Committee deadlocks on change‑in‑employee‑compensation motions; multiple proposals fail

The Joint Finance-Appropriations Committee on Jan. 31 considered four competing proposals for statewide change-in-employee-compensation (CEC) funding for fiscal year 2026 — options that ranged from a flat $1.55-per-hour increase to a 5% merit-based plan and mixed hybrid approaches — but the committee did not approve any CEC motion and left the issue for a future meeting.

Staff described four prepared CEC motions: (1) a CEC-adjusted recommendation that funds $1.55 per hour per permanent employee with specified increases for community colleges, public schools and other targeted groups (motion total presented as $177,429,000); (2) a dollar-55-plus-minimum-3%-for‑higher-pay option (motion total presented as $180,312,100 in the packet); (3) a merit-based approach providing up to 4% merit increases (distribution by merit rather than flat dollar); and (4) the governor’s recommendation, a 5% merit-based increase distributed by salary (packet figures summarized for members). Mr. Bybee, the committee analyst, walked members through the methodology used to calculate the dollar amounts and how the packages would be distributed across agencies and fund sources.

Multiple members spoke for and against flat-dollar versus merit-based approaches. Senator Cook and supporters argued for merit-based increases and warned that flat, equal raises reduce supervisors’ ability to reward high performers. “If we’re a flat pay raise with no ability for a supervisor to recognize great employees…that moves toward the notion of a participation trophy,” Cook said in debate. Senator Cook and others also described checks intended to limit favoritism, noting HR consolidation that centralized oversight of pay adjustments.

Representative Miller and Senator Cook each offered different motions and substitute motions during the hearing; Representative Furness later offered an alternative substitute motion that included a $1.55-per-hour floor plus a minimum 3% for higher-paid employees and some targeted adjustments. Members repeatedly cautioned against making complex and error-prone calculations on the fly, and committee staff declined to accept on-the-fly edits that were not in the official packet.

The committee also spent substantial time resolving how the joint-voting procedure would be applied. Members and staff reviewed a letter governing the vote calculation for the joint committee; staff explained the ballot was programmed to check for a majority of the quorum present in each chamber. Several members said the procedure felt unclear; the chair ruled to proceed using the letter and precedent in place.

Outcome: After several roll calls and attempts to adopt substitutes, none of the CEC motions was adopted. Committee members recorded failures on multiple motions and adjourned the matter for a future date. Representative Furness’s substitute (the $1.55-per-hour with minimum 3% construct) was called and subsequently failed; other motions (including the governor’s 5% merit plan and purely merit-based options) likewise failed to secure the necessary majorities in the joint procedure. The chair told agencies waiting to be heard that the committee would return to the issue at a later date.

Why it matters

CEC decisions determine the statewide salary and compensation baseline used to prepare agency budgets and the state’s appropriation requests. The competing proposals in this meeting differed both in total dollars and in distribution method — flat-dollar versus percentage and merit-based approaches — with implications for lower-paid employees, agency pay parity, and recruitment/retention.

Clarifying numbers and package totals

- Motion 1 (Representative Miller’s packet option): total presented as $177,429,000. - Motion 2 (packet dollar-55 plus 3% minimum for higher salaries): total presented as $180,312,100 in packet text. - Representative Furness substitute (later presented): packet total presented as $178,040,500. - The governor’s 5% merit recommendation was described in the packet; committee members cautioned that column adjustments for trooper pay and other targeted increases were in the packet but the final roll-call math was not recalculated on the floor and therefore the precise combined totals were treated as not finalized.

Committee members noted practical constraints: many school districts and local governments do not have insurance reserves to smooth increases; staff warned that changing formulas affects the distribution to colleges, universities and K‑12. Several members emphasized that the committee’s HR and payroll structures already include checks against favoritism when merit is applied.

Next steps

The committee adjourned the CEC discussion without adopting a CEC package and will return to the issue on a future day after staff review. Agencies scheduled for the hearing were told they would be rescheduled.