Hands in the money drawer - Must Read Alaska
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Thursday, November 14, 2019
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Hands in the money drawer

Art Chance

By ART CHANCE

A friend sent me a spreadsheet listing the 1,000 highest paid State employees with their salary and benefit costs, hoping I would write about them.   

It’s tempting; there are some truly exorbitant, even extortionary salaries out there. 

I negotiated billion-dollar labor agreements and did arbitrations with multi-million dollar stakes. Even adjusted for inflation, my salary wouldn’t have made it onto that spreadsheet.  The top 1,000 cutoff is about $140K plus benefits, so a little less than $200K loaded cost.   

The superstars are in the University of Alaska and in the quasi-governmental corporations and commissions; you’re just a nobody in that world at less than $200K plus benefits.  

I know a lot of Alaska’s nomenklatura and could happily trash a lot of them for the moochers and looters that they are. But really the people with their hooves so far in the trough that only their curly little tails are sticking out aren’t nearly as deserving of condemnation as are the people who let them get their hooves in the trough.

A goodly number of the Top 1,000 are classified, unionized employees such as State Troopers, some labor, trades, and crafts employees and others.   I know State government well enough to know that some of the stratospheric wages are the result of lackadaisical or feckless management, but mostly we’re talking about people who have dangerous or high-skill jobs and work long and irregular hours in inhospitable places many of which have a geographic cost of living differential of 40 percent or more.  

 I’ve seen more and done more in Alaska than most people, but I know I don’t want to plow Atigun Pass in January or fly into some Western Alaska village alone to deal with an active shooter.

Like many public employers, particularly unionized ones, Alaska has not dealt very well with the United States Supreme Court Garcia v. San Antonio decision that put public employers under the federal Fair Labor Standards Act’s overtime provisions.   

A State Trooper sergeant is overtime eligible, and these days at base rate probably makes $120- $150K with overtime and various premiums. If s/he promotes to lieutenant, that is an overtime exempt supervisory position, which means you take a dramatic pay cut while still working the same hours and having far more responsibility.   

Funny thing, but nobody wants to be a lieutenant.   

In my time we just averted our eyes and made a sergeant an “acting” lieutenant and let him/her keep the overtime entitlement. I don’t know what they’re doing now but I see some lieutenants and captains in the Top 1,000 list, so I assume they’re still doing the same thing.  You have the same problem with the labor, trades, and crafts supervisors, IT supervisors, and some others.

The real problem however is with the exempt employees in the Executive Branch and in the quasi-governmentals.   Exempt employees are not subject to the State’s classification plan or statutory or union contract pay schemes.  

Exempt is really shorthand for “this employee knows somebody.”  Most exempts are either direct reports to elected or appointed officials or work for appointed boards or commissions.  It’s not being too cynical to say that if you’re an exempt executive director of a quasi-governmental corporation or agency if you give your board or commission a generous travel budget and make sure they have good eats for board meetings, they’ll pay you and your briefcase toter whatever you ask for.

I got a bit cross-threaded with the Murkowski Administration because I was less than enthusiastic about the Department of Revenue’s desire to have some exempt auditors and investment officers created in statute. While that was going on, I wouldn’t go near the Capitol. 

Revenue’s argument was that they needed to pay high-dollar salaries so they could get auditors that could go toe to toe with oil industry accountants and financial managers. We were looking to consolidate a lot of the State’s investment management at the time and they also wanted investment officers who would be on something like an equal footing with the financial managers they had to deal with.  

The cynical side of me was right; as far as I know those highly paid Exempt auditors haven’t audited a thing since the positions were created.   Those Investment Officers who had to be so special really just let contracts to some investment company that does that actual investment management; they’re effectively a contract officer, a position that gets you a Range 14 or 16 if you work in the bowels of the State Office Building in General Services and $150 -$200K if you work on the 11thFloor in the Department of Revenue.

There are jobs like that all over State Government. You can hire a commissioner to run a billion dollar department for $150K. What makes the president of the university system worth $400K plus bennies and a bazillion other UA administrators worth $200 – $300K and more?

 The Executive Branch of State government has a  multitude of $150 -$200K briefcase toters and butt-kissers working for the boards, commissions, and quasi-governmentals. I’m not much troubled by the salaries in the quaisis that raise their own revenue, but the ones that live off General Fund appropriations should be restricted to the statutory State pay plan.

I lobbied here on Must Read Alaska for the new Administration to take a look at all the exempt employees in the Executive Branch and especially to scrutinize all the “temporary exempts.   

As far as I can, tell all the bedwarmers are still warming beds for a $100K+ salary. That’s the trouble when the dog actually catches the car; he has to do something with it. It is so much easier to just take big whacks with a machete than to take a fine tipped pen to an org chart, but the real savings and meaningful reforms come from the boring work of redrawing org charts, not from big, bright, shiny budget cuts that get as many people to hate you as to support you.

Art Chance is a retired Director of Labor Relations for the State of Alaska, formerly of Juneau and now living in Anchorage. He is the author of the book, “Red on Blue, Establishing a Republican Governance,” available at Amazon. 

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  • Seems acceptable for the state-subsidized Oil Industry to pay big bucks. Is that what our tax breaks to BigOil accomplish?

