Alabama state employees could receive pay increases and one-time, lump-sum retirement contributions based on a package of bills under consideration.
House Bill 202 and companion legislation Senate Bill 110 are calling for 4% salary increases for employees in the state’s next fiscal year that begins October 1.
Lawmakers this legislative cycle also have introduced HB 404 and SB 111, which would provide retirees with a one-time bonus check if ultimately adopted. The proposal also has been referred to as a longevity bonus.
Based on the draft language, the lump sump pay would be based on a formula of $2 per month for each year of service the retiree attained while on the state payroll. The provision applies to past employees who retired prior to March 1.
The bills were most recently discussed at the state House Ways and Means Committee on March 9 and received favorable votes on a third reading.
State Sen. Greg Albritton, R-Atmore, is the sponsor of SB 110 and SB 111. He spoke to his House colleagues at the recent meeting about the bills, particularly the call to increase base wages.
“I think this bill is very much needed, especially when you consider the increased costs,” Albritton said of HB 202 and SB 110.
On the House side, state Rep. Kelvin Lawrence, D-Hayneville, is the sponsor of HB 202, and state Rep. Chris Sells, R-Greenville, is the sponsor of HB 404.
State officials have offered analyses on the fiscal impact of each of the legislative proposals.
The 4% pay bump naturally would impact one of the state’s largest expense line items – personnel.
“This bill will increase the personnel costs of state agencies by an estimated $87.8 million in fiscal year 2023, with an estimated $27.7 million of this increase paid from the state general fund,” financial analyst J.T. Mathis wrote in a fiscal note.
The impact of the one-time lump sum payout to retirees has a more complex impact on the state’s bottom line.
“According to the actuary for the Retirement Systems of Alabama, this bonus will cost an estimated total of $15 million, of which the state general fund portion is estimated at $4.2 million,” analyst Daniel Davenport wrote in a fiscal note.
Moreover, in FY 2024, Davenport wrote the rate for recipients into the state Employees’ Retirement System “will increase by 0.98% of payroll for state employees, and the ERS employer rate paid by state agencies will increase by 1.18% for state police” if the bill is adopted in its current draft form.
Republished with the permission of The Center Square.
