Senate Finance Committee cuts state employee raises
The Senate Finance Committee found more than $50 million in savings on Wednesday, savings that will come at the expense of state employees.
The committee, while putting the finishing touches on the state operating budget, eliminated pay raises for state workers.
It passed an amendment that would reopen contracts the state has signed with more than a dozen employee unions.
Some lawmakers opposed to the amendment question whether this is legal.
“A contract is a contract,” said Rep. Chris Tuck, the House Minority Leader. “Now we’re turning our backs on those contracts.”
Outside of the Legislature, Tuck works as a business representative for the International Brotherhood of Electrical Workers Local 1547. He calls the budget amendment an overreaction to the state’s fiscal problems.
“Even if we terminate every state employee, it’s way off from getting our deficit under control,” Tuck said. “We don’t want to risk putting our economy into a tailspin by putting fear into people.”
Sen. Pete Kelly, who introduced the amendment, acknowledged there are some difficult trade-offs in dealing with the state’s $3.5 to $4 billion deficit.
“We don’t have the luxury of paying people raises,” Kelly said. “Any business, if they were looking at this kind of shortfall would say, ‘Hey guys, your raises are off for this year — Christmas bonus or whatever it is.’”
Kelly, who is co-chair of the Senate Finance Committee, says cutting employee salaries will save about 300 state jobs currently on the chopping block.
“Is it better for people to keep their jobs, or for people to get laid off — and the ones that are left get a raise? I think that’s a pretty easy answer,” said Kelly, a Fairbanks Republican.
Kelly’s proposal comes after public testimony on the operating budget has closed. Although the amendment could affect more than 25,000 state workers, Kelly says it’s not unusual for such steps to be taken late in the session.
Vince Beltrami, director of the Alaska AFL-CIO, said the amendment comes from left field. He said a measure of this magnitude should have been vetted through the public hearing process.
“Nobody talked to us. Not one legislator,” Beltrami said. “It came out of left field. It’s a slap in the face to state workers, and I think it’s unprecedented.”
Beltrami says if employee pay raises are cut, they would come in the final year of a three-year contract.
“Those employees took concessions in the first two years of the contract. It’s not like they’re staying even. They’re losing ground,” Beltrami said.
After Kelly’s budget measure passed the committee without objection, it triggered closed-door meetings throughout the Capitol, with union representatives going in and out of legislative offices — so it appears there is an active campaign to have the amendment withdrawn.
Democrats said they’ve been pushing for a delay in paying oil companies tax credits that could save the state hundreds of millions of dollars, a proposal that has not had any traction this session. Their argument: if a promise made to state employees can be broken, why not one to oil companies?
Republicans say the proposal is counterproductive to the goal of getting more oil production to fill the Trans-Alaska Pipeline, the key to raising state revenues.
Once the Senate Finance Committee finishes its work, the operating budget will go to the full Senate for approval, where more amendments will likely be made.
Once the Senate approves the budget, it will go to a conference committee to work out the differences between the House and Senate versions of the budget.
Senate leaders have said they hope to vote on the operating budget on Friday.
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