutory  schedule.    And  that  does  ...  cause  us                                                                    
     problems because  I don't believe  we'd be  meeting our                                                                    
     statutory obligations. ...                                                                                                 
                                                                                                                                
     The second  concern that I  have is an  issue regarding                                                                    
     recruiting  qualified  managers.     We're  asking  our                                                                    
     managers to do  more and more, and when we  get to such                                                                    
     a  disparity  between the  contracts,  I  feel that  we                                                                    
     really place  a heightened burden and  challenge on our                                                                    
     ability to hire qualified managers.                                                                                        
                                                                                                                                
     And  the  third  concern  I  have is  that  we  have  a                                                                    
     difficult time getting  people to move up  into some of                                                                    
     the senior management positions.   You have supervisors                                                                    
     or supervisors  that are paid  on a  statutory schedule                                                                    
     and  it doesn't  take long  for the  supervisor of  the                                                                    
     supervisor to  make less than  the people  that they're                                                                    
     supervising.                                                                                                               
                                                                                                                                
MR.  TIBBLES turned  attention to  some charts  in the  committee                                                               
packets.   He stated that the  last page shows an  example of the                                                               
last scenario mentioned above.                                                                                                  
                                                                                                                                
9:16:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BERKOWITZ  remarked that  he hoped this  bill will                                                               
inspire the consistent  application of this line  of reasoning by                                                               
the administration:  the desire  to recruit  and retain,  and the                                                               
desire to  have competitive pay.   He  said, "I hope  that you'll                                                               
keep those  thoughts in your  mind as  you review changes  to the                                                               
[Public Employees' Retirement  System (PERS)/Teachers' Retirement                                                               
System  (TRS)] system,  because  all of  those  issues are  right                                                               
there too."                                                                                                                     
                                                                                                                                
9:17:34 AM                                                                                                                    
                                                                                                                                
CHAIR  ROKEBERG inquired  as  to  how this  would  play out  with                                                               
senior commissioners.                                                                                                           
                                                                                                                                
MR. TIBBLES  replied, "The commissioners are  a unique situation;                                                               
their  statute is  set  at a  particular range  and  step in  the                                                               
statute, ... 28E."   He explained that a 28E  yearly salary would                                                               
be about $91,000.   He noted that many people have  to take a pay                                                               
reduction to take a position as commissioner.                                                                                   
                                                                                                                                
CHAIR  ROKEBERG  shared  an  anecdote in  which  an  deputy  city                                                               
attorney [outside of Alaska] was  making more money than Alaska's                                                               
attorney  general.    He  remarked   that  many  who  take  on  a                                                               
commissioner  role  give  up  substantial  compensation  for  the                                                               
leadership  position,  and  many  times  a  commissioner  has  to                                                               
maintain  homes  in  Southcentral  and  in  Juneau,  which  is  a                                                               
financial burden.                                                                                                               
                                                                                                                                
9:20:20 AM                                                                                                                    
                                                                                                                                
MR. TIBBLES  noted that the salary  of the governor of  Alaska is                                                               
$85,700 and that of the lieutenant governor is $80,000.                                                                         
                                                                                                                                
CHAIR ROKEBERG remarked that these  elected officials were making                                                               
less money than the appointed commissioners.                                                                                    
                                                                                                                                
9:21:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCGUIRE asked  Chair  Rokeberg if  he planned  to                                                               
take amendments to the bill at a later time.                                                                                    
                                                                                                                                
CHAIR  ROKEBERG explained  that his  intention is  to add  to the                                                               
bill, not  change it.  He  remarked that he thought  there should                                                               
be a public debate regarding  whether commissioners' wages should                                                               
be raised.   He noted that he'd  like to look at  an amendment to                                                               
the schedule  for commissioners  offered a few  years ago  by the                                                               
previous  administration.    He commented  that  the  [committee]                                                               
needs to act relatively quickly,  as there is similar legislation                                                               
in the  Senate Labor and  Commerce Standing Committee.   He said,                                                               
"It  seems  obvious  to  me  that we  are  in  a  very  difficult                                                               
recruitment position here."                                                                                                     
                                                                                                                                
