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Fiscal News
An update from Legislative Finance
November 28, 2023
November 2023 Newsletter
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This issue includes information about the legislature's role in collective bargaining and the status of the various contracts.
Alaska Featured in Pew Report on Sustainable Budgeting
The Pew Charitable Trust released a report entitled "Tools for Sustainable State Budgeting" that highlights Alaska as one of just eight states that have produced both long-term budget assessments and budget stress tests. It also discusses the work of the legislature's Fiscal Policy Working Group in 2021.
The Legislature's Role in Collective Bargaining
Most employees of the State of Alaska are covered by a collective bargaining agreement between a labor union and the State of Alaska. The Department of Administration's Division of Personnel and Labor Relations bargains on behalf of the State for most unions, while the University of Alaska negotiates on its own behalf for the unions representing its workers.
There are 11 bargaining units in the executive branch that are collectively bargained by the Department of Administration, covering 14,856 employees as of the end of FY23. The University of Alaska currently collectively bargains with four units (a fifth unit, covering graduate student employees, was authorized by a vote in October of 2023). The remaining employees are partially or fully exempt from the collective bargaining process.
AS 23.40.215(a) of the Public Employee Relations Act provides that "The monetary terms of any agreement entered into under AS 23.40.070 - 23.40.260 are subject to funding through legislative appropriation." Therefore, the legislature must approve the funding for any pay increase or other monetary term included in a collective bargaining agreement. Importantly, this does not only apply to the first year of an agreement; it applies to each year. In University of Alaska Classified Employees Association, APEA/AFT, AFL-CIO v. University of Alaska, the legislature did not appropriate funds specifically for the negotiated increases and the Alaska Supreme Court held that absent a specific vote, the terms were rejected.
Monetary terms of contracts are due to the legislature within 10 days of the agreement, or no later than the 60th day of the legislative session, according to AS 23.40.215(b). Agreements do sometimes arrive after this deadline and are usually still approved, but the legislature has in the past refused to consider contracts that were submitted too late to act (without rejecting the contract). The approval of a contract is provided by appropriating funds specified in salary adjustment transactions for each contract. These salary adjustments for each contract are an all or nothing vote: either all salary adjustments must be accepted to approve the contract, or all must be denied to reject it. The legislature cannot alter the terms of a contract.
Current Status of Collective Bargaining Contracts
The eleven bargaining units who negotiate with the Department of Administration are on a three-year cycle. Currently, three bargaining units have contracts that end in FY24 and are negotiating new agreements for FY25. The table below summarizes the status, including the FY24 and FY25 cost of living (COLA) increases that each unit has negotiated. (SEE CHART BELOW)
The contracts for GGU, IBU, MEBA, and MMP include an increase for FY25 that is tied to inflation in Calendar Year 2022. The increase could range from zero to 5%, with the 5% increase effective if inflation exceeded 4%. Actual inflation in CY22 was 8.1%, so those units will receive the full 5% increase.
Exempt, Partially Exempt, and Non-Covered Employees
Legislative and Judicial employees, executive branch employees in politically appointed roles, attorneys, and employees of State-owned corporations are not included in any bargaining unit. These employees' salaries are set in several different ways. The Governor, legislators, and executive branch department heads are subject to an independent salary commission. Many legislative employees, exempt executive branch employees, and court system employees have a salary schedule set in statute. State-owned corporations have compensation set by their boards, but typically follow other exempt salary changes. Many University positions (primarily administrative positions) are also not unionized and receive adjustments from the Board of Regents that are generally in line with the negotiated increases for unionized employees of the University.
Exempt employee salaries (other than for the University) are set out in AS 39.27.011(a) and were most recently increased by 5% in FY23 (roughly matching the cumulative effect of recent Supervisory Union cost of living adjustments of 3%, 1% and 1% in FY22-24). The legislation containing that increase, Ch. 50, SLA 22 (HB 226) also increased salaries for State attorneys by an additional 15% and provided a 10% increase for judicial employees.
AS 39.27.011(m) indicates that the legislature shall increase the salary schedule for the partially exempt employees along with future increases for the supervisory unit. However, doing so will require subsequent legislation to modify the salary schedule set out in statute.
Additional Resources
Full text of the bargaining agreements negotiated by DOA are available on the Division of Personnel and Labor Relations' website. That site also has bargaining unit profiles with information about the makeup of each unit.
Full text of the bargaining agreements negotiated by the University are available on their Labor and Relations website.
Alexei Painter
Legislative Fiscal Analyst
430 Main Street
Juneau, Alaska 99801
(907) 465-3795
http://www.legfin.akleg.gov
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