Legislature(2017 - 2018)SENATE FINANCE 532
02/09/2017 09:00 AM Senate FINANCE
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| Presentation: Department of Administration - Labor Contracts | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
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SENATE FINANCE COMMITTEE
February 9, 2017
9:01 a.m.
9:01:06 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Mike Dunleavy
Senator Peter Micciche
Senator Donny Olson
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Sheldon Fisher, Commissioner, Department of Administration;
Emily Wright, Deputy Director, Labor Relations, Department
of Administration; Nancy Sutch, Deputy Director, Personnel,
Department of Administration; Pat Pitney, Director, Office
of Management and Budget, Office of the Governor.
PRESENT VIA TELECONFERENCE
SUMMARY
PRESENTATION: DEPARTMENT OF ADMINISTRATION - LABOR
CONTRACTS
Co-Chair MacKinnon
^PRESENTATION: DEPARTMENT OF ADMINISTRATION - LABOR
CONTRACTS
9:01:50 AM
SHELDON FISHER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION,
discussed the presentation, "Alaska Department of
Administration - 2017 Labor Contracts" (copy on file). He
showed Slide 2, "Framework":
BACKGROUND: The scope and framework of negotiations
are governed by the Public Employment Relations Act
(PERA) AS 23.40.070-23.40.250.
· The State begins bargaining successor agreements
between October and December; start date may be
accelerated if both parties agree.
· Wages, hours and other terms and conditions of
employment are mandatory subjects of bargaining.
· The State may, but is not required to, negotiate
permissive subjects of bargaining.
· Monetary terms must be approved by the
Legislature.
STATUS QUO: If either side finds the demands too
unfavorable, they can largely maintain status quo by
doing nothing.
Once impasse is reached and mediation fails:
· employees have the right to strike (exception:
protective service personnel do not have the
right to strike but must enter binding
arbitration)
· State has the right to implement last best offer
(Both options are harmful to labor-management
relationship as well as the public)
INCREMENTAL CHANGE: As a result, you tend to see
pattern bargaining and incremental changes
Commissioner Fisher pointed out to the committee that
successful labor negotiations were reliant on both sides
coming to an agreement; should both sides fail to come to
an agreement there were mechanisms, such as arbitration, to
facilitate and agreement. He stated that the state had a
history of trying to reach agreements with bargaining units
through negotiations. He shared that it could take a series
of negotiations to effectuate meaningful change.
9:04:27 AM
Commissioner Fisher turned to Slide 3, "Bargaining Unit
(Mr. Burnett) Detail," which showed a table containing the
11 bargaining units in the state. He said that the state
was currently negotiating with the Alaska Marine Highway
units, Alaska State Troopers, the Teachers' Education
Association of Mt. Edgecumbe, and the Alaska Vocational
Technical Center Teachers. He relayed that there were four
principal units that contained most of the state's
employees: Alaska State Employees Association (ASEA),
Alaska Public Employees Association (APEA), Public
Employees - Local 71 (LTC), and Confidential Employees
Association (CEA).
9:05:47 AM
Senator Dunleavy asked whether the 'Non-Covered' -
Partially Exempt and Excluded group shown on slide 3 was
being identified for reductions.
Commissioner Fisher replied that the state tried to treat
covered and non-covered employees consistently. He said
that the bills that the governor had submitted this session
would allow for a freeze in the salaries of non-covered
employees. He added that the governor had instructed that
similar terms be negotiated for each of the bargaining
units.
9:07:13 AM
Co-Chair MacKinnon asked whether the state was trying to
negotiate the same pay freeze for all bargaining units.
Commissioner Fisher answered in the affirmative.
Co-Chair MacKinnon wondered whether all bargaining units
could be brought to the table to halt wage increases in
order to address an increase in the recession.
Commissioner Fisher stated that the state did not have
reopeners in bargaining contracts. He said that the state
could approach bargaining units with the request that they
make concessions. He did not think that concessions could
be made outside of the bargaining of the overall contracts.
