SB 65-PAY EQUITY FOR STATE EMPLOYEES  SENATOR DONLEY said that SB 65 would require the State of Alaska to conduct a gender equity study regarding state employee compensation. Although compensation studies have been done, there has never been an analysis of whether women or men are being discriminated against because of gender. Female state employees are generally paid less than male state employees but it isn't known whether this is due to discrimination or whether the jobs they perform are valued less in the work market. In looking at the experiences of other states on this issue there are two basic scenarios. In the first, the states are proactive in performing gender equity studies. If discrimination is found the state corrects the problem. In the second situation, the state does nothing until a discrimination lawsuit is filed. The proactive approach is economical in the long term because litigation is so costly. Number 1588 The legislature will work with the Department of Administration to try to keep the study costs to a minimum but it is important, from a government management point of view, that the study go forward. CHAIRMAN THERRIAULT asked for questions for Senator Donley. SENATOR PHILLIPS said he thought that a study was done five to seven years ago and he wanted to know why it would differ from this one. SENATOR DONLEY said that past compensation studies haven't been true gender equity studies. They haven't done an analysis of whether the particular job classification is paid less because it is dominated by a particular gender. Gender equity studies look at job classifications that are dominated by one gender and then determine whether or not that is how the compensation for that job was established as opposed to the true value of the work performed. CHAIRMAN THERRIAULT asked for questions. SENATOR DAVIS asked for a list of the states that already conducted gender equity studies. She also wanted to know if there are many states that had made corrections. SENATOR DONLEY said he would provide the list to the committee. CHAIRMAN THERRIAULT said there was information in the packet stating that the National Committee on Pay Equity had identified 20 states as having fair pay/pay equity for state employees. SENATOR DAVIS said she had read that and wondered if SB 65 would do anything differently. She too thought there had been a study done some years ago. SENATOR PHILLIPS said he had been trying to get a copy of the previous study and would share the information once it was in his possession. Number 1809 SENATOR DAVIS agreed with the need for such a study but wondered about the timeline. SENATOR DONLEY said they were trying to give the Department of Administration time to develop a system for doing the study so that was why the study results wouldn't be presented to the legislature until 2003. CHAIRMAN THERRIAULT noted the arrival of Senator Halford. CHAIRMAN THERRIAULT felt that the $750,000 fiscal note was speculative at this point. He wondered whether the department would locate computer programs that could be used and examine programs developed by other states and then return to the legislature with a more complete cost estimate for the study. SENATOR DONLEY said progress was being made to reduce costs from the original estimate and he wanted to continue to work with the Department of Administration to find the most economical approach possible. CHAIRMAN THERRIAULT asked for questions and there were none. Number 1978 MR. STEWART, personnel manager for the Department of Administration, Division of Personnel, said that although the state has conducted many market evaluation salary studies, a gender equity study has not been done. The Pete Marwick study, dealing with job classifications, was done about three years ago. CHAIRMAN THERRIAULT said he thought Senator Phillips might have been referring to a salary study and although that provides information about job categories it doesn't answer the question about whether similar job categories might have different pay scales because one of those jobs is dominated by one gender while the other is not. MR. STEWART said that the department is supportive of the effort to develop a study. CHAIRMAN THERRIAULT asked if there is concern about litigation. MR. STEWART said he doesn't share that concern. There are checks and balances in the system and there hasn't been a large increase in grievance complaints indicating problems that haven't been identified. While there isn't a pressing problem, the system can always benefit from a reevaluation. SENATOR PHILLIPS asked what became of the Pete Marwick classification study and how much it cost. MR. STEWART didn't believe anything was done with it; the cost was about $225,000. CHAIRMAN THERRIAULT said he believes the cost was $250,000 for that study and the beginning of the Education Study. It could provide useful information but it didn't answer the questions addressed by SB 65. SENATOR PHILLIPS asked if that study pointed to certain trends, such as a gender gap. MR. STEWART said the Pete Marwick study didn't discuss gender gap. CHAIRMAN THERRIAULT wondered whether it might be advantageous to reexamine the data to look for trends that weren't the focus of that study. MR. STEWART didn't think so. CHAIRMAN THERRIAULT said that when software use is a possibility and other states' programs are considered, the fiscal note figures seem speculative. MR. STEWART said the FY02 $50,000 figure was the amount anticipated for commissioning an independent review of possible bias problems. The $750,000 is an estimate of what a full study would cost. This was put in FY03 in case something was found during the review period. CHAIRMAN THERRIAULT said according to Senator Donley, the anticipated costs have been adjusted down but he wanted to know what the starting figures were. MR. STEWART said they started with seven zeros. Senator Donley's office was helpful in directing them to existing models such as the one from Minnesota. They have developed a software system to repeatedly test job classes but their classification system is very different from Alaska's so it's not useable unless all state positions are reclassified. The fiscal note is an average of rough estimates that ranged from $1.5 million to $500,000 to do a complete "job class by job classing position-by-position study". SENATOR PHILLIPS asked whether the Department of Administration (DOA) was better able to do this type of study than the Department of Labor (DOL) and is "the study just for the classification of state government or employment period." MR. STEWART said that DOL has labor economists and can talk about trends and analysis while DOA has the experts on the state's classification system for state employment. CHAIRMAN THERRIAULT said that although DOA would be contracting the study out, it deals with job classifications and would therefore manage the contract. TAPE 01-5, Side B Number 2356 SENATOR THERRIAULT said that he was somewhat concerned about the second year of funding because although they aren't making an appropriation with the fiscal note, the legislature is giving an indication of what the agency can expect for funding. He asked if there were any questions. There were none so he asked Caren Robinson forward to testify on behalf of the Alaska Women's Lobby. MS. KAREN ROBINSON, Alaska Women's Lobby, said she agreed with Senator Donley, that this study is "the right, fair and smart thing to do." The Alaska Women's Lobby is hopeful that this legislation will pass and pleased that the Administration is willing to work with the legislature. CHAIRMAN THERRIAULT asked for questions and other testimony and there was no response. He said there were no amendments and no committee substitutes. He turned his attention to the fiscal note and asked Senator Donley if he would prefer dealing with DOA for the second funding year. SENATOR DONLEY said that his understanding of the fiscal note was that $50,000 was allocated for the preliminary assessment. If the assessment indicated problems, then funding would have to be found for a full study. He thinks the assessment figure is reasonable. CHAIRMAN THERRIAULT said that if the full study is needed, it will need to be worked into the next operating budget. SENATOR DONLEY said that's true. If there are indications that a full study is needed, an assessment will need to be done to determine the size of the problem. SENATOR HALFORD said that although the amount in the fiscal note is not binding, he would be more comfortable if it was $500,000 rather than $750,000. CHAIRMAN THERRIAULT agreed and said it is his preference to change the amount from $750,000 to $500,000 since the estimate was in that range. SENATOR PEARCE said that if the initial assessment indicated that a full study is necessary she thought the data would ultimately be more useful if a market study was done at the same time as the gender study. SENATOR DONLEY said he would continue to work with DOA to identify the correct parameters of the initial study because he agrees with Senator Pearce; the marketplace situation also needs to be examined. CHAIRMAN THERRIAULT asked for the will of the committee. SENATOR PEARCE made a motion to move SB 65 and the $500,000 fiscal note move from committee with individual recommendations. There were no objections. CHAIRMAN THERRIAULT said SB 65 with the modified fiscal note would be moved.