Joint Budget Committee approves STEP increases, denies ATB COLA and housing pilot; votes to cover health insurance increase

The Joint Budget Committee on March 30 approved targeted step pay increases for state employees but denied a requested across‑the‑board cost‑of‑living adjustment and a partnership housing pilot, as members said the state faces a sizable general‑fund shortfall.

Chair opened the session and the committee first considered R7, the governor’s Cohen partnership housing pilot. Vice Chair Bridges moved to deny the pilot, saying the state could not fund the agreement in full while balancing the budget. “We cannot fund the partnership agreement in its total package as presented,” the Vice Chair said, and the motion to deny R7 passed 6–0.

The committee then weighed alternatives for employee compensation. Staff explained that the executive’s request often bundles range adjustments with COLA increases and that separating those components changes the fiscal cost. JBC staff presented options that separated STEP (a formulaic step pay based on time in grade) from an ATB COLA, and recommended funding STEP rather than an ATB COLA this year.

Vice Chair Bridges said STEP is the component most likely to address wage compression and retention and moved the staff recommendation to approve STEP pay increases. The motion passed 6–0. Later the committee approved a staff recommendation for a step‑like (merit) allocation for noncovered employees on a 5–1 vote with Senator Kirkmeyer objecting.

Members also voted to deny the department requests for an ATB COLA and a separate 2% structural range adjustment, citing the committee’s need to find savings in a tight budget year. “This is not a judgment on the importance of these things. It is a matter of what we can afford,” the Chair said when explaining why the committee would not fund the full partnership request.

To prevent reductions in take‑home pay from rising employee health insurance costs, the panel approved a Health‑Life‑Dental (HLD) adjustment so the state would absorb the year’s HLD increase. Vice Chair Bridges described the move as ensuring employees do not see a decline in deposited pay: “What we’re saying is that we will pay for that $2 increase, so that what you get in July is the same dollar amount deposited into your bank account as what you got in June.” That HLD adjustment passed 5–1 with Kirkmeyer objecting.

What happens next: the committee’s choices will be reflected in long‑bill drafting and in staff technical adjustments. The decisions set funding priorities this session by prioritizing step increases and benefit‑cost absorption over a broad COLA and larger partnership‑agreement investments.