9:09:37 AM
Co-Chair Hoffman felt that the possibility of disagreement
between bargaining parties was problematic. He thought that
the actions taken by the Alaska Court System in regards to
budget cuts should be a model for the administrative branch
to follow. He believed that the senate was taking a similar
approach of making significant cuts to spending. He
asserted that the state could not "cut itself" out of the
fiscal crisis, but that a stronger stance needed to be
taken to address fiscal responsibilities. He said that it
was not a foregone conclusion that the deficit would be
addressed, but he hoped that the administrative branch
would take on a similar strategy as that of the executive
branch.
9:13:32 AM
Senator Olson applauded the efforts by the judicial branch
to make meaningful cuts. He wondered whether the cuts to
that branch involved non-exempt employees.
Commissioner Fisher thought that most of cuts to the
judicial branch were made to employees that were not
covered by a collective bargaining agreement. He understood
that the state was facing a fiscal crisis. He stated that
the state would pursue additional concessions from the
bargaining units that were in contract.
9:14:51 AM
Senator Micciche noted that the legislature did not
negotiate with bargaining units. He wondered whether the
union employees would rather see individual members
disappear from the roles of employment, or "collectively
take a bit of a haircut on preserving those positions." He
stated that the state had a problem and that every job that
was necessary to run the government should be preserved. He
hoped that the cuts could be fairly distributed.
9:16:54 AM
Senator Dunleavy concurred with Senator Micciche's remarks.
He suggested that the commissioner review the remarks of
the Chief Justice from the previous day. He lamented that
the administration seemed unwilling to continue to make
deeper cuts. He hoped that the size of government could be
further reduced and reorganized.
9:18:37 AM
Commissioner Fisher discussed the question of layoffs
versus salary cuts. He stressed that he was not trying to
exercise judgement on the matter. He conveyed that
bargaining units had communicated a value judgement that it
would be preferable to see layoffs as opposed to wage
reductions. He conveyed that it was the intention of the
state in each negotiation to negotiate similar terms for
those who are covered and those who are not. He discussed
the nature of successive 3-year cycles of bargaining, and
noted that some units may experience a different set of
terms than others.
9:20:39 AM
Co-Chair MacKinnon asked whether adopting arbitrator
guidelines had been considered. She wondered whether most
of the state contracts contained a requirement to mediate
through arbitration and accept the mediators ruling.
Commissioner Fisher responded that certain contracts had
binding arbitration, and others left the choice to the
parties. He said that the bargaining unit's right to strike
was typically a determining factor. He used the example of
the Alaska State Troopers, which did not have the right to
strike, could use binding arbitration as the alternative.
He said that arbitration was always an option. He said that
he welcomed the conversation with the legislature
concerning arbitrator guidelines.
9:23:23 AM
Co-Chair MacKinnon relayed that some in her community had
asked why the state negotiated with unions, which had
national professional negotiators. She wondered whether the
administrative team had the advantage to bargain higher
because they would directly benefit from the negotiations.
Commissioner Fisher discussed the question of the
competency of the Department of Administration (DOA)
negotiators as compared to union negotiators. He felt
confident that the DOA negotiators were skilled and not
outmatched. He expressed that the DOA team had greater
consistency in staff retention and experience. He
acknowledged that to some extent, individuals were
negotiating a set of terms that would also impact them
directly. He opined that professional negotiators tended to
be lawyers and were very costly to hire.
9:26:55 AM
Co-Chair MacKinnon shared the suggestion of a "blue ribbon
panel" that was supported by a lawyer who could train and
provide expertise. She thought that a third party group
that was on a more volunteer, or board basis, could be
effective.
Co-Chair MacKinnon recognized that the commissioner and his
team always acted in good faith. She noted that they were
still in negotiations with some of the bargaining units
that had been previously outlined. She stressed that she
had not been in conversations with the administration
concerning the bargaining units. She explained the nature
of wage increases for state employees and the different
ways in which employee excellence was rewarded. She
stressed that all Alaskans should work together to combat
the budget deficit.
