First of Senate Finance fiscal plan bills moves from committee

JUNEAU (AP) -- The Senate Finance Committee on Tuesday approved a bill updating the geographic pay difference for nonunion state workers -- the first element to move in a package of bills that Finance Committee chairmen say will lay the groundwork for a long-range fiscal plan.

While some nonunion workers oppose the bill, it may be one of the less controversial pieces of the package. The plan also includes a reduction in rural power subsidies; a proposal to reduce benefits for longevity bonuses and some welfare programs if funding falls short; and a bill that would have rural communities help pay for water and sewer projects.

''While no one part of this, or even the entire package, is in and of itself a solution to the fiscal gap, they are all very valuable parts of a solution,'' said Senate Finance Committee Co-chairman Dave Donley, R-Anchorage.

Sen. Donny Olson, D-Nome, said the package is too heavily tilted toward measures that target rural Alaska.

''They're taking from rural people who can least afford it,'' Olson said. ''I find this fairly insulting.''

Donley, however, said the measures that affect rural Alaska help restore fairness.

''A lot of them still mean tremendous subsidies toward rural areas, and they're being characterized as much more dramatic than they actually are,'' Donley said. ''They're just bringing things back to a more fair level of difference.''

The Finance Committee package includes nine pieces of legislation. Donley said he does not expect all to pass this session.

The first was Senate Bill 180, which Donley said actually helps workers in the Bush by updating the pay differential for nonunion workers.

Department of Administration Deputy Commissioner Alison Elgee said the Knowles administration supports the bill.

The pay differential is intended to provide extra money for workers in parts of the state with a high cost of living. It was updated for union employees in the mid-1980s, but the law covering nonunion workers has not changed since 1976, Elgee said.

As a result, nonunion workers in Kenai and Palmer still receive extra pay, although union workers do not, Elgee said. Nonunion workers in Fairbanks receive a 14 percent differential, while union workers receive just 4 percent more.

Some nonunion workers in remote parts of the state would make more under the updated differential, but in most parts of the state, nonunion workers would make less, Elgee said. Those making more than the bill would allow would be frozen at their current pay.

The Finance Committee agreed to send the bill on to the Rules Committee, which schedules bills for a full Senate vote.

The committee on Wednesday will take up the rural power subsidy bill, which would reduce the program's funding by $9 million. The committee will also start debating the bill that could require local contributions on rural sewer and water projects.

The Finance Committee on Tuesday debated two other pieces of the plan -- constitutional amendments limiting state spending and changing the requirements for the Legislature to tap the Constitutional Budget Reserve.

Donley said he doesn't plan to try to move those through the Legislature until next year, since they wouldn't go on the ballot until November 2002.