Legislature(2021 - 2022)ADAMS 519

04/29/2022 09:00 AM House FINANCE

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Heard & Held
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                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 29, 2022                                                                                            
                         9:03 a.m.                                                                                              
9:03:32 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Merrick called the House Finance Committee meeting                                                                     
to order at 9:03 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson (via teleconference)                                                                              
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Sara Rasmussen                                                                                                   
Representative Steve Thompson                                                                                                   
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
ALSO PRESENT                                                                                                                  
Shelly   Willhoite,   Chief   Budget  Analyst,   Office   of                                                                    
Management and Budget, Office of  the Governor; Elise Sorum-                                                                    
Birk, Staff,  Representative Andy  Josephson; Representative                                                                    
Matt Claman, Sponsor.                                                                                                           
PRESENT VIA TELECONFERENCE                                                                                                    
HB 226    PAY INCREASES FOR STATE ATTORNEYS                                                                                     
          HB 226 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HB 416    BONUSES FOR NONUNION PUBLIC EMPLOYEES                                                                                 
          HB 416 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
Co-Chair Merrick reviewed the agenda for the meeting.                                                                           
HOUSE BILL NO. 226                                                                                                            
     "An Act relating to the  compensation of certain public                                                                    
     officials,  officers,  and  employees  not  covered  by                                                                    
     collective   bargaining   agreements;  increasing   the                                                                    
     salaries of  certain attorneys  employed by  the state;                                                                    
     and providing for an effective date."                                                                                      
9:04:07 AM                                                                                                                    
REPRESENTATIVE  ANDY JOSEPHSON,  SPONSOR, presented  HB 226.                                                                    
The  bill had  a  direct  focus on  increasing  the pay  for                                                                    
attorneys within  the State of Alaska  to improve retention.                                                                    
He had once worked for  the Public Defender's Office and had                                                                    
personally  witnessed  significant   disparity  in  pay  for                                                                    
attorneys. Further aggravating this  difficulty was the fact                                                                    
that  state   lawyers  fell   into  the   classification  of                                                                    
"partially exempt"  employees, meaning  they did  not belong                                                                    
to  a union  and could  only  receive pay  increases at  the                                                                    
behest of the legislature. A  pay increase for this employee                                                                    
class had not  taken place since 2015.  The beginning salary                                                                    
for an  Attorney 1 in  Alaska was $62,000, but  the starting                                                                    
salary for  an entry-level  municipal attorney  in Anchorage                                                                    
was $85,000. The bill would  increase salaries by 10 percent                                                                    
and change the starting salary  to $68,000. The increase was                                                                    
statutorily  required in  Title  39. The  commentary on  the                                                                    
bill in the House State  Affairs Committee suggested that 10                                                                    
percent  remained   too  low.  He  reported   hearing  about                                                                    
retention  problems  in  the finance  subcommittee  for  the                                                                    
Department of  Law. To  help alleviate  the problem,  he and                                                                    
Representative  Matt   Claman  inserted  bonuses   into  the                                                                    
current budget, however this was not a permanent solution.                                                                      
Representative Josephson continued that  he learned from Ms.                                                                    
Cori Mills and Mr. John  Skidmore from the Department of Law                                                                    
(DOL) that there  were 15 vacant positions  and 18 positions                                                                    
in active  recruitment. In  FY 22,  the department  hired 22                                                                    
attorneys  and  17 attorneys  left  the  department. In  the                                                                    
criminal  division, there  were 22  attorney positions  open                                                                    
and  12   were  in  active  recruitment.   He  relayed  that                                                                    
attorneys were  leaving because  the pay  was poor,  and the                                                                    
work was challenging and often  disturbing. The attorneys in                                                                    
the Office of  Children's Services had a  high turnover rate                                                                    
and active  attorneys were often inexperienced.  Efforts had                                                                    
been made by  DOL to solve the issue  by recruiting students                                                                    
out of law  school and hiring people who had  not passed the                                                                    
bar  exam. There  was a  national  district attorney  salary                                                                    
study  that recommended  a wage  of $87,000,  and the  state                                                                    
only paid $62,000. Ms. Mills  stated that since 2018, 93 out                                                                    
of the  123 attorneys  in the Civil  Division had  left. Ms.                                                                    
Mills shared she  had one opening for 106  months without it                                                                    
being  filled.  He  explained  that  solving  the  retention                                                                    
problem related  to state attorneys involved  paying bonuses                                                                    
as well as increasing salaries.                                                                                                 
Representative Josephson read  a portion of a  letter he had                                                                    
received   from  an   attorney   within   DOL.  The   letter                                                                    
highlighted the  importance of  having skilled  attorneys in                                                                    
the state.  He relayed  that he had  also received  an email                                                                    
from a  public defender  in Montana  who shared  that entry-                                                                    
level attorneys earned $81,000 in Montana.                                                                                      
Co-Chair    Merrick    noted   Representative    Wool    and                                                                    