9:24:36 AM                                                                                                                    
                                                                                                                                
PAMELA  VARNI, Executive  Director,  Legislative Affairs  Agency,                                                               
paraphrased  from  the   following  written  testimony  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     In  the  80's and  again  in  the 90's,  the  Executive                                                                    
     Branch  received a  raise, which  legislative employees                                                                    
     did not receive.   Currently, legislative employees lag                                                                    
     roughly 5%  behind their counterparts in  the Executive                                                                    
     and Judicial  Branches with the exception  of partially                                                                    
     exempt employees.                                                                                                          
                                                                                                                                
     This bill should be passed  as a matter of fairness and                                                                    
     to  eliminate  any   suggestion  that  employees  doing                                                                    
     similar  work  are  not  paid  equally.    It  is  long                                                                    
     overdue.                                                                                                                   
                                                                                                                                
     You  want   to  retain  the  best   and  the  brightest                                                                    
     employees.    We  have  lost   many  employees  to  the                                                                    
     Executive Branch  because they  can take a  position at                                                                    
     the same range  and step and make more money  - or they                                                                    
     accept  positions  at a  higher  range  and receive  an                                                                    
     additional 5% increase  in pay.  We need to  stay on an                                                                    
     even  par to  retain attorneys,  programmers, personnel                                                                    
     assistants  and probably  most  important  to each  and                                                                    
     every one  of you  are the  staff working  directly for                                                                    
     you.    It   is  interesting  to  note   the  drain  of                                                                    
     legislative assistants.  In budgeting  I do not see the                                                                    
     higher  longevity steps  that we  used to  have in  the                                                                    
     legislative branch.                                                                                                        
                                                                                                                                
     Also, we  have had difficulty  over the years  in rural                                                                    
     areas  hiring  our   teleconference  moderators.    The                                                                    
     private  sector wages  are higher  and we  have trouble                                                                    
     competing to attract people to come and work for us.                                                                       
                                                                                                                                
     It is  difficult for our  staff at the lower  ranges to                                                                    
     keep up  with the  cost of  living.   To give  you some                                                                    
     idea  of  the difference  between  the  cost of  living                                                                    
     increases and our legislative pay  increases - the CPIU                                                                    
     increased  from 1988  to  2003 (15  years)  a total  of                                                                    
     41.4% -     legislative pay increased  14.72%.   We are                                                                    
     26.68%  lower  than the  CPIU.    It is  a  significant                                                                    
     difference.                                                                                                                
                                                                                                                                
     To   give  you   some   comparisons   to  other   State                                                                    
     Legislatures on  how their  salaries have  changed over                                                                    
     the last five years.                                                                                                       
                                                                                                                                
     New Mexico     increased 14.5%                                                                                             
     Louisiana      increased 30%                                                                                               
     Indiana        increased 12.7%                                                                                             
     Virginia       increased 11.8%                                                                                             
     Rhode Island   increased 12.3%                                                                                             
     Alaska         increased 5%                                                                                                
                                                                                                                                
     Thank you for  your time and as a  manager and previous                                                                    
     personnel officer I  urge you to pass HB 98  to be fair                                                                    
     and  equitable  to  all employees  in  the  Legislative                                                                    
     Branch  whether  we  are   talking  about  an  analyst,                                                                    
     janitor, programmer,  legislative assistant, secretary,                                                                    
     etc.                                                                                                                       
                                                                                                                                
9:29:31 AM                                                                                                                    
                                                                                                                                
MS. VARNI, in response to Chair Rokeberg, explained that                                                                        
legislators were equivalent to a Range 10A in 1991, but now are                                                                 
down to about a Range 8.                                                                                                        
                                                                                                                                
CHAIR ROKEBERG  asked Ms.  Varni to  prepare information  for the                                                               
committee regarding  the possibility of raising  that range level                                                               
up to a 10A or 15A.                                                                                                             
                                                                                                                                
