SB 152-APPROP: COST-OF-LIVING SURVEY    CHAIR GENE THERRIAULT announced SB 152 to be the first order of business. He recognized Ms. Seitz and noted the proposed amendment. AMY SEITZ, Staff to Senator Wagoner, reminded members that the issue of using Seattle as the out-of-state reference for the cost-of-living survey was discussed at a previous hearing on the bill. The discussion centered on the fact that the cost-of- living in Seattle has increased so much that Alaska state employees living in Seattle would get a higher pay increase than in-state employees. The proposed amendment would change the location for the cost-of-living survey to the greater Puget Sound area. SENATOR THOMAS WAGONER motioned to adopt Amendment 1, labeled A.1. CHAIR THERRIAULT announced that without objection, the motion carried. 3:41:35 PM MS. SEITZ told members the cost of the study was also discussed and most members feel $500,000 is reasonable. CHAIR THERRIAULT said he anticipates that the Senate Finance Committee would wrap the cost into a larger appropriation bill and consider the amount at that time. SENATOR WAGONER asked that the Administration speak to the cost of the study and how the findings would be implemented. ART CHANCE, Director, Labor Relations, Department of Administration, felt confident the state could get a competent survey for $500,000. He said he does not believe the implementation costs of the 1984 study were ever truly determined. Many of the findings were implemented through union negotiations and arbitrations - the process of implementation created considerable controversy. He said unless the legislation specifically says otherwise, the study's findings would just count as a suggestion for employees whose wages are established by collective bargaining. He further stated: To the extent that we still recognize it, and we've sort of changed the way we pay those people, their contracts still reflect the old federal 25 percent differential for cost of living - never able to successfully truly change that. We were able to bargain and adjudicate implementation with all the other represented employees the results of the '84 study. It wasn't until ... the '89 round of bargaining that we actually got it all implemented, applying to all other represented employees of the executive branch. To make it apply to non-union employees, you would have to enact it in statute as a part of the 39.27.011 state pay plan. The Administration has taken no position on this aspect of it but I can tell you that I do not relish the idea of having to bargain all of this into all of our contracts and if I were to have to bargain that, I would be over here asking you for money for the next round of bargaining to support that bargaining endeavor, particularly with those units that have interest arbitration. For those of you who aren't intimate to the collective bargaining process, those employees who cannot strike if we do not agree with them voluntarily, they submit their proposals to an arbitrator, the state submits its and the arbitrator decides. To get such a general state study into those contracts I would probably have to hire the contractor and maybe some other economist to come in and testify to that interest arbitrator and convince them - have the arbitrators agree with the state that the results of such a study are, in fact, the differentials that should be applied to those contracts. That's particularly important with the state troopers, since they are all over the state and tend to be in some of the higher cost areas. I'll guarantee you if a new study were to reflect a lower differential to that which they currently have, they would resist it vehemently. It's somewhat important to some institution employees. We do have correctional facilities and correctional officers, which are class 1 in Nome, Bethel, and there's long been agitation for a geographic differential for Spring Creek. So these are all things that we would have to contest either through a negotiated agreement or through interest arbitration. And then the legislature to apply it to non-covered employees would have to enact it in statute and the results of the '84, despite several attempts, have never been enacted into statute. 3:47:32 PM SENATOR WAGONER asked what would happen if the federal cost-of- living allowance (COLA) goes away, particularly with marine highway employees. MR. CHANCE responded marine highway employees have had collective bargaining long before PERA, perhaps since 1962. SENATOR ELTON asked if this bill obligates the DOA to contract for a study sometime in the next fiscal year. He anticipated the contract obligation to be fulfilled 18 to 24 months from now. MR. CHANCE said it could be sooner. He thought an RFP could be out on the street by September. He thought most of the survey could be completed in that fiscal year but assumed the remote site and statistical data would be done in the second fiscal year. He noted the Division of Personnel has a good research section so it would not be starting from scratch. SENATOR KIM ELTON said it appears the report will go to the executive branch and not to the legislature. CHAIR THERRIAULT said the money would be appropriated to DOA, which would conduct the study. SENATOR ELTON asked if DOA would incur any obligation to vet the study. MR. CHANCE maintained that DOA would have an obligation to manage it. He anticipates the Division of Personnel would make a proposal to the legislature to adopt some sort of state personnel pay plan to replace the current plan. It would be his job to follow the legislative directive to achieve success in bargaining. 3:52:48 PM CHAIR THERRIAULT informed members the bill does not have a fiscal note because it is an appropriation bill. 3:52:55 PM SENATOR WAGONER motioned to report CSSB 152(STA) and attached fiscal notes from committee with individual recommendations. There being no objection, it was so ordered.