House restores money for state contracts

Posted: Sunday, April 30, 2000

JUNEAU (AP) -- The House voted Saturday to include more than $18 million from the state's general fund in a bill authorizing new state employee contracts.

The contracts are shaping up as one of the dominant issues as the Legislature nears adjournment. While the House has the votes to approve the agreement, the Republican-dominated Senate is likely to reject them because of their costs.

That could trigger a special session called by Gov. Tony Knowles, a strike, or both.

''I see no need to come back into a special session to do what is inevitable,'' said Rep. Jeannette James, R-North Pole, before the amendment earmarking the money passed 25-14. A final vote on the revised bill was delayed until Sunday.

The bill authorizes about $37 million in wage and benefit increases for members of 12 state employee unions, along with nonunion workers and University of Alaska employees.

It was originally written to exclude the use of general funds because majority Republicans hope to reduce general fund spending by $30 million this year.

''This blows that goal right out of the water,'' House Finance Committee Co-Chairman Eldon Mulder said of Saturday's amendment.

Mulder had challenged the Knowles administration to find the money from other sources.

Rep. John Davies, D-Fairbanks, said he asked the Office of Management and Budget to put together a list of money sources. In addition to the general funds, the amendment adopted by the House taps dozens of accounts for varying amounts.

More than $46,000 would come from the Exxon Valdez oil spill settlement fund, while the Children's Trust would chip in $300 from its earnings.

Davies said adopting the list would be the cleanest way to let House lawmakers vote up or down on the employee contracts.

That prompted complaints from some lawmakers.

''That's not clean at all,'' said Rep. Ramona Barnes, R-Anchorage said. ''It looks mighty dirty to me to spend all the little pots of money you can find.''

The 12 state employee unions all have similar contract agreements: a $1,200 lump-sum payment this year, a 2 percent increase next year, and a 3 percent increase the following year, and increases in the state's health insurance contribution.

The bill would give the same deal to state employees who aren't represented by unions, and authorize increases in separate contracts with the university's unions.

The Senate has offered an indirect counterproposal in a bill that would give nonunion employees an $800 payment this year and 2 percent increases in the subsequent years.

An effort to amend that measure to match the terms of the contracts failed Saturday.

''We're avoiding creating two classes of employees,'' said Sen. Kim Elton, D-Juneau.

The amendment failed 6-11, with two Republicans joining four minority Democrats. A final vote on the bill was delayed. The measure's sponsor, Sen. Tim Kelly, R-Anchorage, said it was intended as a counteroffer in case the contracts are rejected.

''How much more are we going to have to spend?'' Kelly asked. ''How much are we going to have to add to the gap between revenues and expenditures?''

As the session comes to a close, the House could approve the contracts and send its bill to the Senate to force a vote.

''I'm sure that's been their strategy all along -- take this hot potato and hand it off,'' said Senate President Drue Pearce, R-Anchorage.

Pearce and other senate leaders have said they hope to have a special session on the contracts soon after the regular session's adjournment.

But Jim Ayers, Knowles' chief of staff, has said the governor would likely wait until Pearce comes forward with enough votes to approve the agreements, even if that meant a lengthy strike.

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