Legislature(2011 - 2012)Anch LIO Rm 220
07/19/2011 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| Presentations on Ways to Increase Efficiency and Effectiveness of Alaska's State Government | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
July 19, 2011
9:07 a.m.
MEMBERS PRESENT
Senator Bill Wielechowski, Chair
Senator Joe Paskvan, Vice Chair
Senator Kevin Meyer
MEMBERS ABSENT
Senator Albert Kookesh
Senator Cathy Giessel
OTHER LEGISLATORS PRESENT
Senator Linda Menard
Representative Mike Hawker
Representative Sharon Cissna
Representative Paul Seaton - via teleconference
COMMITTEE CALENDAR
Presentations on ways to increase efficiency and effectiveness
of Alaska's state government
- HEARD
WITNESS REGISTER
CURTIS THAYER, Deputy Commissioner
Department of Commerce, Community and Economic Development
Anchorage, AK
POSITION STATEMENT: Presented ways the department could find
efficiencies.
DANIEL S. SULLIVAN, Commissioner
Department of Natural Resources
Anchorage, AK
POSITION STATEMENT: Presented ways the department could find
efficiencies.
MARK LUIKEN, Commissioner
Department of Transportation and Public Facilities
Anchorage, AK
POSITION STATEMENT: Presented ways the department could find
efficiencies.
BRUCE TANGEMAN, Deputy Commissioner
Department of Revenue
Anchorage, AK
POSITION STATEMENT: Presented ways the department could find
efficiencies.
JERRY BURNETT, Deputy Commissioner
Division of Treasury
Department of Revenue
Juneau, AK
POSITION STATEMENT: Presented ways the department could find
efficiencies.
JOHN SPALDING, representing himself
Anchorage, AK
POSITION STATEMENT: Testified that legislators should forget
about buying property in downtown Anchorage and instead move
their offices to the airport.
BREEHIA MITCHELL, representing herself
Juneau, AK
POSITION STATEMENT: Provided a personal example illustrating
inefficiency in state government.
LYNN WILLIS, representing himself
Anchorage, AK
POSITION STATEMENT: Suggested the Legislature vet the budget
during the Interim.
BARBARA WINLKEY, representing herself
Anchorage, AK
POSITION STATEMENT: Provided examples of waste, including
special legislative sessions.
JERRY LAVINE, representing himself
Anchorage, AK
POSITION STATEMENT: Testified that the Legislature was one of
the inefficiencies of state government.
PAUL D. KENDALL, representing himself
Anchorage, AK
POSITION STATEMENT: Testified that more meetings of this type
were needed to provide time to go into detail and settle
problems or gripe about government in a constructive manner.
BARBARA LESSMEIER, representing herself
Anchorage, AK
POSITION STATEMENT: Described inefficiencies in the state run
job centers in Anchorage.
LEWIS DAVIS, representing himself
Anchorage, AK
POSITION STATEMENT: Testified that he's seen lots of waste in
state government and believes that many state employees are
overpaid.
JOHN FARLEIGH, representing himself
Anchorage, AK
POSITION STATEMENT: Testified that the state could be more
efficient if it developed its own healthcare system.
THERESA OBERMEYER, representing herself
Anchorage, AK
POSITION STATEMENT: Encouraged all legislators to travel to
Norway to look at that permanent fund.
ACTION NARRATIVE
9:07:10 AM
CHAIR BILL WIELECHOWSKI called the Senate State Affairs Standing
Committee meeting to order at 9:07 a.m. Present at the call to
order were Senators Menard, Meyer and Chair Wielechowski.
^Presentations on ways to increase efficiency and effectiveness
of Alaska's state government
CHAIR WIELECHOWSKI said the committee would hear presentations
from the commissioners of the departments of commerce, natural
resources, transportation, and revenue on efficiencies and
effectiveness in state government. He noted that a core
responsibility of legislators is to ensure that public dollars
are spent wisely. From time-to-time it's necessary to step back
to assess whether or not there are more efficient and effective
ways of accomplishing this task.
