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Sponsor Statement for CS for SB 180
State Employee Pay Differentials

An Act implementing pay differentials based on geographic areas for certain state employees and for members of the Alaska State Defense Force; and providing for an effective date.

Committee Substitute for Senate Bill 180 changes the manner in which geographic differential payments for cost-of-living differences are determined for state employees who are not union members. This legislation adopts the most current geographic differential report. The current statutory formula has not been updated since June 1976 and unfairly discriminates against some state employees while unfairly benefiting others. All union state employees are already under the new formula. A similar bill was passed by the legislature in 2000 but was vetoed by the governor. This bill does not contain the provisions the governor cited as the reason for his veto of the 2000 bill.

The geographic differential calculation utilizes a percentage above a specific measurement baseline. In Alaska, Anchorage is the only federal measurement of the cost-of-living. Therefore, Anchorage is used as the baseline measurement for determining the cost-of-living in the various Alaska election districts and "out of state" locations. This legislation will affect employees in the executive branch of government in partially exempt service or not covered by union contract, and members of the Alaska State Defense Force whenever they are called to active service.

Committee Substitute for Senate Bill 180 effects employees hired on or after the new effective date. Current employees will remain under AS 39.27.020, even if they leave and return to state employment after AS 39.27.021 goes into effect. The fiscal impact is contingent upon future savings generated by this new legislation.

Committee Substitute for Senate Bill 180 purposely holds harmless other programs that use these statutory sections for calculation of revenue sharing cost-of-living adjustments. It also makes no change to the current differential applicable to state employees who work in another state.

Committee Substitute for Senate Bill 180 will ensure all state employees receive fair pay adjustments based on a new fairer cost-of-living analysis.

This legislation goes into effect July 1, 2002.

DD/mjw

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