MS. VARNI noted that a fiscal note had been prepared.                                                                           
                                                                                                                                
9:30:43 AM                                                                                                                    
                                                                                                                                
KARLA  SCHOEFIELD,   Deputy  Director,   Accounting,  Legislative                                                               
Administrative  Services, Legislative  Affairs Agency,  explained                                                               
that there is a $1.6 million fiscal  note.  She opined that it is                                                               
important  for this  bill to  pass this  year.   She noted,  "The                                                               
legislature has  over the last  few years lapsed over  $3 million                                                               
each year,  and if it  were the will  of the legislature  and the                                                               
...  committees   in  charge  of   the  money  were   willing  to                                                               
redistribute  their   funds  and  salaries  from   all  of  their                                                               
components,  the legislature  as  a whole  could probably  absorb                                                               
this in FY06."                                                                                                                  
                                                                                                                                
9:31:38 AM                                                                                                                    
                                                                                                                                
CHAIR  ROKEBERG pointed  out that  "other  discussions have  been                                                               
going on about other adjustments" in order to retain staff.                                                                     
                                                                                                                                
9:32:08 AM                                                                                                                    
                                                                                                                                
CHRIS CHRISTENSEN,  Deputy Administrative Director,  Alaska Court                                                               
System,   paraphrased  from   the  following   written  testimony                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     I would like to  thank Governor Murkowski for including                                                                    
     the  employees  of  the Alaska  Court  System  in  this                                                                    
     legislation.                                                                                                               
                                                                                                                                
     First,  a   little  background.   We  have   about  733                                                                    
     permanent  employees. 62  are judges  appointed by  the                                                                    
     governor, 39 are magistrates, and  most of the rest are                                                                    
     clerical  employees.   We absorb  less than  2% of  the                                                                    
     operating budget;  that makes us smaller  than a number                                                                    
     of  individual  departments  in the  executive  branch.                                                                    
     While we  are small, more private  citizens come though                                                                    
     our doors every  day than any other  entity, other than                                                                    
     perhaps  the university.  Unfortunately, many  of those                                                                    
     people are angry or scared,  they are going through the                                                                    
     most  traumatic experience  of  their  lives, and  they                                                                    
     don't understand  how the system  works. These  are the                                                                    
     people that  our employees work  with every  day. These                                                                    
     people were  involved in over  150,000 new  cases filed                                                                    
     last  year.  Court  employees   work  hard  under  very                                                                    
     stressful conditions. However, I  have often heard from                                                                    
     employees  that they  are proud  of the  work they  do,                                                                    
     they believe  that what  they do  matters, and  most of                                                                    
     them do it  for a low salary. 70% of  our employees are                                                                    
     compensated at  Range 15 or below.  Low salaries result                                                                    
     in  a high  turnover rate  (approximately 50%  before 5                                                                    
     years, and as  much as 100% in some  rural courts where                                                                    
     we compete with higher  salaries or benefits offered by                                                                    
     the  local  Native  corporations or  boroughs),  and  a                                                                    
     large  percentage of  court  system clerical  employees                                                                    
     have second jobs.                                                                                                          
                                                                                                                                
     The  legislature  has historically  given  non-judicial                                                                    
     court  employees  a  cost-of-living  adjustment  (COLA)                                                                    
     equal to the  COLA it has approved  for union employees                                                                    
     in the executive branch. The  last time it failed to do                                                                    
     so  was in  1993.  Shortly thereafter,  non-supervisory                                                                    
     court employees voted to join the IBEW.                                                                                    
                                                                                                                                
MR. CHRISTENSEN continued:                                                                                                      
                                                                                                                                
