Analysis Item 1: Judicial Department Compensation Plan Changes
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1 Analysis Item 1: Judicial Department Compensation Plan Changes Analyst: Steven Bender Request: Acknowledge receipt of a report on a compensation plan change. Recommendation: Acknowledge receipt of the report. Analysis: The Oregon Judicial Department (OJD) is reporting on a compensation plan change prior to implementing the change, as required under ORS 8.105(1). The Chief Justice of the Supreme Court, as administrative head of the Oregon Judicial Department, is authorized to establish the personnel plan for OJD employees. Compensation levels for statutory judges, on the other hand, are established by statute. In November 2015, OJD reported on compensation plan changes that matched those adopted for Executive Service, Unclassified Excluded and Management Service employees. Those changes included a 2.25% cost-of-living salary increase (COLA) effective December 1, In June 2016, the Governor announced that an additional 2.75% COLA will be applied to Management Service and unrepresented employee salaries effective December 1, The Chief Justice has matched this action and approved a 2.75% COLA for OJD employees effective on the same date. The General Fund impact of the cost-of-living adjustment will total approximately $1.7 million in the biennium, and approximately $6.1 million in The Other Funds impact of the COLA will total approximately $111,000 in , and $396,000 in OJD also provided information on the General Fund impact of a cost-of-living adjustment to be applied to judges salaries. Legislation enacted in the 2015 session adjusts statutory judicial salaries to incorporate any positive cost-of-living adjustments granted to Management Service employees. Under this law, judges salaries will increase by 2.75% on December 1, 2016, to match the Management Service COLA being applied that same day. Statutory Judge Salaries Effective 12/1/15 Effective 12/1/ Chief Justice $133,556 $138,556 $141,672 $145,572 $150,572 Supreme Court Justices $130,688 $135,688 $138,744 $142,560 $147,560 Court of Appeals Chief Judge $130,688 $135,688 $138,744 $142,560 $147,560 Court of Appeals Judges $127,820 $132,820 $135,804 $139,536 $144,536 Tax Court Judge $123,164 $128,164 $131,052 $134,652 $139,652 Circuit Court Judges $119,468 $124,468 $127,272 $130,776 $135,776 The statutory salary levels for judges are displayed in the above table. The impact of the 2.75% COLA on judicial salaries is shown in the yellow column. The final column shows the impact of an additional $5,000 judicial salary increase effective on January 1, This increase was approved in Legislative Fiscal Office 1 Emergency Board September 2016
2 the 2016 session, and is independent of applying the Management Service employee COLA to judges salaries. The General Fund impact of the cost-of-living adjustment for judges totals approximately $520,000 in the biennium, and $1.83 million in The biennium impact of the 2.75% COLA, on both employee and statutory judge personal services costs, is funded in the OJD biennium current service level calculation. The Legislative Fiscal Office recommends acknowledging receipt of the report. Legislative Fiscal Office 2 Emergency Board September 2016
3 1 Oregon Judicial Department Lisper Request: Report on the Oregon Judicial Department prospective compensation plan changes for employees and judges. Recommendation: The Oregon Judicial Department is not under executive budgetary authority. Discussion: The Oregon Judicial Department (OJD) is reporting on a compensation plan change for its employees and judges, effective December 1, 2016, and salary increases for judges, effective January 1, OJD is reporting the following adjustments to their employee and judge s compensation plans: A Cost of Living Allowance (COLA) increase of compensation by 2.75 percent for agency employees and judges, effective December 1, A salary increase for judges, of $5,000 annually, effective January 1, The second year COLA mirrors the executive branch increase for management service, executive service and unrepresented staff announced by the Governor in June The salary increase for judges, was passed into law under Oregon Laws 2016, Chapter 118, Section 11, 12, 13 and 14 (SB 1597). The second year COLA for the biennium is estimated at $1.7 million General Fund and $0.1 million Other Funds. The judge's salary increase is $0.5 million General Fund for the biennium. The estimated biennium costs for these adjustments are $6.1 million General Fund and $0.4 million Other Funds. The judges salary cost are $1.8 million General Fund for the biennium. Department of Administrative Services 1-i September 23, 2016
