Legislature(2013 - 2014)SENATE FINANCE 532
01/31/2014 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB125 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 125 | TELECONFERENCED | |
SENATE BILL NO. 125
"An Act disapproving all recommendations of the State
Officers Compensation Commission relating to the
salaries of state officers; and providing for an
effective date."
9:09:10 AM
CHRISTINE MARASIGAN, STAFF, SENATOR KEVIN MEYER, introduced
the legislation. She explained that the bill would reject
the recommendations from the Compensation Commission. She
explained that, according to statute, the Compensation
Commission provides a final report 10 days into the session
of any changes to salary. She stated that the
recommendations were on pages 2 and 3 of the report titled,
"Alaska State Officers Compensation Commission Findings and
Recommendations" (copy on file). Once the final
recommendations were made, the legislature had sixty days
to reject the recommendations. If the legislature does not
take action, the recommendations are enacted. She stated
that SB 125 rejects the commission's recommendations.
RICK HALFORD, CHAIR, ALASKA STATE OFFICERS COMPENSATION
COMMISSION (via teleconference), explained that the
recommendations focused on the executive branch salary
schedule. He explained that the most challenging part of
the commission was dealing with the legislative and
political side. He stated that the recommendations totaled
approximately $280,000. He stated that the changes were
mostly technical, and would move the commissioners,
governor, and lieutenant governor in line with where they
would be on the salary schedule. He stressed that the only
substantive action was the provision that dealt with deputy
commissioners moving up to commissioner, and with the
geographic pay differential. He stressed that the current
recommendation did not include the legislative branch.
Co-Chair Meyer queried the changes between the preliminary
versus the final reports. Mr. Halford responded that there
were a series of small changes over the course of many
years. He stated that the changes were intended to make the
system exactly what it would have been, if the executive
branch had been operating under the previous salary
structure.
9:14:23 AM
Co-Chair Meyer support the recommendation, and felt that
the commissioners and the governor earned the salaries that
were recommended. He felt that the timing of the
recommendation was not good, because of the current deficit
spending in the state. He queried the difference between
the preliminary report and the final report.
NANCY SUTCH, DIRECTOR, DIVISION OF PERSONNEL LABOR
RELATIONS, DEPARTMENT OF ADMINISTRATION, (DOA) stated that
the report was not delivered until that morning, because
the file was too large to send the day prior. She explained
that the reason for the salary increases for the deputy
commissioners, commissioners, governor, and lieutenant
governor was to catch up for what did not occur in 2010,
2011, and 2012. Other parties had seen a 2 percent wage
increase over those three years, so this recommendation
made the match.
Ms. Sutch discussed the recommendations of the commission.
The governor's salary shall be $150,872.79 per annum
effective July 1, 2014 with an additional increase of
2.5 percent effective July 1, 2015.
The lieutenant governor's salary shall be $119,657.73
per annum effective July 1, 2014 with an additional
increase of 2.5 percent effective July 1, 2015.
The salary of department heads shall be $146,142.67
per annum which includes the 1 percent increase
granted under sees. 11 and 20. eh. 47, SLA 2013
effective July 1 ,2014.
Department heads shall receive geographic pay
differentials conunensurate with other state employees
in accordance with AS 39.27.020.
The salary of a deputy commissioner who accepts the
office of department head with the same department
with no break in service, if paid a salary higher than
the salary authorized for the department head, shall
retain his or her current salary with subsequent
statutory increases, while holding the position of
department head.
Ms. Hutch explained that there was a flat amount for
commissioners' salaries, but the deputy commissioners were
on a range step system. Therefore, there were some deputy
commissioners that made more money than commissioners. When
some deputy commissioners were asked to advance to the
commissioner level position, they would be taking a pay
cut.
Co-Chair Meyer wondered if there was a problem with deputy
commissioners refusing to advance to commissioner because
of the decrease in pay. Ms. Hutch replied that it had
caused a problem for some people.
Senator Dunleavy wondered how the state compared to other
states in regard to volume and/or difficulty of work. Ms.
Hutch agreed to provide that information.
9:19:15 AM
Senator Dunleavy asked for an estimate of the comparison.
Mr. Hutch deferred to Mr. Halford.
Senator Dunleavy wondered how the state compared to other
states in regard to volume and/or difficulty of work. Mr.
Halford responded that Alaska fell in the middle. He
furthered that the different agencies were compared in
different ways. For example, the Department of Health and
Social Services (DHSS) was compared based on the population
of the state, whereas Department of Natural Resources (DNR)
was compared based on management responsibilities.
Vice-Chair Fairclough looked a page 4 of the
recommendations, and quoted, "thirteen of twenty-three
deputy commissioners were receiving higher salaries than
the department heads. In the salaries of seven of these
deputy commissioners exceed the commissioners proposed
salaries for department heads."
Co-Chair Meyer announced that the Commission members
included Rick Halford, Gordon Harrison, Thomas McGrath, and
Richard Knapp.
Senator Dunleavy surmised that the legislation would not
approve the increase, but others would continue to
progress. Co-Chair Meyer replied in the affirmative.
