Panel recommends biannual pay increases for Alaska governor, legislators

A three-member commission is poised to approve recommendations for biannual salary increases for Alaska’s governor, lieutenant governor, department heads and legislators.

The State Officer Compensation Commission, whose members are appointed by the governor, met Wednesday and unanimously approved a preliminary draft of recommendations that will eventually be forwarded in January to the Legislature for consideration.

Unless the Legislature passes a bill rejecting them, the recommendations will take effect.

The commission has in the past met regularly to consider adjustments to the state’s top elected officials and department heads. But this year’s recommendations take a novel approach: they would ensure that the governor, lieutenant governor, department heads and legislators receive pay adjustments — pegged to the Anchorage consumer price index — every other year, in perpetuity or unless the commission decides otherwise.

Such a move would ensure that top officials’ salaries will likely climb every year — though the consumer price index does sometimes fall — regardless of changes to other public employees’ salaries or the state of Alaska’s economy and budget constraints.

The commission’s new recommendations come after, in 2023, Gov. Mike Dunleavy hastily replaced all commission members, paving the way for the governor and his cabinet to receive a 20% raise and for lawmakers to receive a 67% raise.

Some commission members said during Wednesday’s meeting that they had reservations about the opaque process that granted state officials massive pay increases last year, but that they supported the outcome since the affected officials had gone several years without a raise.

“I worked at a job where I was essentially on flat wages for almost a decade, so I got to feel the pain of the erosion of the value,” said commission member Jomo Stewart, president of the Fairbanks Economic Development Corp., who previously worked as a legislative staffer.

Commission member Lynn Gattis, a Republican former lawmaker, said that during the four years she was in the Legislature, she struggled to keep her farm and real estate investments afloat. “So I’m very serious about getting good people and paying them well to do a good job,” she said.

Commission members said they intended to use the newly boosted pay approved last year as the basis for future salary increases. Lawmakers’ pay went earlier this year from $50,400 to $84,000. The governor’s salary went from $145,000 to $176,000, The lieutenant governor is now paid just over $140,000. Commissioners’ pay went from $140,000 to $168,000.

“To get the best and brightest, we have to have salaries that will allow people to abandon a year-long job for a new job,” said commission member Larry LeDoux, who previously served as education commissioner. “As far as commissioners go, I believe that we have to be able to compensate people who are experts in their field.”

Pay increases implemented last year for the governor and his cabinet were largely meant to reflect inflation since their last salaries. But pay increases for lawmakers far outpaced increases in the consumer price index since 2010, the last time lawmakers had seen a raise, according to data collected by the commission. It also far outpaced the salary increases provided under state law to non-unionized public employees, including legislative staff members.

The commission did not recommend during the Wednesday meeting any changes to lawmakers’ per diem income, which allows all lawmakers other than those who reside in Juneau to collect an additional $307 tax-free per legislative day, adding up to roughly $37,000 per year for lawmakers for a full 121-day legislative session.

The commission is set to meet for a final time in January to approve the final draft of its recommendations. Once they are forwarded to lawmakers, they go into effect automatically unless lawmakers pass a bill to override them.

Rep. Andy Josephson, an Anchorage Democrat, said Wednesday that lawmakers don’t necessarily need regular pay increases moving forward after this year’s raise.

“I feel like I’m well compensated,” said Josephson, a longtime lawmaker who is expected to help oversee the budget crafting process in the House next year as a co-chair of the finance committee. Still, he said that salary adjustments based on the consumer price index would likely not be costly or have a significant budgetary impact.

Rep. Calvin Schrage, an Anchorage independent with a young child, said this year’s pay increase made it financially easier for him to serve as a legislator. But he expressed some reservations about the optics of giving lawmakers raises at a time when most state government sectors have seen flat funding for years.

“We don’t even inflation-adjust education today,” said Schrage, who is also expected to co-chair the finance committee. “I look at all these other very important priorities of the state and they don’t even get the benefit of basically guaranteed compensation increases to keep up with inflation. So I would have some heartburn over us baking that into our own salaries when our students don’t even get that same benefit.”

‘A bit shocking’

Last year, Dunleavy abruptly replaced all five members of the compensation commission after lawmakers voted to override commission recommendations that included salary boosts for the governor and his cabinet, but not for lawmakers. The governor appointed an all-new board, which swiftly convened a 15-minute meeting in which the sizable pay increases for lawmakers were approved. Lawmakers then allowed them to go into effect.

Since then, three of the five new members that Dunleavy appointed to the commission have left, though the changes were not publicly announced by the governor’s office or the commission itself. Miles Baker departed to become an oil and gas lobbyist. Donald Handeland left after Dunleavy appointed him to the State Personnel Board, which among other tasks oversees the Executive Branch Ethics Act. It was not immediately clear why a third member, Duff Mitchell, left the board.

Dunleavy has since replaced only one of the departing members, appointing Gattis to one of the vacated seats. Remaining on the board were LeDoux and Stewart, both of whom said they were blindsided by the board’s rapid actions last year.

“It was the shortest meeting I’ve ever been involved in,” said LeDoux, who previously served as superintendent of the Kodiak Island Borough School District.

LeDoux and Stewart said they favored regular pay increases moving forward to avoid the public reaction that occurred following last year’s large salary boosts.

“If we don’t do that, then we’ll end up in the same situation where the salary increases may not occur for years, and then when they finally do occur, they’re a bit shocking,” said LeDoux.

But LeDoux also acknowledged that with only three out of the five board seats filled, the board’s proceedings could likely get derailed if one member disagrees with the others. Kate Sheehan, director of the division of personnel and labor relations in the Alaska Department of Administration, said it was not immediately known if or when Dunleavy planned to fill the two vacant seats.

The commission’s actions come as lawmakers are expected to deliberate during the coming legislative session on whether compensation for state employees is competitive when compared with other jurisdictions.

The Legislature approved funding in 2023 for a sweeping $800,000 study meant to compare public sector compensation in Alaska with the private sector and with public sector pay in other jurisdictions. The study was meant to examine hundreds of different job classifications, and lead to a final report that was due in June.

However, the report has yet to be released.

Sheehan said Wednesday that it had been delayed because the department had requested the private company conducting the investigation to amend the preliminary report to include data that was not initially taken into consideration, including recent collective bargaining agreements that had been approved with unions representing public employees, and an 8% pay increase for non-unionized state employees that took effect this year.

Sheehan did not immediately provide documentation showing the details of what had been missing from the initial report.

The report was meant to help address the question of whether lagging and uncompetitive pay structures were contributing to short staffing in state agencies. Vacancies in state departments have led in recent years to delays in processing food assistance applications; curtailed public ferry schedules; delays in snow plowing; and prolonged permitting processes, among other impacts.

“We’re hopeful that we get it in time to make policy accordingly,” Josephson said on the expected salary study report. “We’ve got to make these positions attractive. They’re important to make the wheels of government turn and to have a strong economy.”