Governor hikes pay for state employees

At added cost of $459,515, timing raising questions

Posted: Sunday, September 17, 2006

JUNEAU - Gov. Frank Murkowski's administration is giving pay raises to 74 state agency directors with less than three months before the governor leaves office.

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The added cost to the state in salary and benefits will be $459,515 per year, according to a memo from Administration Commissioner Scott Nordstrand dated Monday. The raises go into effect Saturday.

Division directors are a mix of political appointees and career state employees who are in charge of various agencies from the Department of Natural Resources' Oil and Gas Division to the Division of Motor Vehicles.

With Murkowski leaving office on Dec. 4, and a high amount of turnover in those higher-tiered offices expected to accompany the change in administration, the timing of the pay hikes raised questions.

"I think a lot of people have been underpaid for a long time, but it makes you want to take a good hard look because it's in the waning hours," said Rep. Beth Kerttula, D-Juneau. "You've got a lot of political appointees and they'll only be there for a few more months. You can't help but wonder if that's an appropriate thing to do."

Steve Cleary, executive director of the Alaska Public Interest Research Group, noted that the pay raises come in the same week school districts and municipalities found out that their pension payments next year will nearly double on average.

The $459,515 to be spent on raises would not have done much to reduce the public employees and teachers retirement systems $6.9 billion shortfall, but it's a poor reflection on the Murkowski administration's priorities, Cleary said.

"Now is really not the time to give executives who are on their way out a pay raise," he said.

In Nordstrand's memo, he said the reason for the raises is to better attract and retain people for those positions within Alaska's executive branch. Finding the right people has proven difficult in the past, he wrote.

Last year, the Legislature approved pay raises for the governor and commissioners, a change that "offers the opportunity to reevaluate the upper levels of the classification plan," Nordstrand wrote.

Nordstrand was not available for comment Thursday or Friday. Deputy Commissioner Kevin Brooks said increasing directors' pay would probably have been unpopular no matter when it was done.

"I could see people criticizing the timing, but I think it's a fair thing," he said.

Seventy-three of the directors affected now earn Range 26 salaries, which is between $77,112 and $91,740 per year. One director earns a Range 24 salary, which is between $69,456 and $82,392.

All 74 directors will now make Range 27 salaries, which is between $79,692 and $95,184.

The pay raises could also help boost the directors' retirement payments, especially if they continue to work for the first four months of 2007 while the next governor is settling in.

Retirement benefits for public employees hired before 1996 are calculated by the worker's three highest consecutive salary years. For employees hired after, 1996 it's the highest five years.

Employees only need to work 115 days in a given year to include that salary level as one of their three highest.

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