Representative Rasmussen had joined the meeting.                                                                                
9:18:02 AM                                                                                                                    
Vice-Chair  Ortiz asked  how long  it  took to  lose the  93                                                                    
attorneys mentioned by Representative Josephson.                                                                                
Representative   Josephson   responded   that   Cori   Mills                                                                    
testified that  93 attorneys out  of 143 attorneys  had left                                                                    
the Civil Division since 2018.                                                                                                  
9:18:54 AM                                                                                                                    
Representative  Thompson  wondered   if  the  attorneys  who                                                                    
worked for  Legislative Legal Services would  be affected by                                                                    
the bill.                                                                                                                       
Representative  Josephson indicated  they were  not included                                                                    
as they were paid  through the Legislative Affairs Division.                                                                    
He thought  that they  were overworked  and agreed  that was                                                                    
also a  problem. It  was a  larger issue  and the  bill only                                                                    
targeted one aspect of the problem.                                                                                             
Representative Thompson  understood and would look  into the                                                                    
9:20:14 AM                                                                                                                    
Representative  Edgmon  recalled  that the  legislature  was                                                                    
adding  an attorney  within Legislative  Legal Services  and                                                                    
was  including a  broad compensation  package. He  asked the                                                                    
bill   sponsor  to   provide  perspective   concerning  high                                                                    
turnover  rates  for  attorneys   in  the  criminal  justice                                                                    
system.  The  legislature  had  proposed  several  bills  to                                                                    
address  turnover and  he was  convinced  that the  turnover                                                                    
issue was  endemic. He  invited Representative  Josephson to                                                                    
Representative  Josephson  indicated he  and  Representative                                                                    
Claman agreed  with Representative Edgmon's  opinion. Entry-                                                                    
level  attorneys  in the  state  were  often sent  to  rural                                                                    
Alaska  within  their  first six  months  of  employment  to                                                                    
prosecute   serious   felonies.   In  bigger   cities   like                                                                    
Anchorage,  attorneys were  placed  into one  area of  focus                                                                    
such as  drugs or property.  Whereas, in the rural  areas of                                                                    
Alaska  they were  required to  handle all  types of  cases.                                                                    
When he  personally worked  as an  attorney in  Kotzebue, he                                                                    
had an  overwhelming workload  of over  800 cases  per year.                                                                    
New  attorneys would  simply  not stick  around  due to  the                                                                    
conditions in  rural Alaska, and  the state needed  both new                                                                    
attorneys  and  experienced   attorneys.  He  indicated  the                                                                    
committee would hear testimony in  an upcoming meeting about                                                                    
the emotional  difficulty experienced by attorneys  in these                                                                    
situations. The administration was  aware of the seriousness                                                                    
of  the  issue  and   watching  the  committee  hearing.  He                                                                    
reiterated  that  the  sentiment   expressed  in  the  State                                                                    
Affairs  Committee was  that a  ten percent  salary increase                                                                    
for attorneys was inadequate.                                                                                                   
9:25:25 AM                                                                                                                    
Representative Edgmon noted  that deputy commissioners often                                                                    
made   a  significantly   higher   wage   but  also   worked                                                                    
significanlty longer  hours. He  thought the workload  was a                                                                    
Representative Josephson  relayed that public  defenders and                                                                    
prosecutors had coalesced around  the legislation and wanted                                                                    
the system to  work. They cared about their  work and wanted                                                                    
to stick  around but could  not afford to under  the current                                                                    
9:27:06 AM                                                                                                                    
Representative Wool  commended the bill sponsor  for sharing                                                                    
the  information. He  remarked that  many other  professions                                                                    
were  facing the  same issues.  For example,  the state  was                                                                    
experiencing  difficulty retaining  teachers largely  due to                                                                    
issues with wages and benefits.                                                                                                 
Co-Chair  Merrick   thanked  Representative   Josephson  for                                                                    
presenting his  bill. The committee  would take  a 10-minute                                                                    
break to attend the Committee on Committees meeting.                                                                            
9:28:20 AM                                                                                                                    
AT EASE                                                                                                                         
9:43:40 AM                                                                                                                    
Vice-Chair Ortiz  asked Ms. Shelly Willhoite  to address the                                                                    
fiscal note.                                                                                                                    
SHELLY WILHOITE, CHIEF BUDGET  ANALYST, OFFICE OF MANAGEMENT                                                                    
AND  BUDGET, OFFICE  OF THE  GOVERNOR,  reviewed the  fiscal                                                                    
note by the Office of  the Governor with control code WEdhh.                                                                    
She relayed that the fiscal  note reflected the costs of the                                                                    
proposed 10 percent increase for  attorneys. The fiscal note                                                                    
amounted  to just  over  $8 million.  She  read through  the                                                                    
figures on the fiscal note.                                                                                                     
9:45:52 AM                                                                                                                    
Representative  LeBon  indicated  there  were  a  number  of                                                                    
