Week 10 in Juneau: Backburner bills and budget items
JUNEAU — It’s a different year for state legislators now in session in the state capital.
People are very occupied with budget issues and the state’s financial crisis but it is also proving to be a productive time to work on other issues, things that can save money.
A lot of these are small things. In a previous Legislature, when there was lots of money, these bills would fall through the cracks because people were busy with other legislation or chasing capital budget appropriations.
But they are worthy things. Case in point is Senate Bill 101, a governor’s bill that, as originally introduced, would allow the state Division of Parks and Recreation to sell items like T-shirts and other merchandise with the park name and logo.
Most states that have state park systems do this, Ben Ellis, the state park director, told the Senate Finance Committee recently. It has proven to be a good moneymaker to help those parks defray expenses. Georgia, for example, clears a $3 million annual profit on its sales of park memorabilia, Ellis said.
Ed Fogels, Deputy Commissioner of Natural Resources, said the park division is now about 40 percent self-funded through campsite fees, and if the Legislature OKs sales of merchandise the parks should be 100 percent self-funded. That’s really good news in these tight budget times, and it might help ensure more frequent servicing at those porta-potties in the roadside campgrounds.
The Parks Division budget is about $3 million, in terms of unrestricted state funds. But while the concept behind the bill is widely supported it’s a back-burner issue for many legislators, and the parks merchandise part of SB 101 could easily fall through the cracks.
The bill was introduced in January 2015, but members of the Senate Resources Committee, which worked on the bill last April, a year ago, worried that the parks’ merchandise sales would complete with the private sector and took the section allowing those sales out of the bill. Left in the bill is language that addresses other issues.
The department said those concerns have now been addressed, however, and the provision may be added back in the Finance committee. A version of the bill in the state House, House Bill 184, was also introduced in January 2015 and has been in the House Resources Committee, its first committee of referral, since last April.
On the Finance committee Sen. Peter Micciche, R-Soldotna, said he hopes the division could employ Alaskan designers and manufacturers in creating the merchandise rather than have it designed out of the state and made overseas like other Alaska-themed merchandise seen in tourist shops.
Another bill of a similar vein is Sen. Cathy Giessel’s SB 170, which would allow the Geologic Materials Center operated by the Division of Geology and Geophysical Services to charge private companies using the facility to do research on oil well cores and other geologic samples stored there.
Most states with geologic materials centers charge companies an admission fee and the income from those helps defray expenses. There’s no reason why Alaska should be different, Giessel told the Senate Finance Committee in a hearing on the bill.
For oil and gas companies looking to explore in Alaska the DGGS Materials Center is the first stop for geologists beginning their research, Giessel said. Repsol, a Spain-based major oil company, for example, made good use of the center when it was first investigating prospects in Alaska.
$30M proposed for substance abuse treatment
On the budget front, there are small and not-so-small initiatives that are happening that don’t get noticed with all the noise about the big budget cuts. An example is a proposal by Rep. Mark Neuman, R-Big Lake, who as cochair of the House Finance Committee must supervise the budget whacking, for an actual increase in funding for alcohol treatment.
Neuman proposed $30 million over four years to help fill in gaps in alcohol treatment facilities statewide. This will actually save money for the state, Neuman argues, because without it there will be more spending in the justice system, from troopers and courts to prisons, which are already heavily burdened by alcohol-related crimes.
“Ninety percent of the cases in the court in Palmer are related to alcohol and drugs. People just don’t feel safe anymore,” Neuman said in an interview. “The important thing is to get people into treatment as soon as they are arrested, even while they’re still in jail. The prison system has authority to do this but there’s no money for the treatment.
“Troopers tell me that in most cases offenders feel real remorse over what they’ve done (while intoxicated) but there’s nothing that can be done,” to help break the cycle.
“Judges are sympathetic in ordering treatment in lieu of jail-time, but there are no beds available in treatment centers,” Neuman said.
After release, the offender is often on the streets, sometimes homeless, and the process is repeated, at huge cost to the state.
“It costs $55,000 a year to keep someone in prison. Treatment costs $3,500 to $5,000,” Neuman said, so without treating the reasons why people are recycling through the justice system the state is just squandering money. Neuman has long been concerned, on the Finance committee, with the problem of recidivism in the prison system, most of it related to recurring crimes related to alcohol and drug use.
Jeff Jesse, executive director of the Alaska Mental Health Trust Authority, which is active in promoting behavioral health treatment, praised Neuman’s initiative.
“Even in tight budget times, some legislators are really able to connect the dots and see the connection between spending a little now and saving a lot later,” he said.
Neuman said another reason for improved treatment is to take the pressure off the state troopers who are on the front line in dealing with people who alcohol and other substances, and who commit crimes.
“We have to reduce the work load for these people. We’re cutting their budgets but we’re not reducing their work,” he said.
Keeping up morale and retaining good people is important.
“It’s of the highest importance that these people (troopers) can go home safe,” after work, Neuman said.
The appropriation isn’t a done deal, of course. It is in the House version of the state operating budget but not in the Senate’s. The two budgets are reconciled in a House-Senate conference committee, which will convene in April. Neuman will almost certainly be a member of the conference committee but he will have to argue the merits of the appropriate to convince the Senate’s conferees.
Tax credits, Medicaid, Fund earnings
On other matters, House and Senate committee pressed full-bore on major bills last week. After weeks of hearings the House Resources Committee reported out a rewritten version of the governor’s House Bill 247, revamping the state’s oil gas tax credit bill. The committee took out a controversial section that raised North Slope oil producers’ minimum tax on gross revenues from 4 percent to 5 percent and restructured other parts of the bill.
Industry tax credit revisions for Cook Inlet, a prime goal for the governor, were retained but eased compared with what Walker wanted. Some incentives that the governor wanted ended are instead phased out over several years. The bill is now in the House Finance Committee, which was due to start work on it in the latter part of the week.
The House Finance Committee also spent several days of hearings on Senate Bill 74, the Medicaid reform bill passed by the Senate the previous week. One hearing last week was devoted to Medicaid anti-fraud provisions in the bill, another to curbing overuse of hospital emergency rooms, and a third hearing focused on managed care provisions in the senate bill.
Meanwhile, the Senate Finance Committee held several hearings on proposals to restructure use of Permanent Fund earnings to help ease the state budget crisis. Before the committee were SB 114, by Sen. Leisel McGuire, R-Anchorage, and SB 128, a governor’s bill. The committee also held two sessions of public hearings on the proposals.
In another development, Senate Resources Committee moved out HB 100, House Speaker Mike Chenault’s “Agrium” bill. The legislative provides for Agrium to apply certain expenses against the state corporate income tax if the company restarts its closed fertilizer plant near Kenai.
Unlike other industry tax credit programs provided by the state, this would be effective only if Agrium actually restarts the plant. Chenault argues that the company’s purchases of natural gas would result in additional state royalties and taxes from gas production more than offsetting the tax credit Agrium would receive.
The bill is now in Senate Finance.
Tim Bradner is a correspondent for the Journal. He can be reached at [email protected].