HB 300-GEOGRAPHIC COLA FOR JUSTICES AND JUDGES  4:20:13 PM CHAIR OLSON announced that the final order of business would be HOUSE BILL NO. 300, "An Act relating to geographic cost-of- living salary adjustments for justices of the supreme court and judges of the superior and district courts; and providing for an effective date." 4:20:37 PM DOUG WOOLIVER, Deputy Administrative Director, Administrative Staff, Office of the Administrative Director, Alaska Court System, stated that this bill was introduced by the House Rules Committee at the request of the Alaska Supreme Court. This bill would update the geographic pay differentials that apply to judges' salaries to bring them in line with the same formulas that apply to other state employees. Under current law employees in the executive branch and those in the judicial branch who are not judges receive a geographic differential which is applied to their salary based on a formula that calculates a cost-of-living in various communities where they live. A geographic differential can vary from 6.3 percent in Sitka to 36.92 percent in Kotzebue, Barrow, and Nome. He pointed out two caps on the geographic differential that judges receive limits any increase to less than five percent of a geographic differential for a limit on the total of $7,000 on a Superior Court judge's salary. This does not offset actual costs of living in most rural communities. He compared the $7,000 to approximately $30,000 to $35,000 in geographic differential other state employees may receive. The legislature has recognized geographic differential as a means to compensate individuals living in rural Alaska who face staggering costs. He emphasized the point of a geographic differential is to adjust salaries statewide on an equal basis. He referred to a McDowell study that showed the cost of living was 60 percent higher in Kotzebue than in Anchorage. 4:23:07 PM MR. WOOLIVER pointed out that judges in Anchorage receive substantially more in salaries than judges receive in Kotzebue. The first geographic differential bill passed the legislature in 1966 and geographic differentials have existed since then. He characterized this bill as the right thing to do for employees and for judges. Rural judges should be treated adequately. He illustrated one problem in rural Alaska has been to attract sufficient applicants to serve, in particular, in communities such as Bethel. Currently, a Superior Court judge position is vacant. The Alaska Judicial Council did not receive enough names the first time it solicited applicants so it is starting over to find sufficient, qualified applicants. However, this issue is not just an issue for Bethel. In 2013, Ben Esch, who has served as Superior Court judge in Nome for 17 years will retire. He is the longest serving judge in Nome's history. In 2014, Mike Jeffrey will retire. He has been the longest serving Superior Court judge in our state's history. He stressed the importance of finding qualified committed applicants. He pointed out numerous hurdles exist to attract people to live in rural Alaska, and one barrier has been a lack of any realistic geographic differential since rural judges lose out compared to urban areas. The geographic differential does not apply to judicial retirement since a judge's retirement is based only on base salary. This bill is limited to geographic differential. 4:25:53 PM REPRESENTATIVE SADDLER asked whether it is problem to recruit or retain judges in rural Alaska. MR. WOOLIVER explained that it hasn't been a problem to retain judges but it has been difficult to attract them. He further explained that the most recent vacancy in Bethel, the Judicial Council did not receive enough applicants to send two names of qualified candidates to the governor. He was unsure if this bill has had an effect in attracting candidates, but the Judicial Council has received substantially more applicants during the second solicitation. 4:27:20 PM REPRESENTATIVE SADDLER understood the chronological cap, but he asked for the length of time a judge must serve to qualify for a state retirement. MR. WOOLIVER offered his belief that it takes five years to obtain vesting, but judges are fully vested at 15 years, and Alaska's Constitution does require retirement at age 70. 4:27:48 PM REPRESENTATIVE SADDLER referred to the committee members' bill packet with the geographic differential. He questioned why Anchorage is not listed and asked if it is zero. MR. WOOLIVER answered yes. REPRESENTATIVE SADDLER offered his belief that Fairbanks is not treated well in terms of cost-of-living. He inquired as to whether the rates are indexed to the inflation rate. MR. WOOLIVER answered no. He explained that the chart in members' packets is somewhat complicated. The section shows Fairbanks at 15.2 percent, which is the non-covered geographic differential. He offered that is the statutory rate that applies to members of the executive branch who are not covered by collective bargaining agreements. That rate hasn't changed in years, he said. He pointed out that the three percent amount listed two columns over on the chart represents the most recent union negotiated contracts that adopted per the 2008 McDowell study figures. 4:29:18 PM REPRESENTATIVE MILLER inquired as to how many judges would be affected by the bill. MR. WOOLIVER answered that 23 Superior Court judges and 11 District Court judges would be affected for a total of 34 positions. CHAIR OLSON anticipated a potential amendment to the bill would be forthcoming. [HB 300 was held over.]