http://www.azcentral.com/news/articles/0127employee-pay27.html

State workers' 6.3% raise OK'd Senate passes measure on 25-2 vote; Napolitano indicates she will sign it

Robbie Sherwood The Arizona Republic Jan. 27, 2006 12:00 AM

State workers in March will get their largest pay increase in decades, an average 6.3 percent bump for thousands of rank-and-file agency and university employees, lawmakers decided Thursday.

The Senate overwhelmingly approved the $225 million pay package, touted as a badly needed balm to stem high turnover and low morale among the 50,000 people who provide state services. The House passed the same package Wednesday.

While a few Democrats criticized the plan as not generous enough, or because there were some strings attached, Gov. Janet Napolitano told Democratic lawmakers Thursday that she was eager to receive the pay raise bill and would likely sign it into law.

"I'd prefer to give our state employees a raise now, as opposed to letting it get wrapped up into budget negotiations," Napolitano said.

If Napolitano does sign the plan, workers will get their first increase on March 11. The Senate approved House Bill 2661 by a vote of 25-2. The House approved it 42-15.

Some state employees were cautiously optimistic about the raises, still not quite believing they were real after years of disappointment.

"If it actually passes and it's actually given to us, that would be a good thing," said Tess Hawthorne , a single mother of five who works as a fiscal service specialist for the State Land Department. "But at this point, we'll wait until we actually see it on a paycheck before we get too excited. We've had raises promised before."

Every state worker would get an automatic $1,650 yearly increase, and then a 2.5 percent "performance pay" raise on top of that. That means workers at lower salaries, between $20,000 to $32,000, would get raises as high as 10 percent. Workers at higher salaries would get raises closer to 4.2 percent.

To keep their performance pay raises, however, state agencies will have to create new standards to improve productivity and the quality of their services. If an agency's workers don't meet those new standards, they could lose the 2.5 percent performance increase.

Sen. John Huppenthal said a few state agencies, such as the Registrar of Contractors and the Arizona Department of Game and Fish, already have performance pay plans and they are working well.

"What we have here is a win-win for both our state employees and our taxpayers who get state services," said Huppenthal, R-Chandler. "Results from performance pay have been very good to spectacular. It results in better pay and a better working environment."

Also, new hires who make over $47,758 will no longer be subject to the state merit system, meaning they cannot gain any sort of tenure and can be fired for any reason, as in the private sector. Corrections officers and Department of Public Safety officers would be exempt from this rule, however.

Some senators, such as Democrat Victor Soltero of Tucson, voted for the bill despite deep misgivings about the performance pay measure.

"I'm not at all enthused about this bill; I think we could have done a better job," said Soltero, who favored a 9.5 percent increase. "But if our state employees can get a raise in March, I'm for them receiving an increase as soon as possible. I hope down the road pay for performance does not become an obstacle."

Senator Carolyn Allen of Scottsdale broke ranks from her Republican colleagues because she could not support the performance pay measure.

"I want our employees to have a pay raise," said Allen, R-Scottsdale. "I don't think we should give them a pay raise and then take it away from them."

State workers in Arizona make an average of $32,789 a year, 22 percent below the estimated market value for comparable workers. Employees in nearby states make substantially more: an average of $45,425 in Colorado and $43,550 in Nevada, for example.

Late in 2005, a state legislative advisory committee recommended employee pay raises of 7.5 percent next year and 6.3 percent during the four years beyond that to bring Arizona up to the market rate.

Lawmakers have approved raises in the past two years for Department of Public Safety and Corrections officers to help stem double-digit turnover rates and close a wide pay gap with other government police forces. Rank-and-file employees got what was termed a 1.7 percent raise last year, but really it was just enough to cover a mandatory increase to their retirement contributions. After that raise was taxed, most employees actually lost a few dollars out of each paycheck.

Rank-and-file workers in other agencies last got a real pay raise in 2004, an across-the-board $1,000 increase that amounted to an average raise of about 2.6 percent. And a $1,400 bump in 2002 was the only other raise they've gotten in the past eight years.