Lawmakers grill administration officials on contracts

JUNEAU (AP) -- Lawmakers grilled Knowles administration officials about cost increases in new state employee contracts Thursday as the Legislature began a special session less than 24 hours after adjourning.

Majority Republicans balked during the regular session at paying for wage and benefit increases spelled out in newly negotiated contracts with 12 state employee unions. Gov. Tony Knowles called lawmakers back to consider the contracts without the distraction of other issues.

Combined with similar increases for nonunion workers and different contracts negotiated with University of Alaska employees, the agreements would cost $32 million in the fiscal year that begins July 1, said Administration Commissioner Bob Poe.

Of that total, $19 million would come from the general fund. That would largely erase the Legislature's $30 million general fund reduction. But refusing to pay for the contracts could prompt a strike virtually shutting down government during the busiest part of the summer tourist and fishing season.

''Legislators don't take kindly to being blackmailed, nor does the Alaskan public,'' House Finance Committee Co-Chairman Eldon Mulder, R-Anchorage, said after a joint hearing of the House and Senate Finance Committees.

Poe contends state employee pay increases have lagged behind the private sector and the federal government in recent years. He argues that raises are needed to compete for talented and capable workers, especially in high-tech fields.

''We believe these are fair and reasonable contracts,'' Poe said.

All 12 unions were offered similar deals: a $1,200 lump-sum payment this year, a 2 percent increase next year, and a 3 percent increase the following year, plus increases in the state's health insurance contribution.

''Do you think the general public supports these contracts?'' Sen. Randy Phillips, R-Anchorage, asked Poe.

''Most folks were pretty receptive, once given the facts,'' Poe replied.

Several Republican legislators said the security of state employment should compensate workers for making less than they could in the private sector.

''In the private sector, people are concerned from day to day, month to month, year to year, that their jobs won't be there,'' said Rep. Gene Therriault, R-North Pole.

Lawmakers also criticized Poe for not disclosing all the potential costs of the contract, especially a provision in the agreement with the Alaska State Employees Association.

Members of the largest state employee union would be allowed to convert half their accrued sick leave into personal leave, which could then be cashed in. In return, the maximum amount of total leave per year would drop from 30 vacation days and 15 sick days to 36 days of multipurpose leave.

Lawmakers worry that if all of the union's 7,100 members cashed out that leave, it would cost the state about $22 million.

Administration officials dismiss the $22 million scenario, saying they expect only about $4 million in leave will be cashed out, an amount that can be absorbed by an existing leave fund.

''That's the most extreme hypothetical situation that there could ever be,'' Poe said, arguing that other unions have gone through the same conversion without a problem. Poe also said the state will benefit not only from the decrease in total leave, but also from workers calling in sick less frequently to preserve their all-purpose leave.

''We're going to get nine more days of productive work out of these people by doing that,'' Poe said.

But many lawmakers remained unconvinced.

''You are now creating a system where they can ethically and morally get a $40,000 check,'' said Sen. Pete Kelly, R-Fairbanks. ''I don't see why they wouldn't do it.''

The ASEA has agreed to a 75-hour cap on the amount of leave that can be cashed out in each of the first two years of the contract.

The committee adjourned Thursday evening without taking any action.

The special session began with little fanfare. The House and Senate gaveled in just long enough to introduce two bills that would approve the contracts and pay for the increases.

Lawmakers have asked Gov. Tony Knowles to come forward with the money for the first year of the contracts from a source outside the general fund. Mulder said he expected the administration to come forward with a funding package on Friday, although it's uncertain whether $19 million can be found to offset the general fund money.

The law requires a special session to last at least three days, and Mulder said he doubts it will drag on much longer.

''Things aren't going to get any better the longer we stay here,'' said Mulder.