The Dunleavy administration has been vague and non-committal about a long-overdue wage study that legislators hoped would shed light on chronic problems of public sector worker shortages and turnover, and a new lawsuit alleges that’s because he didn’t like the results.
The lawsuit filed today by the Alaska State Employees Association alleges the Dunleavy administration manipulated and is intentionally suppressing a $1 million study on how the state’s public sector wages stack up in order to stymie efforts to pay public sector workers competitive wages. The timing is also conspicuous, given the state is in the process of negotiating multi-year contracts with several labor groups.
The study, for which the Legislature approved $1 million in 2023, was completed by the contractor in June 2024 but was extended for nine months of additional work. At a legislative hearing last week, officials claimed the delay was to ensure the study was up to date and reflected a handful of new raises approved by legislators. While they said an updated report would be due from the contractor by the end of March 2025, they refused to say when legislators or the public would actually get to see it.
The vague timing would leave legislators with next to no time to incorporate the findings into this year’s budget and also comes after the new labor contracts need to be done.
Meanwhile, the Dunleavy administration has refused to release any materials from the original report or other drafts, claiming they are all confidential. It has also released the updated contract with conspicuous redactions that concealed just what the administration was actually asking the contractor to incorporate in its updated report.
“What was it that we couldn’t know about?” asked Anchorage independent Rep. Ky Holland at last week’s House State Affairs Committee meeting. Officials with the Department of Administration declined to comment at the meeting.
The ASEA lawsuit includes a copy of the unredacted contract amendment, which shows that the Dunleavy administration sought to lower the standard for what the state considers a competitive wage. Long-standing policy has the state targeting wages in the 65th percentile to remain competitive, meaning the pay is better than 65% of similar jobs.
The unredacted contract lowers that target to 50% for most workers, leaving cops and troopers at the 65% range.
The ASEA lawsuit goes on to say that they believe the change came after the initial report found that most state jobs are paid 15% or more below the competitive rates.
“The Department, knowing that it would have to substantially increase salaries of state employees across the board, quietly rejected Segal’s Salary Study and refused to release it,” the lawsuit argues. “Instead of releasing the study, the Department began to systematically modify the inputs of the salary study to achieve ‘more favorable’ results for the state as an employer and at the expense of ‘fair and reasonable compensation for services rendered’ as required (by law).”
The state has not responded to the new lawsuit.
In terms of relief, it asks the court to rule that the drafts of the report are public documents and require their release in full. It also is seeking an order declaring that the governor’s unilateral decision to lower what constitutes competitive pay is a violation of the Alaska Constitution’s appropriations clause because the $1 million in funding was specifically predicated on it using the 65% point as the benchmark.
In a statement accompanying the announcement of the lawsuit, ASEA Executive Director Heidi Drygas said that the study is critically important to ensure public sector workers are fairly paid for their work.
“The law requires this Administration to be transparent and share the results of this publicly funded study, and it’s the right thing to do. If we want Alaska to be open for business and we want Alaska to be a premier place to work, we need to be sure that we pay our state employees fairly and competitively,” she said. “The last thorough analysis was completed over 15 years ago, and a lot has changed since that 2009 salary study was published. A successful and thriving Alaska requires a functioning government – and a functioning government needs public employees.”
Why it matters
The state is facing a quickly escalating number of problems, including outmigration, crumbling public services and infrastructure, and ever-worsening budget constraints. Approving broadly increased wages for public workers was always going to be a challenging lift when legislators are already looking at a multimillion-dollar deficit, but the Dunleavy administration sought to cut off that discussion altogether.
What it means for the path ahead is uncertain, and any court battle will likely extend several months, if not longer.
But it’s also probably not entirely surprising given that the Alaska Supreme Court has previously ruled that the Dunleavy administration has acted with “abundant evidence of anti-union animus.”
The filing
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Bluesky.
