Dear Finance Committee Members,
This information, taken from the
final report of the Legislative Budget and Audit Committee Wage and
Benefit Study completed in Jan of 1999, should be taken into
consideration during your budget deliberations. The following is
taken directly from the
conclusions of that study:
· Total compensation for State of
Alaska employees was calculated to be 120% of the market median and
125% of the market weighted average private survey data. This
indicates that State employees are compensated more than employees
performing similar work in other organizations within the State’s
defined labor market.
The cost of certain specific
benefits for the State are significantly higher than the costs
reported by survey respondents as follows:
·
Medical Benefits. State of
Alaska contributions towards medical benefits through the flexible
benefits plan are approximately 31% higher ($1,310) than the average
contribution for medical benefits for other employers.
·
Retirement Benefits. State
of Alaska average combined contributions to the Public Employees’
Retirement System (PERS) and the Supplemental Benefits System
Annuity Plan (SBS-AP) are 25% higher ($1,430) than average for the
overall survey participant respondents but nearly identical to those
for other public employers in the survey. The greatest differences
in the cost of retirement benefits between State of Alaska employees
and other survey participants are in the comparisons to private
sector employers ($2,781 or 64% higher) and to Alaska survey
participants ($2,199 or 45% higher).
·
Retirement Benefits. Paid
time off benefits for State of Alaska employees, on a weighted
average basis, are approximately $2,524 per employee (about
48%)higher than the average for survey participants but only $1,507
(24%) higher than the average of all public employers in the survey.
The greatest differences in the cost of paid time off between State
of Alaska employees and other survey participants are in the
comparisons to private sector employers ($3,482 or 81% higher) and
Alaska survey participants ($3,079 or 65% higher).
This report reveals that substantial
cost savings could be realized by simply bringing state employee
compensation into alignment with the median of similar jobs in the
state's defined labor market. At the very least, the state
could trade time off benefits for cash to utilize the state labor
force more cost effectively.
The report also concluded that the
weighted average of the state's employee compensation package in
1999 was $63,000 (46% of which was benefits which are tax free or
tax deferred). I would hazard to guess that is nearly double the
average weighted employee compensation in the Alaska job market. It
does not seam unreasonable to ask our representatives to negotiate
more aggressively on our behalf before asking us to pay additional
taxes or take part of our permanent fund earnings to pay state
employee wages.
In the mean time, you can cut
spending wherever you like, as long as you cut spending. I would
prefer that you cut entitlements first, because I think that is the
most inappropriate misuse of public funds and most damaging to
society, but I am not fussy.
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