9:30:19 AM
Commissioner Fisher discussed Slide 4, "Long Term
Objectives":
Alaska State government will be a model of efficiency
and effectiveness, characterized by:
High performing workforce rewarded for best results
Compensation and benefit programs which are balanced
and rational
Work rules which are efficient and streamlined
Commissioner Fisher noted that the slide reflected
principles that guided the DOA workforce. He felt that the
top performers in an organization made the most impact, but
that the state did not have a strong culture of performance
management. He said that the department was in the process
of developing better capabilities that would eventually
form the foundation for other available initiatives. He
furthered that there were two features to the state's
current compensation and benefit programs that fell under
scrutiny: automatic step increases and the growth of
salaries over the life of an employee, and generous
benefits packages. He said when considering the employees
as a whole, cash compensation was slightly below market and
benefits were above market - balancing each other out. He
shared that steps had been taken such as eliminating cost
for living increases and instigating furloughs, as well as
freezing step salaries. He relayed that steps had also been
taken to reduce benefits packages. He noted that the tier 4
benefit package for state employees was significantly less
than for tiers 1 through 3, and employees were being
required to contribute more to their healthcare. He thought
that better benchmarks and metrics needed to be established
in order to inform future conversations about employee
compensation and benefits.
9:34:05 AM
Senator Micciche asked how often market conditions were
evaluated for the purpose of benchmarking compensation.
Commissioner Fisher relayed that evaluation of market
conditions had happened every year since he had been with
the state. He said that many different employers were
taking significant steps that impacted Alaskans. He hoped
that the efforts that the department was making in their
salary management costs would be recognized.
9:36:34 AM
Senator Micciche felt that the current fiscal situation of
the state was unprecedented. He asked whether the
department had brought new and innovative thinking to
contract negotiations.
Commissioner Fisher sensed a dearth of satisfaction from
the committee regarding the lack of progress that had been
made by DOA in making reductions. He rebutted that the
department had worked to be innovative and to shirk the
status quo. He noted the end of awarding a cost of living
increase to employees and increases to healthcare costs. He
said that the department had been focused on flattening the
growth curve of salary costs by implementing a hiring
freeze. He shared that redefining the growth curve would be
beneficial. He thought that performance management and
performance reviews would be an important tool for creating
cultural change within the state departments. He assured
that committee that the aspirations of the department were
beyond the status quo.
9:40:09 AM
Senator Micciche asked whether there were triggers that
were every negotiated into a labor contract, in which
concessions were in place for the immediate with the intent
to reinstate rewards in the more financially stable future.
Commissioner Fisher stated that it was possible to put such
mechanisms in to contract, but thought that the unions had
been wary of such agreements. He said that the state had
worked to put a timeline on certain mechanisms; for
example, the pay freezes put forth by the governor had a
two year timeline. He stated that a timeline allowed for
the issue to be revisited, and adjusted to suit the
realities if the time.
9:42:33 AM
Co-Chair Hoffman felt that short-term objectives were in
order. He stressed that the state should be focused on not
doing "business as usual." He spoke of belt tightening and
the need for short-term objectives. He applauded the court
system for making meaningful reductions. He felt that the
governor's proposed budget did not reflect the financial
crisis that the state was currently experiencing.
9:45:58 AM
Co-Chair MacKinnon acknowledged Pat Pitney, Director,
Office of Management and Budget, Office of the Governor, in
the room.
Vice-Chair Bishop spoke to the commissioner's previous
statement that the committee seemed dissatisfied with the
department's approach to reigning in spending. He asked not
to be included in that comment until the presentation was
complete.
Senator Dunleavy opined that the governor's supplemental
budget, in addition to his proposed operating budget,
actually increased spending. He felt as if the senate and
the governor were working at cross purposes.
9:47:07 AM
Senator Micciche asked whether there were other cost-
control measures available to the state outside of the
bargaining units and layoffs.
Commissioner Fisher discussed the concept of "increasing
the vacancy factor," which entailed holding a position open
after a state employee retired or left the position. He
mentioned that another tool was to discontinue certain
programs.
Commissioner Fisher further discussed layoffs. He said that
over the next five years over 20 percent of state employees
would be eligible for retirement. He said that at any given
time roughly two-thirds of those who were eligible retired.