     In 1996, the legislature  gave both union and non-union                                                                    
     court employees  a COLA that  restored parity  with the                                                                    
     salaries that had been approved  for union employees in                                                                    
     the  executive branch.  The  unionized court  employees                                                                    
     subsequently  voted to  decertify the  IBEW as  soon as                                                                    
     the  first  collective  bargaining  agreement  expired.                                                                    
     Workers  organize  for  different  reasons.  For  court                                                                    
     employees,  the  main driver  seemed  to  be equity  in                                                                    
     compensation   rather    than   changes    in   working                                                                    
     conditions.                                                                                                                
                                                                                                                                
     With respect to our  judges, salaries were ranked first                                                                    
     in  the nation  in 1982.  Today, however,  the National                                                                    
     Center for  State Courts  states that  the salary  of a                                                                    
                                             th                                                                                 
     superior court judge in Alaska ranks  49  when adjusted                                                                    
     for cost-of-living. Normally when  we talk about states                                                                    
                   th                                                                                                           
     that  are   49   in   something,  we're   referring  to                                                                    
     Mississippi or Arkansas; not in  this case. The average                                                                    
     annual  increase in  salaries for  general jurisdiction                                                                    
     judges in  other states during  the period from  1992 -                                                                    
     2004 was  3.1%. In  Alaska, it  averaged less  than 1%,                                                                    
     well under half the rate of inflation.                                                                                     
                                                                                                                                
     Unlike other state employees, judges  do not get annual                                                                    
     longevity  increases;  the salary  of  a  new judge  is                                                                    
     identical to  the salary  of a judge  with 15  years of                                                                    
     experience.  Thus, there  is no  longevity increase  to                                                                    
     help compensate for a failure  to provide adequate cost                                                                    
     of  living  adjustments.  In addition,  the  geographic                                                                    
     differential  received  by  rural judges  is  generally                                                                    
     much less than that  received by other state employees.                                                                    
     In Barrow,  for example, a  union employee gets  43%; a                                                                    
     non-union  employee gets  31.5%;  and  the local  judge                                                                    
     gets  only 17%,  Moreover, the  geographic differential                                                                    
     is  limited  to the  first  $40,000  of salary,  unlike                                                                    
     other state  employees who have it  calculated on their                                                                    
     entire  salaries.  Because  of the  lack  of  longevity                                                                    
     increases  and  the  limited  geographic  differential,                                                                    
     there  are  actually  long-time  prosecutors  in  rural                                                                    
     Alaska  who  make  substantially more  than  the  local                                                                    
     superior court judge.                                                                                                      
                                                                                                                                
MR. CHRISTENSEN continued:                                                                                                      
                                                                                                                                
     HB  98 would  give  the non-judicial  employees of  the                                                                    
     Alaska Court System  a salary adjustment in  FY 06 that                                                                    
     would place their salary  schedule approximately on par                                                                    
     with the  salary schedule  approved by  the legislature                                                                    
     last session for members of  the APEA. Even if they get                                                                    
     this, court employees will  still have lost substantial                                                                    
     ground to  inflation over the last  decade. Judges will                                                                    
     get a  salary increase  equal to the  percentage salary                                                                    
     increase that  HB 98  proposes for a  Range 28E  in the                                                                    
     executive branch.  With this increase,  Alaska's judges                                                                    
                      thth                                                                                                      
     will leap from 49 place to 47 place.                                                                                       
                                                                                                                                
     This  bill sends  a message  that the  legislature does                                                                    
     value  court  employees  as much  as  it  values  union                                                                    
     employees  in the  executive branch,  and that  it does                                                                    
     not take  their hard  work for  granted. Thank  you for                                                                    
     your consideration.                                                                                                        
                                                                                                                                
9:38:41 AM                                                                                                                    
                                                                                                                                
CHAIR ROKEBERG asked if pages are Range 10A.                                                                                    
                                                                                                                                
MS. VARNI  replied that  this was  correct.   She noted  that the                                                               
janitors  are  Range 8,  but  they  may move  to  Range  9.   She                                                               
commented  that Range  9  is really  the lowest  pay,  so if  the                                                               
legislators do  not get  a raise,  they will  be the  lowest paid                                                               
people.                                                                                                                         
                                                                                                                                
