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State sends bonuses to employees

$18.5 million in payments were part of state contract agreements

Posted: Monday, July 31, 2000

The state put several hundred extra dollars into most state workers' paychecks last week -- and millions into the state economy.

The July 26 payroll contained the $1,200 one-time payments that were part of contracts agreed to in the spring by most state labor unions.

The payments workers actually received were less than $1,200 -- probably closer to $700 or $800 --- after taxes and other deductions were taken out, said Jim Duncan, deputy commissioner of the state Department of Administration.

Administration Commissioner Bob Poe said the payments should have a significant impact on the state's economy.

``State employees spend far and away the large part of their earnings in the state,'' he said. ``It really has a positive bump to the economy here in the middle of the summer.''

Chuck O'Connell, business manager for the largest state labor union, the 7,100-member Alaska State Employees Association, agreed the extra cash in workers' checks will have a ripple effect through the state's economy. He speculated most would spend the money, rather than save it.

The total cost to the state of the payments was $18.5 million, Duncan said. Most workers in the executive, legislative and judicial branches received the extra cash.

There are exceptions. For instance, the state troopers' union agreed to forego the bonus in exchange for more money being put into the troopers' health trust and an increase in the geographic pay differential for troopers in Klawock and Kodiak.

One ferry workers' union, the Marine Engineers Beneficial Association, also opted to make other changes, such as raising pay for some hard-to-fill positions and changing meal allowances, instead of taking the across-the-board payments, Duncan said.

And some workers in the general government unit who are eligible to move up to a new step on the salary scale didn't receive the payment.

Poe said in those cases, the cost of providing alternatives to the lump-sum payments is the same as if those unions had taken the flat $1,200 for all their members.

``Each union got the same deal, and they used it differently,'' he said.

Legislators, the governor and the lieutenant governor did not receive the payment. Those who work part time or who have worked for the state less than a year received a smaller, prorated bonus.

In addition to the lump-sum payments, Duncan said the state will be spending $6.2 million this year on increased health-care benefits. For some workers that will also mean a boost in the bottom line because their required contribution to their health plan may go down.

That spending will be spread out over the year, Duncan said.

The $1,200 payments are the first tangible benefits workers have seen from three-year contracts unions agreed to this spring.

The contracts call for most workers to receive 2 percent raises in the second year of the contract and 3 percent raises the third year. State spending on health benefits is also to go up in those years. Money to pay for the second and third years, however, has yet to be appropriated by the Legislature.



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