He stated that he believed the issue was one of attrition,
and not layoffs. He felt that the size of government could
be controlled through attrition of senior employees. He
added that individual experiences would vary, he suggested
that people be prepared to cultivate the skills that a
reorganized state department would require.
9:50:04 AM
Co-Chair MacKinnon stated that the other body was examining
programs, rather than individual attrition. She understood
that the loss of a job, wages and health benefits, could be
a crisis for families. She understood that 10 percent of
Alaskan's benefitted from the Alaska Marine Highway System
(AMHS), which was costing the state $120 million per year.
She added that in past years the cost of running the system
was equal to the cost of all of the roads that benefitted
90 percent of the population. She spoke of the governor's
proposed privatization of 500 Department of Transportation
and Public Facilities design team employees. She thought
that the move would increase cost, and worried that there
would not be enough management. She believed that most
communities that used the AMHS could find alternative
transportation. She said that private sector jobs would be
available for ferry workers to migrate to. She said that
she valued the AMHS employees, and that the negotiation
team for AMHS had served their membership well. She
wondered how many out-of-state employees were with the
AMHS, and why the AMHS had a cost of living differential
(COLD), rather than a cost of living adjustment (COLA). She
queried whether flying in employees was creating additional
cost to the state. She lamented that AMHS work rules had
improved safety for the workers, but had negatively
affected the state's bottom line.
9:55:50 AM
Commissioner Fisher relayed that there were three unions
that supported AMHS.
Co-Chair MacKinnon directed committee attention to Slides
15, 17 and 18, which contained relevant information about
the AMHS bargaining units.
Commissioner Fisher referred to Slide 15, "Bargaining Unit
Summary," which showed information pertaining to the
Inlandboatmen's Union of the Pacific (IBU) bargaining unit.
He shared that 92 percent of the bargaining unit were
Alaskan residents.
Commissioner Fisher referred to Slide 17, "Bargaining Unit
Summary," which showed details about the Marine Engineers'
Beneficial Association. He relayed that 66 percent of the
employees covered by the unit reside in Alaska.
Commissioner Fisher referred to slide 18, "Bargaining Unit
Summary," which showed details for the Masters, Mates, and
Pilots (MMP) bargaining unit; 72 percent of their employees
reside in Alaska.
Co-Chair Hoffman asked how the department defined "Alaskan
resident."
EMILY WRIGHT, DEPUTY DIRECTOR, LABOR RELATIONS, DEPARTMENT
OF ADMINISTRATION, explained that the bargaining unit
numbers were based on the COLD data. She said that in order
for an employee to receive the benefit they must reside in
state. She added that DOT monitored the residents and that
residency was not tied to the permanent fund dividend
application.
9:58:04 AM
Senator von Imhof spoke to Slide 4, and asked about short-
term options. She queried rewards and seniority among high-
performing employees. She worried about holding critical
jobs vacant as a method of managed attrition. She probed
any and all of the methods the department had used to
reduce overhead costs. She thought that the state could
learn some creative cost cutting measures by studying the
private sector.
Commissioner Fisher responded to Co-Chair MacKinnon's
reference to flying AMHS team members to certain ports. He
conveyed that normally, a member had the obligation to get
to the duty station on their own dime. He shared that
mitigating circumstances could require the state paying for
transportation, but that those instances were rare.
Commissioner Fisher stated that seniority was a sacred
union principle. He relayed that due to the current fiscal
situation nothing had been done to reward high-performing
employees. He stated that the state was working to improve
performance management tools, which would address low-
performing employees. He said that many of the programs
that the department administered were in statute and could
not be eliminated without the work of the legislature. He
shared that overtime had gone down 10 percent between 2015
and 2016. He related that the IBU had reduced 60 positions
in the past year, and overtime by $34,000. He stressed that
overtime had been reduced in every bargaining unit and that
vacancy factors had been expanded.
10:03:42 AM
Co-Chair MacKinnon acknowledged that Commissioner Fisher
was in a difficult position. She wondered about the
repercussions for rejecting a union contract.
Commissioner Fisher replied that as part of the rejection
process the legislature would give the department
guidelines for dealing with unions. He said that
negotiations would continue until an acceptable contract
was agreed upon.