4 OREGON JUDICIAL DEPARTMENT Office of the State Court Administrator August 19, 2016 (SENT BY ) The Honorable Senator Peter Courtney, Co-Chair The Honorable Representative Tina Kotek, Co-Chair State Emergency Board 900 Court Street NE H-178 State Capitol Salem, OR Re: 2016 OJD Compensation Plan Changes Report for the Biennium Dear Co-Chairpersons: Nature of Request The Oregon Judicial Department (OJD) requests that you acknowledge receipt of this report on prospective OJD compensation plan changes for staff that are scheduled to take effect December 1, This report is made pursuant to ORS (1) which directs OJD to submit a report of any prospective changes to its compensation plan to the Legislative Assembly or an interim body before implementation. Although not part of the ORS requirement, this report also includes information on prospective changes to judicial compensation that will be made pursuant to ORS and an increase passed by 2016 Legislation. OJD Compensation Plan Actions - Staff The Chief Justice of the Oregon Supreme Court is the administrative head of the Oregon Judicial Department, the state-funded unified court system. ORS directs the Chief Justice to establish and maintain a personnel plan for OJD employees. The statewide OJD personnel plan includes the classification and compensation structure for OJD employees who are in the exempt service. Under ORS , the salary plan for exempt service employees must be in reasonable conformity with the general salary structure of the state. Past Action The executive branch (through DAS) reported in November 2015 on the planned compensation plan changes for the biennium for its represented state employees as determined by labor agreements. At that time, they also reported on the first year of cost-of-living adjustment (COLA), for executive branch management service and unrepresented employees, but deferred announcing the second year COLA percentage and timeline. In reasonable conformance, the Kingsley W. Click, State Court Administrator Supreme Court Building 1163 State Street Salem, Oregon FAX Oregon Relay Service - 711
5 The Honorable Senator Peter Courtney, Co-Chair The Honorable Representative Tina Kotek, Co-Chair Page 2 August 19, 2016 Chief Justice announced comparable first year (only) COLA changes for OJD staff, and, pursuant to law, a first year COLA to the judges compensation, as was reported by the Judicial Department to the November 2015 meeting of the Interim Ways and Means Committee. Prospective Action For the second year, in June of 2016, Governor Brown announced a 2.75 percent (COLA) for management service and unpresented employees to go into effect December 1, As a result, the Chief Justice has approved a commensurate level and timing of a 2.75 percent COLA for OJD employees effective December 1, 2016, payable January 1, The anticipated increase in cost associated with the staff 2.75 percent COLA is summarized below. Biennium General Fund Impact Other Funds Impact Biennium $1.7 million $111, Biennium $6.1 million $396,270 The change in contribution rate has been built into the Current Service Level (CSL) budget for OJD, and the COLA budget increase was part of additional appropriation and limitation granted during the 2016 Legislative Session for the biennium budget. Compensation Actions Judges Although the OJD Employee Compensation Plan does not apply to judges who are elected officials, OJD also is reporting upcoming changes in judicial compensation. These actions include one COLA made pursuant to ORS (text below) effective December 1, 2016, and a separate salary increase created by 2016 legislation, effective January 1, ORS provides: (1) Annual salaries of judges of the Supreme Court, the Court of Appeals, circuit courts and the Oregon Tax Court established under ORS , , and shall be adjusted to reflect the same percentage amount of any positive cost of living adjustment granted to employees in the management service in the executive department. (2) The adjustment described in subsection (1) of this section shall occur at the same time that salaries of employees in the management service in the executive department are adjusted. (3) As used in this section: (a) Executive department has the meaning given that term in ORS (b) Management service means the management service as provided in ORS As noted, Governor Brown has announced a 2.75 percent COLA for management service staff, effective December 1, 2016; therefore, by law, the annual salaries for judges will be increased by the same percentage amount (2.75 percent), effective the same date. The anticipated increase in cost associated with the judicial COLA is summarized below.
6 The Honorable Senator Peter Courtney, Co-Chair The Honorable Representative Tina Kotek, Co-Chair Page 3 August 19, 2016 Biennium General Fund Impact Biennium $.52 million Biennium $1.83 million Annual Judicial salaries also will increase by $5000 (total annual amount), effective January 1, 2017, from passage of legislation codified in Oregon Laws 2016, Chapter 118, Sections 11, 12, 13, 14 (SB 1597). The Legislature provided an additional Judicial Compensation General Fund Appropriation during the 2016 Legislative Session to finance both the COLA and salary increases. Action Requested The Oregon Judicial Department requests acknowledgment of this report as provided in ORS (1). Legislation Affected None. Sincerely, Kingsley W. Click State Court Administrator KC:DM:ma/16eKC014ma ec: Chief Justice Thomas A. Balmer David Moon, Director, Business and Fiscal Services Division, OJD John Fagan, Budget Manager, OJD Terrie Chandler, Director, Human Resources Services Division, OJD Phil Lemman, Legislative Communication Manager, OJD Ken Rocco, Legislative Fiscal Officer, LFO Steve Bender, Principal Legislative Analyst, LFO George Naughton, Chief Financial Officer, CFO Michelle Lisper, Policy and Budget Analyst, CFO-BAM
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