CHAIR WIELECHOWSKI related that earlier this year the Institute
of Social and Economic Research for the University of Alaska
Anchorage (UAA) reported that Alaska's current level of spending
was not sustainable. The report noted that oil production, which
is the base of state government, is in decline. It is therefore
time, while the revenue stream is strong, to look at state
government programs and services and consider new ways to
harness technology to serve Alaskans more effectively and extend
the reach of the state budget. He encouraged Alaskans to submit
their ideas on accomplishing this task on the website:
stateofAlaska.aksenate.org.
CHAIR WIELECHOWSKI explained that each of the commissioners were
asked to describe three to five ways that the efficiency and
effectiveness of their department could be improved and to
identify any statutory changes needed to implement the suggested
improvements.
CURTIS THAYER, Deputy Commissioner, Department of Commerce,
Community and Economic Development (DCCED), stated that he would
speak on behalf of the department today because Commissioner
Bell was delayed after touring the Healy Clean Coal Plant.
9:10:18 AM
MR. THAYER stated that DCCED has the constitutional
responsibility to review community activities, collect and
publish local government information, and assist local
government in managerial functions. This is accomplished by
promoting healthy economies and strong communities. DCCED is
committed to knocking down barriers to increase communication
and efficiency.
DCCED regulates banking and securities, corporations through
professional and business licensing, the insurance industry, and
public utilities through the Regulatory Commission of Alaska
(RCA). DCCED assists local governments and unincorporated
communities with grants, technical assistance, financial and
utility management, and planning and energy management,
primarily through the Division of Community and Regional
Affairs. DCCED has programs aimed at key economic sectors such
as electrical power generation through the Alaska Energy
Authority (AEA), tourism, mining, fishing, and aerospace.
MR. THAYER said DCCED used $12 million that was in the capital
budget to conduct a marketing program for the state in lieu of a
qualified trade association. DCCED is working with ATIA to look
for a good governance structure and the ideal marketing
structure. To date they have assumed five contracts.
DCCED is working with other departments to leverage the state's
current investments in agriculture, mining, seafood, tourism,
forest products, film, and other industries. This cohesive
approach provides a broad perspective to partner for media
outreach and to respond to trade and consumer inquiries.
9:14:01 AM
MR. THAYER said DCRA staff and the Division of Administrative
Services were proactive in developing efficiencies, which made
it possible to immediately send revenue-sharing checks to
communities once the bill became effective on July 1. That high
bar is expected to continue. Streamlining the form and
turnaround time for grants under $50,000 is an efficiency that
will leave more time to review requirements on million dollar
grants. This helps the grant recipient and provides good
stewardship of the state's money, he said.
REPRESENTATIVE CISSNA observed that since the Division of
Community and Regional Affairs was brought under DCCED about
eight years ago, she's seen a disconnect in how communities
function and survive in terms of commerce. She asked if DCCED
had conversations about bridging that paradigm to ensure that
rural Alaska is developed at home where both the resources and
people are located.
MR. THAYER replied the conversations are ongoing and
perspectives differ. Since the Legislature combined the two
departments to form the current DCCED, some people have said
there is too much focus on commerce and others believe there is
too much focus on rural Alaska. The DCCED perspective is that
there can never be too much emphasis on either. He explained
that the director of DCRA is a 27-year employee who is very
involved in rural Alaska. He brought the idea of expedited
revenue sharing forward and now it's a department priority.
DCCED provides regional assistance through the legislatively
established Alaska Regional Economic Assistance Program known as
the ARDOR program to provide economic hubs statewide. DCRA now
travels to rural Alaska more frequently to identify problems.
For example, the community of Newtok worked with DCRA, DOTPF and
the military to relocate out of a flood plain to a nearby area.
This was a community-driven program and those opportunities
exist across rural Alaska. The department is also working on the
Connect Alaska project to conduct a broadband inventory of rural
areas.
9:20:15 AM
DCCED is working with the Department of Transportation and
Public Facilities (DOTPF) and the Department of Military &
Veterans Affairs (DMVA) to encourage filming at Kulis Air Force
Base. A bill making its way through the House provides an
incentive to film in rural Alaska.