CHAIR  ROKEBERG  explained that  the  bill  has a  schedule  that                                                               
reflects a 5 percent increase, and  on July 1, 2005, the salaries                                                               
raise automatically [an additional] 2 percent.                                                                                  
                                                                                                                                
MS. VARNI commented that if  this bill was passed the legislators                                                               
would probably be down to a Range 6 or 7.                                                                                       
                                                                                                                                
9:40:57 AM                                                                                                                    
                                                                                                                                
CHAIR ROKEBERG asked if legislators were Range 10A before 1991.                                                                 
                                                                                                                                
MS. VARNI  replied yes, although  back in the  1980s, legislators                                                               
[received an  annual salary  of around $46,800  and there  was no                                                               
per diem].                                                                                                                      
                                                                                                                                
CHAIR  ROKEBERG remarked  that there  is  public outcry  whenever                                                               
there is mention of a raise for the legislators.                                                                                
                                                                                                                                
9:42:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCGUIRE stated  that the  people in  her district                                                               
recognize  that  [legislators  are  low paid].    She  commented,                                                               
"There's always  a risk that  when you  take on issues  like this                                                               
that there  will be  some type  of backlash  from someone,  but I                                                               
think  it's an  education process  and I  think it's  something I                                                               
personally am willing to take on."                                                                                              
                                                                                                                                
9:43:49 AM                                                                                                                    
                                                                                                                                
MS. VARNI stated,  "Alaska is so unique from  other states; there                                                               
are not  other legislatures that  move their  legislators because                                                               
... the  states are so small  that they can drive  home at night.                                                               
... The salary  that is set right now for  legislators is so low,                                                               
considering the unique circumstances that you have...."                                                                         
                                                                                                                                
9:45:03 AM                                                                                                                    
                                                                                                                                
CHAIR ROKEBERG  inquired as to why  changes were made in  1991 so                                                               
that legislators were no longer Range 10A.                                                                                      
                                                                                                                                
MS. VARNI  related her understanding  that the changes  were made                                                               
because  the  legislature  wanted  to  cut  the  budgets  of  the                                                               
executive  branch and  the judicial  branch, and  the legislature                                                               
wanted to show that it was cutting its own budget as well.                                                                      
                                                                                                                                
CHAIR ROKEBERG calculated that a  readoption of the Range 10A for                                                               
legislators  would result  in a  $4,500 [or  more] annual  salary                                                               
increase.   He  remarked  that the  issue then  would  be if  the                                                               
legislators could  handle "the heat"  from the public  for giving                                                               
themselves a raise, and whether it would be worth pursuing.                                                                     
                                                                                                                                
9:46:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCGUIRE  asked  if  Chair Rokeberg  was  open  to                                                               
discussion with regard  to other ranges.  She  stated, "If you're                                                               
going to take the heat, you might  as well take it once and do it                                                               
the  right way.   And  I think  there ought  to be  some analysis                                                               
about what range we think the  work that we do here is associated                                                               
with."                                                                                                                          
                                                                                                                                
CHAIR ROKEBERG replied that he was open to this discussion.                                                                     
                                                                                                                                
9:47:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL stated:                                                                                                  
                                                                                                                                
     The  issue to  me in  this  bill is  the equity  within                                                                    
     state workers and  the marketability of our  jobs.  But                                                                    
     that's not the issue with  the legislature; ... I think                                                                    
     that's  a little  different discussion,  so  the way  I                                                                    
     would look  at it is:   "What's reasonable compensation                                                                    
     for living expenses for me?"  because I still see us as                                                                    
     a citizen legislature.  ... I wouldn't want  to look at                                                                    
     it  as   a  career  step   so  much  as   a  reasonable                                                                    
     compensation.                                                                                                              
                                                                                                                                
CHAIR ROKEBERG reiterated that there  have been no adjustments to                                                               
[legislators' salaries] for 14 years,  and therefore he thinks it                                                               
warrants examination.                                                                                                           
                                                                                                                                
[HB 98 was held over.]                                                                                                          

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