Alabama House committee approves bills benefitting state employees
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.
Alabama House committee advances $1.28 billion Education Trust Fund spending bill
A bill appropriating $1.28 billion toward Alabama’s Education Trust Fund continues to move through legislative channels after receiving a favorable vote from a House panel. In January, state Rep. Danny Garrett, R-Trussville, introduced House Bill 138, outlining how funds from the ETF could be appropriated through the end of the state’s current fiscal year, which ends September 30. Most recently, a substitute version of the bill, with an updated list of proposed allocations, was under review. The House Ways and Means Education Committee, which Garrett chairs, approved the substitute version of the bill on March 2 without any substantive discussion. The bill currently remains in committee upon a further hearing. Daniel Davenport, a state legislative fiscal analyst, provided a fiscal note after the House Ways and Means Education Committee adopted the substitute version of HB 138. According to Davenport’s analysis, the bill in its current iteration would fund two-dozen specific education line items if it were adopted as-is. The largest appropriation, accounting for nearly half of the total bill amount, would go toward the ETF’s advancement and technology fund for an assortment of one-time technology and capital projects. It totals $652.12 million. The $1.28 billion ETF spending package also includes several other sizable allocations, including $200 million to service existing debt and $177.37 million toward the Alabama State Treasury Office’s Prepaid Affordable College Tuition, or PACT, program. Also on the list is a $111.18 million line item to the ETF’s budget stabilization fund and $58.4 million toward the teachers’ retirement system for a one-time bonus for the retirees receiving benefits through the program. HB 138 was one of 11 pieces of legislation the House Ways and Means Education Committee took up at its March 2 meeting. The committee also gave a favorable vote on HB 136, legislation that would provide a 4-percent salary increase for public education employees in several sectors. Among them: local boards of education, the two-year postsecondary institutions under the board of trustees of the Alabama Community College for the fiscal year 2023, and multiple state-based specialty schools. Garrett also is the lead sponsor of HB 136. In his fiscal note for this particular bill, Davenport laid out the estimated cost of the 4-percent pay increase and its long-term ramifications. “The total estimated cost of this salary increase is $178.6 million, including the associated retirement and FICA increases, for fiscal year 2023 and each year thereafter,” Davenport wrote. He added, “This act will increase the obligations of the funds of the various local boards of education for fiscal year 2023 and each year thereafter by undetermined amounts, dependent upon the extent that local boards of education have employees paid from federal or local funds or provide a pay raise on salary supplements.” By Dave Fidlin | The Center Square contributor Republished with the permission of The Center Square.