    • That is simply an ignorant leftist meme. Alaska’s oil company subsidies, most of which we haven’t actually paid were to encourage development of Cook Inlet natural gas since Anchorage was facing a serious shortage and to encourage development of new fields on The North Slope and potentially elsewhere in Alaska. The Majors such as BP and Conoco Phillips operating the large legacy fields such as Prudhoe Bay are receiving no subsidies.

      Now I know it evades lefty minds and especially public employee minds, but when the oil industry has a downturn, thousands of people very quickly get laid off, over 7000 to date here in Alaska. Despite Democrat and union lies, the State has had almost zero layoffs from Operating Budget functions. As was the case in the ’80s, the Walker administration slashed the Capital Budget which badly damaged the private sector but didn’t much effect the public sector.

      Now I know lefties and most public employees are impervious to facts, but if you have an informed rebuttal, go for it.

    • Saying that oil companies are subsidized by the state is completely 180 degrees from the truth, especially when speaking of Alaska. Oil companies provide the vast majority of the revenue the state of Alaska brings in. Nationwide government from cities, to boroughs and counties to states, and even the federal government make a massive amount of money from oil companies…they make this money in the form of taxation. If the government decides to not tax something as much or they offer tax credits these are not subsidies. When you get your tax return this is not the government subsidizing you, it is the government giving some of your money back.

      • Well Four-flusher, I showed you where this comment was nothing but garbage on another post of yours so might as well do it here as well. In particular the tax credits for expenses on exploration are very specific subsidies to these Oil Cos. and they have nothing to do with producing companies that are giving some of their money back.

  • A rather large Multi-BILLION Dollar SOA Budget and exactly what do we get for it??? Go ahead and look at the ‘Department Summary’ for yourself (available online) and ask yourself specifically, what exactly are all those BILLIONS of Dollars being spent on to improve your life in AK?
    Surely there can be some efficiencies gained by ‘reasonably’ and ‘responsibly’ trimming the annual budgets of these Departments, possibly reducing services, combining Departments to reduce staff, completely eliminating programs.
    The best time to trim the Budget is now, and I personally look forward to successive years of cutting the Budget, until it’s sustainable and fit-for-purpose, only providing ‘essential’ services.

    • Good article Mr. Chance. You have a unique perspective and a very informative set of experiences. Thanks.

  • Why hasn’t Dunleavey looked at the list of state agencies: https://alaska.gov/akdir1.html. It’s still the same length as it was when oil was $140 a barrel. How can that be? It needs to be trimmed. The state should get out of businesses the private sector can do. Why does the state have to be a mortgage company (AHFC)? Or investment bank (AIDEA)? Cut agencies. Make the agency list shorter. Simple.

  • Best piece written I have seen about the overpaid state employees. They are the ones suing and crying to keep their so called jobs. The public unions need to go. No body ever gets fired and they all are protected. You watch non will get layed off during this budget mess.

  • Good article Art and I really like your rebuttal to Brad.

    • Roger that!

  • Us MRAK readers will be much less informed when we lose Art. Thanks for your contributions!!

    • Is Art going somewhere? Please so no!

  • I spent 30 years in the belly of the beast. I was never at the level you were Art, but I know where the bodies are buried, that’s for sure.
    .
    Your last paragraph says it all for me. It’s been a mantra of mine forever. Scalpel approach. Oh, to be able to smeagol through every last division….one by one…slicing and dicing those ridiculous, repetitive PCN’s. They all add up.
    .
    The waste is epic. If people could get in the weeds of this and see the day to day gushing of waste they would be more appalled than they are now.

    • It starts with the fact that the State still has the same org structure as did the Territory in the days of rotary phones, 1st Class Mail, and carbon manifold copies. It does everything in triplicate or quadruplicate and in the departments with regional structures recreates the hierarchal structure in each region.

      Every common function should be moved to the highest level possible. Typically somebody in OMB has authority over a division’s budget, then the Admin Svcs. director in the department and his/her subordinate the Budget Officer, then in divisions of any size somebody has budget responsibility, and there may even be somebody with budget responsibility down at the section level.

      With today’s communications there is no justification for a regional structure. It only serves to create another layer of director and deputy commissioner level positions. Back in 2000 a group of us designed a structure that consolidated the 14 departments into 8 functional groups and removed most of the layers in those groups. We thought that would eliminate perhaps 2000 administrative and managerial employees and actually improve efficiency. At that time we were looking at 30% or more turnover in the next five years so the transition could largely have been done by natural attrition. The reaction from the congenital ‘crats was vicious. Gov. Murkowski approved pilots in IT and in HR/LR. Dianne Corso and I had the horsepower to implement it in HR/LR, but the congenital ‘crats undid it all as soon as we retired. The ASDs co-opted the discussion of IT and at the end of the Administration is was even less efficient than it had been at the beginning. People in high places get there by knowing the way to high places and they really don’t like anybody trying to change the path.

      • Hope you’ve been in contact with Commissioner Kelly Tshibaka.

        • I’m not nice enough to lefties to suit the Dunleavy Administration so we don’t talk.

  • Art still has his hand in the money drawer via tier 1 state retirement.

    • And I paid for every damned dime and never worked at an exempt salary.

  • There is a crowd that does not care. You found it.

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