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Legislative leaders raise labor cost concerns

Published on NewsOK Modified: February 28, 2013 at 2:37 pm •  Published: February 28, 2013

JUNEAU, Alaska (AP) — Alaska legislative leaders are urging Gov. Sean Parnell to negotiate no raises in union labor contracts amid concerns about state budget costs.

Senate President Charlie Huggins, House Speaker Mike Chenault and the leaders of the House and Senate Finance committees signed the letter. It comes as the administration is involved in negotiations affecting nearly two-thirds of the state workforce.

The lawmakers said in the letter they will consider the private sector, the state's ability to pay, and the best interests of all Alaskans as they prepare to vote on the contracts and write the budgets that will be affected by them.

They asked Parnell to convey to the state's employees that they value their service.

"However, in this fiscal environment we are concerned that increases in wages and benefits may necessarily squeeze budgets and put employees' jobs at risk," says the letter, dated Feb. 18. "The loss of any job, public or private, is a tragedy. For this reason, we encourage you to hold the monetary terms of the contracts at zero."

Even if oil prices remain high, the state likely will still be forced into deficit spending — "even under a disciplined budget plan," the lawmakers noted. And overshadowing all long-term budget issues is an unfunded state pension liability estimated at about $11 billion, they said.

The lawmakers said they appreciate the value of Alaska's public employees but must balance the input from other constituents, who say wages, benefits and other terms of state employment "are often quite generous compared to their counterparts in the private sector."

The contracts will be considered in the context of "our duty to provide education, infrastructure, public safety and some level of health care," the lawmakers wrote.

The governor and legislative leaders have discussed the need for fiscal restraint amid declining oil production. The state relies heavily on oil, but higher prices in recent years have helped mask the decline's effect. The finance committees, which deal with the state operating and capital budgets, have heard presentations from the administration on labor costs as part of their deliberations.

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