Panel hears review of Senate Bill 392 to replace state pay plan; raises slated for roughly 15,900 workers

A Joint Budget Committee personnel meeting reviewed Senate Bill 392, the proposed class-and-compensation pay plan intended to align state salaries with the labor market, consolidate thousands of job titles and create career ladders. State personnel officials said the plan would raise pay for about 15,900 employees and be implemented July 1 if enacted.

The committee heard testimony from state officials who said the bill replaces the existing pay structure, reduces the number of job titles and establishes multiple pay tables for different job categories. "This pay plan that is being proposed is not apples to apples with the current pay plan. It's entirely new," said Senator Brianne Davis (State Senate District 25). Kaye Barnhill of the Department of Transformation and Shared Services summarized the technical changes: the plan consolidates roughly 2,250 job titles to about 850, creates six pay tables (law enforcement and safety; state general services; specialized services; medical; information systems and technology; and executive), and builds job families with career ladders so employees can see promotion paths.

Barnhill said 15,900 employees will receive raises after appeal reviews; earlier estimates presented to legislators ranged lower. "No loss in pay for any employees. No demotions for any employees," Barnhill said, emphasizing that the new grade numbers do not map directly to the old system and that many new grade minimums are higher than old ranges. Leslie Fiskin, Secretary of Transformation and Shared Services, said the plan targets recruitment and retention in areas that have struggled to compete with private-sector pay, including state police, correctional officers and nurses.

Committee members pressed officials on cost and budget mechanics. Staff testimony gave a salary cost estimate of $113,000,000 and an additional matching-cost estimate of $26,000,000, producing a total estimated cost of about $139,000,000. Committee members asked which portion would affect general revenue. DFA staff explained that the salary-side general-revenue impact is approximately $53,000,000 and the remainder is funded by federal or special revenue sources.

Members also asked how the plan interacts with retirement and the performance fund. Officials said hazardous-duty differentials for correctional officers will be folded into base pay, which should count toward retirement credit. On the performance fund, committee staff said the fund balance was being conservatively forecast; one estimate given during testimony put the current fund balance in the roughly $64 million–$72 million range depending on assumptions and preexisting budgeted draws. "If you draw down on that, let's say in FY '26, then the amount that you draw down in FY '26 from the performance fund gets built into your base," said a DFA staff member during testimony, explaining how temporary funding moves into base budgets in subsequent years.

The bill would also create an optional student-loan repayment mechanism that agencies may adopt if they can pay the cost. Officials said the bill only authorizes agencies to offer such repayment; implementation would require follow-up rules and a department-level cost analysis before any payouts. "We would have to come back to personnel committee with specific data and rules to get that program implemented," Barnhill said.

Lawmakers sought greater financial detail. Several members asked for an agency-level breakdown of costs and fund sources; staff agreed to provide a cost sheet per agency and fund source. Officials said departments should first use existing budget savings before drawing on the performance fund; if agencies draw from the performance fund, those expenditures are factored into base appropriations in later fiscal years.

No votes were taken at the meeting. A motion to "do pass" was made but the committee did not vote on the bill that day. Committee leaders and staff said they will circulate more detailed cost information and rules language on student-loan repayment and other new sections and will continue oversight during the interim.

The testimony and committee discussion focused on the technical elements of the pay-plan redesign, the estimated budget impact, and implementation mechanics; legislators emphasized they want agency-level cost detail and binding rules before broad roll-out of optional programs such as student loan repayment.