Panel OKs state workers’ raises, more reserve funds

BOISE – Two big pieces of Gov. Dirk Kempthorne’s agenda for this year’s Legislature cleared a key joint committee unanimously on Friday – to give state employees raises right away, and to put millions into the state’s rainy-day reserve fund.

The action was surprisingly swift, coming within the same week that Kempthorne made the proposals to a joint session of the Legislature. “This is a great start,” said Kempthorne’s press secretary, Mike Journee.

“It was a relatively easy decision,” said Rep. Frank Henderson, R-Post Falls, who serves on the Joint Finance-Appropriations Committee, “because the money was there, the urgency was there – there was no reason to delay it.”

Both bills still need approval from the full House and Senate and the governor’s signature to become law, but once the JFAC makes a budget decision, it almost always stands. The committee exceeded the governor’s recommendation to put $67 million in the reserve fund, voting instead to put in $70 million.

The merit-based, permanent raises averaging 3 percent for state employees were widely anticipated, with a $214 million state budget surplus and a legislative record of shorting state workers for the past four years because of tight budgets. Lawmakers have authorized only 2 percent in permanent pay increases for state workers in four years – and state wages are now more than 16 percent below market.

“The employees need it now,” said Rep. Scott Bedke, R-Oakley.

Added Rep. Darrell Bolz, R-Caldwell, “The employees do need that kind of an increase. I think it’s very well deserved.”

The raises would go out as soon as Feb. 1 to all state employees including those in higher education, but not to employees of public schools, judges, commissioners or elected officials.

Sen. Bert Marley, D-McCammon, a schoolteacher who is running for state superintendent of schools, objected to leaving school employees out.

“To single out one group and say we’re going to give everybody else this 3 percent increase but we’re not going to give it to our public school employees, it doesn’t make sense,” he said. “Our districts are struggling for funding.”

Marley proposed expanding the raise to include school district employees, even though that would more than double its cost for the rest of this fiscal year. But the move fell short on a party-line vote, with only the committee’s four Democrats voting in favor.

The proposal that passed calls for state agencies to distribute the raises based on two factors: merit, and “market competitive rates.” That’s an attempt to address certain classes of state employees – including nurses and correctional officers – whose pay lags especially far behind market rates.

Legislative budget staffer Matt Freeman said, “This is not an across-the-board 3 percent. Some employees may get 1 percent, some employees may get 7.”

Rep. Dick Harwood, R-St. Maries, voted for the measure but said he’d prefer to wait a month and look at changes to the state’s pay structure and how raises are distributed. He said one agency he knows of divided a recent one-time, 1 percent bonus equally among all its employees on the basis of hours worked. That way, the “top man” got a smaller percentage boost than the lower-paid workers. “To me, I think that is a much fairer way to go,” he said.

Senate Finance Chairman Dean Cameron, R-Rupert, said the state went to a merit-pay system years ago, to reward employee performance. Other legislative committees will decide policies about how future raises should be distributed, he said, but state employees have been shorted on raises because the money wasn’t allocated. “We’re the committee that has the responsibility to appropriate dollars, and we haven’t in the past,” he said.

All North Idaho members of the joint committee – Sen. Shawn Keough, R-Sandpoint, and Reps. George Eskridge, R-Dover, Shirley Ringo, D-Moscow, Harwood and Henderson – joined in the unanimous votes in favor of both proposals.

On the rainy day fund, officially called the budget stabilization fund, Cameron and House Appropriations Chairwoman Maxine Bell, R-Jerome, called for the $70 million figure, which would bring the fund up to its cap – 5 percent of the state budget. The fund now contains just $22 million, but with automatic transfers later this year, it will reach $38 million by the end of the fiscal year.

The balance in the reserve fund dropped to just $34 in June 2003, at the height of the state’s budget crisis. With the additional $70 million, the fund will contain more than $108 million by July 1.

“I think it’s pretty obvious we have been raiding and raiding,” Bell said. “Frankly, we would have been in a lot of trouble if we had not had this fund at our fingertips. It’s a good thing to have.”

Cameron said, “I think the public will appreciate that it’s guarding against future cuts in services or future tax increases.”