Senator Apa asked if there is an evaluation involved in the process when deciding if an employee has attained job worth. Ms. Jorgenson approached the committee and said, if an employee has issues they will receive a lesser percentage until they have addressed those issues.

Senator Dennert asked how many state employees have attained job worth. Ms. Zinter said that 53 percent of all state employees are at or above job worth.

Senator Dennert asked if there are any employees who are above the 120 percent maximum. Ms. Jorgenson said the only employees above the 120 percent maximum are those who have remained within the same position, but whose job responsibilities have changed and they receive additional compensation for the additional responsibilities they must perform.

Senator Koskan asked when an employee changes positions within state government if they begin at entry level pay. Ms. Jorgenson cited an example: if an employee with five years of employment with the state moves to another position within the state, they would most likely start out with a compensation level at or above the three-year job worth level.

Ms. Zinter explained the longevity payment plan and its purpose.

Representative Richter asked if an employee is given their longevity pay on their anniversary date. Ms. Zinter said yes.

Representative Klaudt asked how longevity pay was determined. Ms. Zinter stated that it was based on the number of years of service the employee has provided to the state.

Ms. Zinter explained the health insurance benefit plan. She stated that there is an increase of eleven percent in the FY2002 recommended budget for health insurance over FY2001.

Representative Adelstein asked if an increase in the retirees premiums would help to compensate for the additional budget needs. Mr. Kucker said that they could increase them, but it would be unfair to retirees.

Senator Apa asked what the premium cost differences are between employees, retirees and dependents. Ms. Zinter supplied the committee with Document #6 and Mr. Kucker explained the premium rates.

Senator Lange asked what the turnover percentage rate for all state employees is. Ms. Zinter said the average turnover rate is 13.8 percent.

Representative Richter said the committee is concerned with the pay scales used and asked if changing the pay grades would accomplish anything toward the improvement of pay for employees. Ms. Zinter stated that the Bureau of Personnel is looking at different ideas that are flexible alternatives.

Representative Richter asked how much leeway a department head has to change the pay grade for a new employee if that new employee has the ability to begin employment at higher than entry level. Ms. Zinter said a department head can change the pay rate by up to 25 percent without permission and if they feel it needs to be higher, they can ask the Bureau for permission to do so.

Senator Dennert asked if the Bureau conducts exit interviews to determine why an employee has terminated employment with the state. Ms. Zinter said the Bureau does conduct exit interviews.

Representative Richter asked for a summary of the reasons past employees have terminated their employment with the state.

Representative Lange asked how the state of South Dakota compared with its neighboring states in relation to state employee pay scale. Ms. Zinter cited a source that stated that South Dakota was ranked 39^th in the Union, Iowa is 9^th, Nebraska is 29^th, and Minnesota is 8^th.

Mr. Ken Melius, Executive Director, South Dakota Employee Organization, approached the committee. Mr. Melius said the state employees are very appreciative of Governor Janklow's three percent salary plan but they feel there is a need to increase the plan by one percent for those who are at or above job worth.

Mr. Paul Aylward, AFSCME, approached the committee and said the organization he represents feels that an across-the-board raise is preferable to a percentage raise in pay, but that they support the Governor's recommendation.

South Dakota Tobacco Plan

Ms. Deb Bowman, Commissioner, Governor's Office, approached the committee and explained the South Dakota Tobacco Plan Draft. She told of the history of the plan, and the mission and purpose of the plan.

Senator Drake asked if the state would be liable for medical emergencies pertaining to the distribution and use of cessation products. Ms. Bowman said she thinks a waiver of liability will be used.

Representative Adelstein asked how many cessation products will be given to any one individual. Ms. Bowman said things of that nature are still being discussed.

Senator Apa asked if the SD Tobacco Program is partnering with any of the hospitals to develop cessation programs. Ms. Bowman said that some are already in place and others are being developed.

Representative Adelstein asked why the Governor's Office, Department of Human Services, and the Department of Health have chosen not to lobby for certain bills addressing the use of tobacco. Ms. Bowman said she could not speak for the Governor's Office in that respect and she assumes that the Departments were instructed by administration not to do so.

Representative Richter asked if the Governor and the Tobacco Advisory Board are open to suggestion from Legislators on revising the program. Ms. Bowman said the Governor and the Board would be more than willing to discuss the program and its various portions.

Representative Richter asked why the program was placed within DHS. Ms. Bowman said DHS has the Division of Drugs and Alcohol.