vacancies that needed to be  filled. He asked if the figures                                                                    
for the 10  percent increase in the fiscal  note assumed all                                                                    
positions were filled.                                                                                                          
Ms.  Willhoite  responded  that  the  fiscal  note  did  not                                                                    
reflect vacancies.                                                                                                              
Representative  LeBon asked  for clarification  that the  10                                                                    
percent   increase  did   not  reflect   any  vacancies   in                                                                    
anticipation that  the increase might yield  more successful                                                                    
Ms.  Willhoite would  get back  to the  committee after  she                                                                    
checked with the analyst that ran the numbers.                                                                                  
9:47:17 AM                                                                                                                    
Representative  Josephson thought  it could  be argued  that                                                                    
the total  cost in  the fiscal note  would still  be similar                                                                    
even if vacancies were accounted for.                                                                                           
Ms. Willhoite responded that his  perspective was valid. She                                                                    
calculated a  flat 10 percent  based on the salaries  of the                                                                    
currently filled positions.                                                                                                     
Representative LeBon  asked the  bill sponsor if  the intent                                                                    
of the bill  was to increase the pay for  all positions both                                                                    
filled and unfiled.                                                                                                             
9:49:01 AM                                                                                                                    
ELISE  SORUM-BIRK,  STAFF,  REPRESENTATIVE  ANDY  JOSEPHSON,                                                                    
asked Representative LeBon to repeat his question.                                                                              
Representative LeBon  restated his  question. He  was trying                                                                    
to understand the fiscal note and  wanted to know if the sum                                                                    
reflected all  authorized positions. He thought  it would be                                                                    
counterproductive to  try to  fill vacant  positions without                                                                    
raising the salaries.                                                                                                           
Ms.  Sorum-Birk  responded  that  Representative  LeBon  was                                                                    
correct and  that the sum  reflected all  attorney positions                                                                    
in relevant agencies.                                                                                                           
9:50:12 AM                                                                                                                    
Ms. Willhoite noted that if  a position was budgeted for, it                                                                    
was included in the total.                                                                                                      
HB  226  was  HEARD  and   HELD  in  committee  for  further                                                                    
HOUSE BILL NO. 416                                                                                                            
     "An  Act  relating  to   the  compensation  of  certain                                                                    
     executive  branch employees  not covered  by collective                                                                    
     bargaining agreements;  and providing for  an effective                                                                    
9:50:54 AM                                                                                                                    
REPRESENTATIVE  MATT  CLAMAN,  SPONSOR, explained  that  the                                                                    
bill would  add a  new statute to  allow the  legislature to                                                                    
make   appropriations  for   retention  bonuses   for  state                                                                    
employees who  were not members  of a  collective bargaining                                                                    
unit. Based on  the advice he had  received from Legislative                                                                    
Legal Services, he understood that  it was necessary to pass                                                                    
temporary or  permanent legislation  to enable an  agency to                                                                    
properly compensate employees. He  thought the House Finance                                                                    
Committee was familiar with the issue.                                                                                          
9:52:52 AM                                                                                                                    
Representative Thompson  asked for a list  of employees that                                                                    
would be affected in the FY 23 budget.                                                                                          
Representative Claman  responded that  he would be  happy to                                                                    
get  the list  to  Representative Thompson.  He thought  the                                                                    
purpose of  the bill was  to approve the bonuses  already in                                                                    
the budget.                                                                                                                     
Representative  Wool  thought  that   some  of  the  bonuses                                                                    
included in  the budget  were for  the Office  of Children's                                                                    
Services  (OCS)  and  other unionized  state  employees.  He                                                                    
noted  that the  bill affected  non-union employees  and was                                                                    
curious  which  non-union  employees specifically  would  be                                                                    
9:54:02 AM                                                                                                                    
Representative  Josephson  clarified  that the  OCS  bonuses                                                                    
were provided by  the governor. The Senate's  version of the                                                                    
budget approved  classified bonuses and the  House's version                                                                    
did not. He noted that  the House Health and Social Services                                                                    
Committee added bonuses for nurses.                                                                                             
9:54:59 AM                                                                                                                    
SHELLY WILHOITE, CHIEF BUDGET  ANALYST, OFFICE OF MANAGEMENT                                                                    
AND BUDGET,  reviewed the fiscal  note by the Office  of the                                                                    
Governor  with control  code kygUp.  The fiscal  note had  a                                                                    
zero fiscal impact due to a lack of information.                                                                                
Co-Chair Merrick thanked Representative Claman for his                                                                          
presentation. She reviewed the agenda for the afternoon's                                                                       
HB 416 was HEARD and HELD in committee for further                                                                              
9:55:46 AM                                                                                                                    
The meeting was adjourned at 9:55 a.m.