State employees protest as legislative budget leaders fail to end impasse

With the legislative stalemate over how to fund the budget dragging on, a throng of angry and disillusioned Alaska state employees packed into the legislative building in Anchorage on Monday to protest the Senate's inability to support their $30 million cost-of-living pay increase.

Though lawmakers have come to verbal agreement on other controversial points of the budget dispute, the wage increase remained a key stumbling block in a special-session battle that has helped push to 140 days a legislative session that was supposed to be 90 days.

"If I was performing my job the way they're performing their job, I wouldn't have a job," said Donna Nass, one of the state workers, who said she had taken personal leave to join the gathering organized by the Alaska State Employees Association.

She and dozens of other state employees who trooped to the Anchorage Legislative Information Office had hoped to see the special House-Senate conference committee meet to resolve the budget impasse.

But that meeting, originally scheduled twice for Friday, was put off again on Monday. The committee meeting is now scheduled for 10 a.m. Tuesday.

The delay further riled critics who fear a budget shutdown will lead to layoffs of thousands of state employees on July 1 if the Legislature can't decide how it will fund the budget.

The state has access to more than $10 billion in savings set aside to close the gap between expenses and revenues during lean years. Still, lawmakers opposed to a wage increase say it's a cost the state can't afford.


Rep. Mark Neuman, R-Big Lake and chair of the conference committee, said he and others are diligently working toward a solution to bring together the Republican-led Senate and House Republican-led majority caucus and the House Democratic minority caucus.

He said the House membership has agreed to support the wage increase with the caveat that the Walker administration would find $30 million in savings to make up the difference. But he said he personally understands the Senate's concern over the increase at a time of multibillion-dollar deficits brought on largely because of the drop in oil prices.

"I get the emails, I understand people are frustrated and want us to hurry up and get this done," he said. "But this year is an anomaly. Everyone agrees this is the most difficult fiscal situation the state has ever been in."

Though the joint conference committee meeting was delayed, members of the Senate gaveled in for a technical session -- short meetings with virtually no business that fulfill the special-session requirement to meet every three days – leading to a short discussion on the wage increase by key senators.

Many of the state employees watched on live television in an adjoining room -- the auditorium where the meeting was held has only 35 public seats -- and cheered when Sen. Bill Wielechowski, D-Anchorage, argued that the state should honor its contract with some 10,000 state employees.

Wielechowski, noting that lawmakers have already slashed the budget by $800 million, said the state workers had sacrificed by accepting a 1 percent cost-of-living increase in the first two years of the three-year union contract. They deserve the 2.5 percent increase promised in the final year of the contract, he said.

Those workers didn't ask for contractual changes and more money when times were better, and the state shouldn't ask them to renege when times are tough, he said.

"A deal's a deal," he said.

Sen. Anna MacKinnon, R-Eagle River, a Senate Finance co-chair and one of six members on the conference committee, acknowledged that the cost of living has risen in Alaska. But she said the state needs a sustainable budget so Alaskans can continue to live without individual taxes and still receive Permanent Fund dividend checks.

"But if we can't prioritize where we're spending money, it will be difficult for us not to look in other directions" for new revenue, she said.

She said the 2.5 percent increase means the starting point for employee wages will be higher for all future years.

"If we raise that platform, we will pay for it in perpetuity for years to come, and for me personally that means Alaska, either in the short-term future or the long-term future, will see job losses," she said.

Sen. John Coghill, R-North Pole, said he hopes people remember that 16,000 construction workers in Alaska have already lost work because state capital spending is shrinking. He said the state can't afford the wage increase, and the Senate is asking state employees to accept a clause that says union contracts are "subject to appropriation."

"We're asking them to be a part of Alaska" and to help cut costs because the state's income has dropped substantially, he said.

That didn't sit well with some of the state workers present, who with thousands of co-workers have received pink slips warning them they may be laid off next month if no budget agreement can be reached.

"I don't see him giving up 2.5 percent of his wages," said Nass, referring to Coghill and wearing a sticker that said, "Don't balance the budget on my back."

She said she and her husband are in the process of building a house in Wasilla but have put contractors on hold because they're not sure they'll be able to pay them. She shook her head and said she doesn't know what will happen if the increase isn't granted.


"I'm going to believe in the process. I'm going to believe that they're coming to their senses," said Nass, a wage and hour investigator for the Department of Labor.

Jessica Wuttke, an engineering assistant with the state and a single mother, said no increase may mean she can't afford the specialty groceries she purchases for her children with allergies. Those prices, and other child-care costs, are rising every year.

"My food bill is over $250 a week, so I'm looking at whether or not I can afford to put food on the table," said Wuttke. "And child care is astronomical and keeps going up. We need that cost-of-living adjustment to pay for that."

Renee Goentzel, who is helping pay off her recent wedding and a new mortgage, said she's stressed by the possibility that she might lose her job, whether temporarily next month or permanently in the coming years as the state continues to face fiscal challenges.

"It's terrifying," she said, with some fellow state workers wondering how they will support their family and pay their bills.

"Meanwhile, (lawmakers) keep delaying the decision, so we stress out about it and lose sleep," she said.

Rep. Chris Tuck, D-Anchorage and House minority leader, said he was hopeful.

One sign of progress was the Senate committing last week in conference committee, at least verbally, to concede to Democratic wishes and increase education funding by $16 million while also providing $15 million for an assortment of Democratic priorities such as the state's ferry system.


Neuman, the conference chairman, said Monday afternoon that a deal may be close. He wouldn't go into details but said an idea he hoped to present Tuesday was being reviewed by legislative lawyers and others. He said it will, he hopes, have the support of lawmakers.

"I'm just trying to put something together that we can talk about," he said.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or