Forty five states have a research and development tax credit to
attract business and encourage it to stay. Alaska does not offer
an R&D tax credit, but perhaps it should for the business
community.
CHAIR WIELECHOWSKI recognized that Representative Hawker was in
the audience.
9:22:03 AM
MR. THAYER said DCCED has also worked on revolving loan funds to
help coastal communities in rural Alaska develop a shellfish
industry. This type of program has been very successful in
Canada. Another revolving loan fund is working to bring 300
commercial charter fishing operators back to work after being
forced out of the charter industry due to federal regulations.
The department wants Alaskans to own and operate charter boats.
A third bill making its way through the process provides small
loans, up to $35,000, for small businesses struggling to
operate. The banking association supports these bills because
they don't compete with the private sector.
SENATOR PASKVAN joined committee.
MR. THAYER said DCCED did an inventory and found it had 25
outstanding pending regulations. All division directors were
asked to review those and several have since been closed. The
ones that need to move forward are being implemented into
regulation.
SENATOR MENARD asked for examples of pending regulations that
were closed.
MR. THAYER replied many of the older ones were with the
Regulatory Commission of Alaska (RCA) dealing with electrical
utilities and purchasing power agreements. He noted that some
regulations for corporations haven't been updated for 30 years.
The department is currently working with corporations to
identify the process for complaints. That is out for a 30-day
comment period. After that is complete they'll look further at
the regulation package within the Division of Banking and
Securities.
9:25:46 AM
CHAIR WIELECHOWSKI asked if legislation was needed to help the
department become more efficient.
MR. THAYER replied he didn't have anything to suggest with
regard to regulations but there is an issue with the travel
budget for the 20 boards under the Division of Corporations,
Business, and Professional Licensing. The various boards have
projected a $550,000 travel budget but the division only has
$275,000 to allocate to board travel.
9:28:50 AM
CHAIR WIELECHOWSKI asked if there's a reason that only nine
programs within this division offer online licensing renewal.
MR. THAYER replied the division is trying to implement online
license renewals for all boards.
SENATOR MENARD asked if DCCED is looking at consolidation to
limit the number of boards.
MR. THAYER replied it's a worthwhile conversation to entertain
with the Legislature.
9:31:33 AM
CHAIR WIELECHOWSKI asked if it's possible to use video
conferencing or Skype for at least some of the meetings.
MR. THAYER replied video conferencing is done when possible, but
some boards are required to meet in person. He added that he
would look into whether those requirements are statutory or
regulatory.
REPRESENTATIVE CISSNA questioned why there should be such a
requirement when technology has taken such leaps and the state
has worked so hard to ensure that new technology is used in
state government and the Legislature.
MR. THAYER acknowledged that current technology wasn't
contemplated when some of the regulations were implemented, but
teleconferencing is encouraged whenever possible.
CHAIR WIELECHOWSKI asked if there is potential for the Alaska
Office of Tourism and Development to redirect funds so that the
500,000 travel brochures it sends out annually target people
that are more likely to visit the state. In some instances the
return is as low as one percent.
9:34:05 AM
MR. THAYER replied it's worth looking at but those measures were
made under different commissioners and administrations and it's
probably time to develop different and stronger metrics.
SENATOR MENARD asked if he'd had an opportunity to look at the
Save Alaska website that Senator Wielechowski mentioned earlier.
MR. THAYER answered no.
9:35:43 AM
CHAIR WIELECHOWSKI thanked Deputy Commissioner Thayer and
announced that Commissioner Sullivan would deliver the next
presentation.
9:35:53 AM
DANIEL S. SULLIVAN, Commissioner, Department of Natural
Resources (DNR), thanked the committee for the opportunity to
discuss efficiencies. He reminded the members that DNR's
mission, which is embedded in the state constitution, focuses on
maximizing resource development in the public interest. While
the primary source of revenue comes from petroleum development,
the department continues to look at the overall and vast
resource development potential and it frequently looks at
efficiencies and effectiveness.