Co-Chair MacKinnon understood that rejected contracts would
not be included in the operating budget, and that the
legislature would provide reason for not accepting the
union contract.
Commissioner Fisher believed that that was correct.
Co-Chair MacKinnon asked how late in the legislative
session that the contracts would be available for
consideration.
Commissioner Fisher stated that there was a tension between
the demands that were made, and the speed at which a
negotiated agreement could be met. He said that if a
contract was completed and brought to the legislature by
the 60th legislative day then the legislature was obligated
to consider the contract. He furthered that if the
negotiations went beyond the 60th day, the legislature did
not have that obligation. He thought that due to some of
the changes that were being offered by the state in the
negotiations, the 60 day target would be more difficult to
achieve.
10:06:29 AM
Co-Chair MacKinnon hoped to have future conversations
regarding union strikes.
10:06:52 AM
Commissioner Fisher reviewed Slide 5, "Summary of
Bargaining", which showed the contracts that had been
negotiated in the last round of negotiations. He said that
the department viewed furloughs as a small part of an
overall set of short-term tools that could be used to
address budget issues. He said that furloughs allowed for a
cut across a department to affect many groups in modest
ways. He lamented that furloughs did not maximize the
savings that could be achieved because benefits were still
being paid, as well as other costs associated with the
employee.
10:09:02 AM
Co-Chair MacKinnon asked about the comparison of state
employee wages to federal employee wages. She opined that
the federal government could offer higher wages. She
wondered about health benefits, and whether they were a
bargaining piece for the state.
Commissioner Fisher stated the generally speaking, the
state provided the required health care for its employees.
There were four bargaining units that had their own health
trust: troopers, ASEA, Labor Trades and Crafts, and MMP. He
shared that healthcare costs were growing at a rate faster
than inflation, and the in the previous healthcare costs
had grown by 9 percent. He stipulated that the
administration focused on four levers to address the issue:
plan design (increased copay, out of pocket maximum, and
changing coverage levels for different services),
negotiating better rates with providers, asking employees
to contribute more, and requiring employers to contribute
more. He furthered that the department worked under the
principal of not over or under funding; different employer
groups had different costs due to demographics and work
conditions. He said that the plans were inspected for
effectiveness.
10:13:17 AM
Commissioner Fisher asserted that the department was clear
in its negotiations that terms would not be established for
a contribution without sufficient details surrounding
benefit plans.
10:16:02 AM
Co-Chair MacKinnon queried that number of state employees
with lower priced plans than the state plan.
Commissioner Fisher offered to come back with more
information at a later date, but thought that a number of
the health plans had lower costs and that there were
thousands of employees covered by trusts that had a better
cost structure. He qualified that the largest difference
was demographics, that there was a demographic difference
in their population mix that resulted in lower cost. He did
not believe that the lower cost was a reflection of better
or worse management.
10:17:09 AM
Co-Chair MacKinnon extrapolated that the state paid, inside
of each plan, a specific dollar amount based on the health
of the plan versus what was paid to the state plan.
Commissioner Fisher replied that this had been the case for
the previous two years.
Co-Chair MacKinnon asked whether Commissioner Fisher chose
that path because it saved the state money.
Commissioner Fisher answered in the affirmative.
Co-Chair MacKinnon wondered whether the state would benefit
from pooling healthcare costs.
Commissioner Fisher spoke to pooling healthcare costs. He
relayed that the senate had requested that the department
perform a study on the healthcare authority, and the
department was revisiting the question about the benefit of
pooling and the possible related savings. He shared that
the study was due in June 2017. He said that the state
worked to negotiate a fixed amount based on the framework
discussed on Slide 2; for example, the ASEA had a fixed
amount and had been flat for the past six years. He added
that that amount had been lower than what the state
contributed for employees. He said that the department
looked at employees and their experience when determining
the fixed amount.
10:20:31 AM
Co-Chair MacKinnon noted that the strategy had saved the
state money. She queried previously mention requirements
that the commissioner had mentioned.
Commissioner Fisher believed that the state was required by
statute to provide healthcare benefits.
Ms. Wright concurred.
