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Pay raises debated as Parnell proposes budget cuts

By Rhonda McBride 10:37 AM December 17, 2013

“The bottom line is if everybody else has to cut back, then why shouldn’t they?”

ANCHORAGE - To raise or not to raise — that is the debate over State of Alaska department head salaries.

It began last Thursday, when Republican Gov. Sean Parnell announced a $1.3 billion budget cut and at the same time said he would accept the recommendation of a state salary commission to increase pay for the heads of state agencies.

Under the recommendations, commissioner salaries would increase by roughly seven percent, from $136,350 to $146,142.

Democrats immediately vowed to fight the raise.

“I don’t think we have enough money for all 14 commissioners to get a pay raise,” said Rep. Les Gara, an Anchorage Democrat.

Gara believes the governor is sending the wrong message, offering his top executives a substantial raise while schools and children will suffer under his flat education budget.

The pay increases set by the salary commission go into effect automatically unless the Legislature rejects them. The commission recommended a raise of almost $6,000 for the governor, from $145,000 a year to $150,872, set to take effect on July 1 next year.  The governor has said he does not want this increase but believes the raises for his cabinet members are necessary because retention is becoming a problem.

Roger Wolfinbarger, a retired veteran who was shopping at Northway Mall on Monday, believes it sets a bad example to increase commissioner pay.

“The bottom line is if everybody else has to cut back, then why shouldn’t they?” Wolfinbarger said.

Kathy Mills, another shopper, said she’s not sure what is the right thing to do.

“Are the commissioners doing the job they should be doing?  Should they be doing more?  I don’t know,” Mills said.

One longtime Anchorage executive recruiter said pay for the state’s top job is much more complicated than many realize.

“You’re really going after top notch people out of the private sector and asking them to come in and make this a better state,” said Anne Bulmer, a recruiter and manager at Alaska Executive Search, Inc. “But you’re paying them like you’re paying junior executives.”

Bulmer, based on her knowledge of the jobs market, believes members of the governor’s cabinet could earn at least $40,000 more in jobs outside state government.

“And that’s conservative,” she said. “Most of them would be earning well over $200,000.”

Bulmer speaks somewhat from experience. Her husband, Bob, went to work for Gov. Wally Hickel as his chief of operations during his second term, but left after eight months.

“My husband was happy to work with the governor and make this contribution,” she said, “But quite honestly, it was a negative cash flow for the Bulmers.”

It’s hard for the public to understand the 24/7 nature of a cabinet member’s job, as well as the constant travel, Bulmer said.

“It truly is a public service,” said Bulmer, adding it’s something most people don’t appreciate.

Commissioners are paid well below some of the state’s top wage earners. Psychiatrists and other medical professionals, as well as investment officers, are paid more than $200,000, while some attorneys are paid around $155,000.

A look at state salary records shows many inconsistencies.

For example, the newly appointed Commissioner of Natural Resources, Joe Balash, had to take a slight pay cut when he was promoted from deputy commissioner to commissioner.

Conversely, there’s also the case of former Revenue Commissioner Bryan Butcher, whose salary jumped from $136,000 to $250,000 when he stepped down to become director of the Alaska Housing Finance Corporation.

Or consider the fortunes of Craig Campbell, who took a sizeable pay cut when he was tapped for the post of Lt. Governor from his role as the head of the Department of Veterans and Military Affairs after former Gov. Sarah Palin resigned in 2009.

According to the Governor’s Office, Campbell went from earning $135,000 to $100,000.  Today, he is head of the Alaska Aerospace Corporation, a state agency: The job earns him $250,000 a year.

To many – and even those who work in state government — these wide variations in state salaries do not seem to have rhyme or reason. Some say that’s the nature of the beast called government.

And some longtime government observers said people shouldn’t feel too sorry for the governor’s commissioners. They said like an investment, time in government service can be parlayed into a private sector job that pays tens of thousands of dollars more.

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