COMMISSIONER SULLIVAN said he would discuss three areas:
permitting, oil and gas leasing, and the GAP analysis regarding
oversight of oil and gas activity in the state. He noted that
DNR and the Legislature have a good working relationship and
that the committee has probably already heard some of the
information he will present.
9:38:46 AM
COMMISSIONER SULLIVAN said he and the Governor agree that the
state permitting system could be improved in a number of ways.
He noted his office has a "monster" poster board that
illustrates the necessary steps with regard to local, state, and
federal agencies in order to drill an oil and gas well. The
department is looking at that cumbersome process and the backlog
of permits that numbered 2,500 last winter. This is unacceptable
and it's choking private sector development and jobs, both of
which are critically important to the state.
Permitting efficiencies are focused in four areas: 1) ridding
the backlog in three years; 2) new hires in mining, land and
water; 3) evaluating the current system to improve efficiencies,
timeliness and certainty, then presenting a regulatory and
statutory package of changes to the Governor and Legislature;
and 4) improving permitting coordination with the federal
government.
9:41:16 AM
SENATOR PASKVAN asked if it is DNR's policy to require permit
applicants to pay for department staff travel and expenses in
order for permits to be processed.
COMMISSIONER SULLIVAN replied the answer is complicated. The
office of large project management and permitting (OPMP) is
designed as a one-stop shop for permitting of major projects
statewide. It has a single point of contact with representatives
from different agencies and is considered to be an efficient
model that could possibly be used for federal permitting,
particularly for mining on federal lands. Currently the average
time to permit a mine on federal land is 8-10 years compared to
2-3 years in Australia. Large companies can choose the OPMP
model and those that make that choice pay a fee that relates to
funding the OPMP activity. Companies that don't use the OPMP
model don't have to pay a fee.
9:43:29 AM
SENATOR PASKVAN asked what DNR's standard policy is regarding
applicants paying for staff travel.
COMMISSIONER SULLIVAN replied he would get back to him with more
specifics with regard to questions about travel.
SENATOR PASKVAN said his concern is whether DNR has a sufficient
budget to handle the permitting process without having to ask
applicants to pay for travel expenses up front. He questioned
whether there is a policy applicants can look to in order to
know what the entire process will cost.
COMMISSIONER SULLIVAN replied he would get back to him with more
details.
REPRESENTATIVE CISSNA said she'd like to see the state diversify
from its oil and gas focus. Recalling that 40 years ago there
was interest in developing park fringes for recreation, she
asked if DNR had looked at featuring tourism and having
concessionaires at the parks to attract more people.
COMMISSIONER SULLIVAN replied he told Ben Ellis, the new parks
director, that DNR's goal is to make state parks the pride of
all Alaskans. The idea is to think outside the box and focus on
public/private partnerships. There are no specific regulations
in this regard.
9:48:33 AM
SENATOR MEYER asked him to comment on the success of the recent
Cook Inlet lease and to discuss ideas for expediting the long
permitting process.
COMMISSIONER SULLIVAN relied the Cook Inlet lease was successful
because the tax structure is very competitive. He noted that the
second area of his presentation relates to increasing
participation in oil and gas leasing and accelerating
development. Cook Inlet provides some examples. The Governor's
goal for one million barrels of oil production per day through
the Trans Alaska Pipeline System (TAPS) within a decade involves
a comprehensive five-part strategy. The fifth part focuses on
promoting Alaska. DNR can do a better job in this area than it
has in the past, he said.
From a policy perspective there's been some progress, he said.
He and the Governor have written letters and spent time in
Washington D.C. emphasizing the importance of developing
hydrocarbons in Alaska, and the Governor's million-barrel goal
complements a goal that President Obama laid out to reduce U.S.
oil imports by one-third.
COMMISSIONER SULLIVAN said he's also focused on telling the
story about Alaska geology and its potential for oil and gas
production. He met with some of the larger companies that bid on
the Cook Inlet sale to talk about the lease terms and
development potential and the USGS actually confirmed the
state's aggressive view.
With regard to accelerating development, he said it's key to
balance aggressive lease terms with shorter lag times. The lease
terms on the Cosmopolitan Unit were very aggressive and
accelerated and that was possible because it was well known that
significant quantities of oil were under those leases. In this
case DNR struck a decent balance and learned something in the
process, he stated.