Co-Chair MacKinnon surmised that if the statutes were
changed, healthcare benefits would not be bargained by the
administration.
Commissioner Fisher stated that the state had elected to
negotiate a portion of the health benefits. He elaborated
that the state had two plans, a standard plan that had a
richer benefit, and the economy plan that had a lesser
benefit. He relayed that the decision had been made, prior
to his leadership, that the state would bargain the economy
plan and never the standard plan. He thought that progress
had been made in the areas of plan design and employee
contribution.
10:22:06 AM
Commissioner Fisher restated that the state had never
bargained the standard plan.
Co-Chair Hoffman restated Co-Chair MacKinnon's question
about a possible change in the statutory requirement to
provide insurance.
Commissioner Fisher replied that if the state wanted to
stop bargaining a plan, once it had already been bargained
for in the past, it would need to be bargained out of the
contract. He explained that the statutory change alone
would not eliminate the states obligation.
Co-Chair Hoffman thought that if the statute was changed,
future negotiations would change.
Commissioner Fisher replied that that state could bargain
the economy plan out of contracts anytime it chose to do
so. He stated that the economy plan was not a mandatory
subject of bargaining, but was one that the state had
chosen to bargain. He furthered that if the statue changed,
the state would no longer have an obligation to provide
healthcare, and it would be up to Alaskans collectively to
decide whether healthcare was a benefit that was critical
for state employees.
10:23:46 AM
Co-Chair Hoffman noted that healthcare was one of the
largest cost drivers in the state. He queried the last
time, and the reason, that a serious strike had happened in
the state.
Ms. Wright did not believe that there had ever been a
strike in the state.
NANCY SUTCH, DEPUTY DIRECTOR, PERSONNEL, DEPARTMENT OF
ADMINISTRATION, revealed that in the 1907s the AMHS had
gone on strike over leave accrual. She offered to get back
to the committee with more information.
Co-Chair MacKinnon commented that the amount of leave
accrual allowed had been examined, and changed, by the
committee several years ago. She believed that the amount
allowed was still high when compared to the private sector.
She asked whether the assumption that having a thousand
hours in the leave bank could be, for an employee, like
receiving a three percent raise once cashed-in, was
accurate.
10:26:54 AM
Commissioner Fisher stated that caps on leave accrual had
been negotiated in contracts. He admitted that the state
tended to have a more generous leave accrual benefit than
the private sector. He stated that leave accrual had
peaked, and the rate of growth had slowed. He explained
that in 2016, the leave accrual obligation had declined,
but was still at approximately $172 million. He furthered
that leave accrual was paid out at the "then current" rate;
if leave was accrued at a lower rate, as an employee
advanced in their career and chased out leave, the leave
could be cashed out at a higher rate.
Co-Chair MacKinnon concluded that it was accurate that if
people held large amounts of leave, those hours could be
paid out at a higher rate than the rate at which they were
earned.
10:28:49 AM
Commissioner Fisher showed Slide 6, "Sample Historical
COLAs & Anchorage CPI Comparison," which showed a data
table that provided information about cost of living
allowances as compared to the consumer price index (CPI),
over time. He noted the close alignment between CPI and
COLA over time, a few bargaining units were higher.
Co-Chair MacKinnon asked whether there would be an
advantage to providing a lump sum, versus COLA, in the form
of a salary increase. She wondered whether negotiating with
union leadership to pay a fixed sum instead of increasing
wages could be beneficial in making an employee feel
appreciated without adding to the states expense.
Commissioner Fisher agreed that the advantage of offering a
lump sum was that it would not impact an employee's salary;
if an employee made $10,000 per year, and received at $1000
lump sum, the following year the employee would still make
$10,000, whereas a $1000 increase would raise the salary to
$11,000 per year. He said that COLAs were not currently
being negotiated, but when the time came to do so, a lump
sum would be considered.
10:30:55 AM
Co-Chair MacKinnon asserted that there were still employees
that were receiving salary increases.
Commissioner Fisher stated that the observed salary
increases were due to contracts that had already been
negotiated.
Co-Chair MacKinnon asked whether there was a way to reopen
the contracts and have a conversation about a fixed rate.
