Gov. Walker plans to freeze nonunion state employees’ pay for two years

Gov. Bill Walker is preparing to propose a bill that would freeze the pay of nonunion employees at the University of Alaska, Alaska Court System, Alaska Legislature and the executive branch.

According to a draft version of the bill obtained by the Empire, the bill would “(eliminate) the payment of merit step increases and pay increments between July 1, 2017 and June 30, 2019” for those branches of government.

Gov. Walker promised a pay freeze in mid-December when he released his draft budget for fiscal year 2018.

“Governor Walker is proposing legislation to freeze remaining step increases for non-unionized employees, effective July 1, 2017. The bill is expected to reduce state spending by $10 million over two years,” a press release stated at that time.

The work draft obtained by the Empire is dated Dec. 30, and it is not clear whether the governor’s proposal has been modified since then. The proposal could even be withdrawn from consideration, but the draft obtained by the Empire indicates the proposal was in the final stages of preparation.

[Read the text of the proposed bill here.]

The governor’s office declined to be quoted on the bill or even say whether the draft has been changed, but it said changes are possible and that it will be introduced once the session begins.

The first prefiled bills of the 30th Alaska Legislature will be released to the public on Monday, but the deadline to submit bills for legal vetting and formal drafting was Wednesday.

A second round of prefiled bills will be released Jan. 13.

The governor’s proposal is narrower than House Bill 379, a pay freeze proposed by House Republicans in the waning days of the 29th Legislature. HB 379, which never reached a vote of the full House, expired at the end of the Legislature. Had it been implemented, it would have frozen step increases and pay increments for all branches of state government until North Slope crude oil averaged at least $90 per barrel for an entire fiscal year.

The Alaska Department of Revenue doesn’t expect that to happen for at least 10 years.

Rep. Chris Tuck, D-Anchorage and the House Majority Leader, opposed HB 379 and says he is “still opposed to a pay freeze.”

“We’ll see how that goes through the House,” he said.

Tuck said a pay freeze is counterproductive if the goal is to stabilize Alaska’s economy, because government salaries drive purchasing in the state.

“We want to continue the velocity of consumer spending in the state of Alaska to keep the economy going,” he said.

Sen. Dennis Egan, D-Juneau, has similar concerns. He remembers the effect previous pay freezes had on Juneau’s economy. Almost one-quarter of all jobs in the capital city are state government jobs.

“I’m just really worried about it, obviously,” Egan said.

Walker’s proposal is restricted to a few branches of government and states that its goal is “to reduce expenditures while maintaining stable workforce levels in order to provide essential services to the public.”

According to figures provided by the Alaska Department of Administration, there are 1,256 nonunion employees in the executive branch; that figure includes state-run corporations. The Legislative branch has 380-400 employees when the Legislature is not in session; that number jumps to 500-520 during session.

There are 2,770 nonunion employees in the university system, said spokeswoman Roberta Graham.

Asked for comment about the bill, Graham said it would be premature for the university to comment before it had seen the language of the legislation. She added that the university system’s proposed FY18 budget does not include any across-the-board salary increases for nonunion employees.

“In this fiscal year, there’s no money in our budget for salary increases,” Graham said.

At least 600 court system employees would be affected, according to figures provided by a court system representative.

Through a spokeswoman, deputy court system director Doug Wooliver — the system’s Legislative liason — said the court system plans “to work with the Legislature and the governor on personnel cost issues.”

Rep. Sam Kito III, D-Juneau, said he’s examining the governor’s proposal — provided to him by the Empire — because he’s not sure whether it’s possible under the state’s administrative rules to split the state’s pay scales. It might not be possible for some nonunion state employees to receive step increases and others to forfeit them.

“I’m trying to find out if it does something different than is already being done,” he said.

The governor has already released details of two other bills he intends to introduce to address Alaska’s $3 billion dollar annual deficit. The “Permanent Fund Protection Act” would divert almost $2 billion per year of Alaska Permanent Fund earnings to state government. The second bill would triple the state’s motor fuel taxes to create a dedicated fund for transportation spending.

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