Shutdown to cost $152 million in state worker payout

Come July 1, state would be forced to empty leave banks

State officials are looking at a potential bill of more than $152 million in required leave payout for state workers if they cannot agree on a capital budget by July 1.

 

“Within 7 days [following a shutdown], the state will cash out the balance of the personal leave account of each state worker, according to our current contract,” said Jim Duncan, director of the Alaska State Employees Association.

As of May 11, the leave liability for classified state workers on contract added up to $152,421,431, according to Minta Mantalbo, public information officer for the Department of Administration. This number did not include leave costs for other state employees, which could add an additional $33,151,741 in payouts.

“The state does not automatically cash out leave for exempt and partial exempt employees,” Mantalbo said. “But if they all chose to take out their leave, that would bring the total cost to over $180 million.”

Leave payouts and unemployment benefits would be the biggest initial costs according to Mantalbo, but much of this is still uncertain.

“That’s a big question with many moving parts,” Mantalbo said.

Unemployment benefit payouts could cost up to $6.5 million per week.

State workers have expressed a number of concerns regarding a potential shutdown, Duncan said.

“The biggest concern is that workers will be out of work for an indefinite amount of time. The fact that they’re going to be on leave without pay will be a major effect on them, their families and their abilities to make ends meet,” Duncan said. “The second biggest concern is health insurance, but leave cash out is right at the top too.”

Duncan confirmed that in the case of a shutdown, state employees would continue to receive health insurance through the month of July.

However, for state workers, these issues could continue even after regaining employment.

“Our members have planned vacations or medical leave which will then be much more difficult when they don’t have any more leave available after coming back to work,” Duncan said.

No official agreements regarding exact leave payout numbers or an official timeframe have been signed, according to Duncan.

“Frankly, we expect the Legislature to fulfill their constitutional mandate and pass a funded budget, so we don’t want to spend unnecessary resources until we absolutely have to,” Mantalbo said.

While Duncan shares this optimism, some state workers do not.

“The leave payout is definitely a hot topic,” said Kirsa Hughes-Skandijs, a statistical technician for the Department of Labor. “After the dry run in 2015, people were trying not to get ahead of themselves, feeling that this time someone would back down in the end and a budget would be passed, but now that we’ve gone into a second special session, I think people are feeling the shutdown is a lot more likely.”

Hughes-Skandijs works in a fairly young office. The emptying of leave banks is something a lot of younger workers are concerned about, she said.

“I know there are people who are banking leave for circumstances like expanding family and taking parental leave,” Hughes-Skandijs said. “If [a shutdown] does happen, then they’re going to come back and not have any of that accrued.”

This topic has been in the forefront of workers’ minds and will effect everyone, according to Hughes-Skandijs.

“Anyone who has a mortgage or rent or a family, it’s definitely something that’s occupying their mental landscape,” Hughes-Skandijs said.


• Erin Granger is an intern for the Juneau Empire. Contact her at eringranger93@gmail.com.


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