Vice-Chair Fairclough wondered if there was a consideration
regarding attracting professionalism and high quality in
state positions, because Alaska was in the middle of the 50
states for deputy commissioner and commissioner salaries.
Mr. Halford replied that there was a consideration, and
furthered that the comparison with other states had an
impact on the recommendation. He stressed that the
Commission focus on positions and responsibility, but not
on individuals. He stressed that there were people that
were serving in cabinet positions that had the best job
that they had ever had, and others in cabinet positions
that took a substantial economic increase in order to serve
the state. He stated that there was no way that a system
could close that differential. He stressed that any time
negotiations occurred, particularly with a resource area,
negotiations occurred with individuals who had very high
compensation and benefits. He stressed that the executives
of the state's resource corporation were extremely
underpaid.
9:26:14 AM
Vice-Chair Fairclough felt that there had been a loss of
some very talented people from the state system. She noted
that the fiscal note did not reflect what implementation
would cost by category. She remarked that rejection would
develop an inequity between commissioner and deputy
commissioner. She looked at the fiscal note, and queried
the cost of implementation by category. She expressed
concern regarding the inequity between a deputy
commissioner and a commissioner. Ms. Hutch looked at the
final page of the recommendation, and stated that the total
cost was $227,000. She agreed to provide the individual
costs at a later time.
Vice-Chair Fairclough shared that the governor had publicly
rejected that number. She specifically queried the
differential of the people that would be affected by the
deputy commissioners' higher salaries than commissioners.
She stated that the legislature was not asking union
contractors to take pay freezes. She understood that Alaska
was facing a budget deficit, but felt that the financial
pressure facing Alaska was a reason to employ the best
people.
Senator Olson agreed that Alaska should have individuals
that can negotiate with multi-national company executives.
He felt that the individuals who ran for public office were
not doing so for the salary; rather, they were running for
public office, because they felt that they could serve
Alaska and affect public policy. Mr. Halford agreed, but
felt that the system must be effective and equitable.
9:31:24 AM
Senator Olson looked at the compensation package, and
wondered if there were any individuals that had trouble
feeding their families. Mr. Halford replied that he knew of
some who did not want to advance in their field, because of
the economic impact.
Senator Olson queried the increase in benefits for
individuals in the executive branch. Ms. Hutch asked for
clarification.
Senator Olson wondered if there was a benefit value that
was greater than the salary. Ms. Hutch responded that the
commission only evaluated the salaries, not the benefits.
Co-Chair Kelly wondered if the commission discussed the
creation of a group that would have a higher salary than
other members of the administration. He stressed that there
should never be a loss of an important position because of
the salary. He remarked that the best and the brightest
individuals should be in the private sector.
9:37:02 AM
AT EASE
9:38:55 AM
RECONVENED
Co-Chair Kelly stressed that there were salary issues
throughout state government that needed to be addressed.
Co-Chair Meyer closed public testimony.
Co-Chair Meyer remarked that contracted experts were
frequently used for various issues. He felt that the
expertise did not need to be on the payroll year round.
Senator Bishop remarked that many state officers understood
that they would make less compensation than in the private
sector. He recalled a time in the 1980s when state
government workers took a pay freeze.
9:44:22 AM
Ms. Hutch remarked that she had additional information that
compared Alaska to other states and employers.
Senator Olson commented that the state was entering into
significant deficit spending in the near future. He felt
that there should not be a focus on pay increases during
this difficult time.
Vice-Chair Fairclough felt that it was inherently wrong
that a deputy commissioner receive greater compensation
than a commissioner. She wondered if there could be
separate recommendations in the future, so deputy
commissioners do not make more compensation than
commissioners. Mr. Halford replied that the total
recommendation was $227,000, which picked up the old
scales. He stated that it was symbolic, but the Commission
was politically sensitive. He pointed out that the size of
the recommendation was very small, but it may irritate
someone symbolically. He stated that there was no interest
from the public regarding the recommendation. He felt that
he did not know how to make a smaller recommendation.
9:50:26 AM
Co-Chair Kelly stated that he had some questions regarding
how the Commission functioned and some suggestions for the
future.
Senator Hoffman remarked that he has not made up his mind
on the issue. He stated that it was difficult to support
the recommendation when the governor publicly stated that
he would not take the pay increase.
Co-Chair Meyer noted that there was a zero fiscal note
attached to the bill.
Vice-Chair Fairclough MOVED to REPORT SB 125 out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SB 125 was REPORTED out of committee with a "do pass"
recommendation and with a new zero fiscal note by the
Department of Administration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB125 PreliminaryFindingsandRecommendations2014.pdf |
SFIN 1/31/2014 9:00:00 AM |
SB 125 |
| SB125 Sponsor Statement.pdf |
SFIN 1/31/2014 9:00:00 AM |
SB 125 |
| SB125-DOA-DOP-01-24-14.pdf |
SFIN 1/31/2014 9:00:00 AM |
SB 125 |
| SB 125 ASOCC Findings and Recommendations.pdf |
SFIN 1/31/2014 9:00:00 AM |
SB 125 |