Commissioner Fisher replied that an attempt had not been
made to have that conversation with negotiators, but that
he would look into the matter.
10:31:59 AM
Senator Micciche thought that it was important to recognize
the union groups that had not increased their COLA
percentage since 2015. He wondered about the Anchorage CPI
as a reference point for all bargaining groups.
Commissioner Fisher clarified that the Anchorage CPI was
used for comparison because it was the only CPI that was
produced by the Federal Department of Labor, an Alaska-wide
CPI was unavailable. He agreed that COLAs had been at, or
modestly below, the CPI increase, but added that when the
automatic salary increases were layered in there was a
wider growth above the CPI.
10:33:56 AM
Vice-Chair Bishop asked whether Commissioner Fisher had
anecdotal information on state employees transferring out
of state service and moving to other states.
Commissioner Fisher replied that some information could be
provided on the "churn rate" or degree to which employees
were leaving state service. He clarified whether the
question was about people who left state employment to work
in another state, or left state employment in general.
Vice-Chair Bishop requested the churn rate as a whole. He
expressed support for keeping out-to-bid contract jobs
within the state.
10:36:07 AM
Co-Chair MacKinnon recognized that the nature of the issue
made the conversation difficult to have, and added that the
committee valued the employees of the State of Alaska. She
lamented that the state's fiscal crisis made the
conversation necessary. She hoped that the administration
and the legislature could work together on reducing the
budget and while maintaining the public trust. He stressed
that both exempt and non-exempt employees were important.
She recognized that all state employees spent money in the
state economy, and that there would be ramifications to the
economy as the result of budget cuts. She offered the
example of her aforementioned disparity between the AMHS
and the state's road system. She clarified that she
recognized that the Southeast Alaskan community would be
disproportionately disadvantaged if there were major
employee cuts in the AMHS. She asserted that cuts to the
AMHS would not be meant as an attack on the system, but
rather a prioritization of investments.
10:38:32 AM
Co-Chair Hoffman interjected that the senate was trying to
take measures that would allow for the state to make
payroll. He opined that if corrective actions were not
taken then state employees would not be paid. He lamented
that a comprehensive fiscal plan had yet to be determined
by a fractured legislature, and the administration.
10:40:03 AM
Commissioner Fisher turned to Slide 7, "Merit Steps and Pay
Increments":
o The Governor has directed our teams to seek a
freeze in merit steps and pay increments in
conjunction with SB31 and HB71.
o Troopers receive merit steps and pay increments.
o The Marine Unions do not receive merit steps and
pay increments. Historically the sole mechanism
for pay increases has been COLAs.
o Mt. Edgecumbe and the Alaska Vocational School
teachers are placed on the salary scheduled based
on years of service and education level; they are
capped at 10 years and 18 years respectively.
10:40:58 AM
Commissioner Fisher displayed Slide 8, "Benefits":
Benefits are an integral part of employees' total
compensation package.
o Health Benefits:
ƒEmployee premium contribution.
ƒImplemented an employee premium for
partially exempt and exempt in the
executive, legislative, and judicial
branches; currently bargained and
implemented for Confidential Employee
Association and Supervisory Unit in January
2017. This premium will increase in 2018.
ƒImplemented cost savings measures and plan
improvements.
o Health Trusts
ƒWe are contributing at a rate which seeks to
neither over nor underfund.
o Pension: Defined benefit and defined contribution
plans.
Commissioner Fisher concluded his remarks on the
presentation.
10:41:27 AM
Co-Chair Hoffman stated that state employees received the
Alaska Supplemental Annuity Plan (SBS) instead of Social
Security, which was capped at a different rate. He asked
whether SBS was capped.
Commissioner Fisher answered in the affirmative.
10:41:55 AM
Co-Chair MacKinnon hoped that all parties could work
together to address the fiscal crisis faced by the state.
She discussed housekeeping.
ADJOURNMENT
10:43:39 AM
The meeting was adjourned at 10:43 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 020917 DOA Labor Contracts Presentation S FIN 2.9.17 FINAL.pdf |
SFIN 2/9/2017 9:00:00 AM |
Operating Budget FY18 |