CHAIR WIELECHOWSKI noted that Representative Seaton was
attending via teleconference.
9:55:08 AM
SENATOR PASKVAN asked what progress the state had made in the
review of the terms and conditions for shale oil development in
Alaska and the lease that's coming up this fall.
COMMISSIONER SULLIVAN replied DNR has formed an internal task
force to look at the unique issues of shale oil development
related to leases, terms, unitization, infrastructure, and water
usage. He and his team have met with their counterparts in North
Dakota on the regulatory issues that that state has had to deal
with in an effort to get ahead of them. DNR hopes to be
proactive in establishing regulations in order to achieve the
goal of facilitating responsible development.
9:58:46 AM
CHAIR WIELECHOWSKI opined that DNR is a little different than
other departments in that it gets what it needs because DNR
helps provide 90 percent of the state revenue. He asked if the
Legislature could do things to make DNR's permitting process
more efficient and to encourage more responsible development
throughout Alaska.
COMMISSIONER SULLIVAN said he didn't have specifics, but the
goal on permitting would be to have a package of regulatory and
statutory changes to present to governor's office and ideally
present it to the Legislature next session.
SENATOR PASKVAN asked if permit applications are increasing or
stable relative to prior years, and if they're increasing how
the Legislature can potentially address the backlog through the
budgeting process.
COMMISSIONER SULLIVAN explained that the backlog builds up
because DNR is able to handle just 85 percent to 90 percent of
incoming applications each year. To get rid of the backlog
they'll have to increase that to 100 percent or 110 percent per
year. Because of the budget increment, DNR will be able to hire
30 positions in mining, land, and water; 9 positions have been
filled and the rest should be filled by September.
SENATOR MENARD asked if DNR hired any of the employees that lost
their jobs when the Coastal Zone Management Program shut down.
COMMISSIONER SULLIVAN answered yes; some were hired, some went
into other areas of state service, and some are still looking
for another job.
CHAIR WIELECHOWSKI asked if there was any area in the department
where spending could be reined in or cut.
COMMISSIONER SULLIVAN replied he didn't have specifics, but
that's something that's consistently under review.
CHAIR WIELECHOWSKI asked him to coordinate with Michelle Sydeman
to keep the committee informed.
REPRESENTATIVE SEATON asked what DNR's policy was with regard to
allowing agencies to openly provide information and if the
Legislature might have to begin to fund research and analysis
independent of relying on the department.
COMMISSIONER SULLIVAN replied he initially told his directors
and staff that a big part of their duty was to work closely with
legislative offices and everyone has stuck by that commitment.
REPRESENTATIVE SEATON said he was concerned about the May 7 Fish
and Game memo on external reviews and the June 10 statement from
the Department of Health and Social Services (DHSS) about the
change in policy that seems to prevent information gathering or
analysis before checking to see that it supports an
administration policy position. He asked to be informed if DNR
has to change its method of operation with regard to the free
flow of information.
COMMISSIONER SULLIVAN added that DNR has been trying to get the
federal government to use more of the department's information,
particularly in resource development issues.
10:13:33 AM
REPRESENTATIVE CISSNA said she'd like DNR to increase its use of
videoconferencing so that local knowledge gets into the picture,
particularly in light of the fact that the Coastal Zone
Management Program was shut down. She asked what he's doing to
ensure that that voice isn't lost altogether.
COMMISSIONER SULLIVAN said he agrees that local knowledge and
input if extremely important. He added that he and his deputy
commissioners have been to Barrow a number of times in the last
six months, mostly to listen. They'll continue to do that, he
said.
CHAIR WIELECHOWSKI thanked Commissioner Sullivan. He welcomed
Commissioner Luiken and asked him to tell the committee about
three to five ways to improve the efficiency and effectiveness
of the Department of Transportation and Public Facilities
(DOTPF) and if any statutory changes would be needed to
implement those improvements.
10:16:22 AM
MARK LUIKEN, Commissioner, Department of Transportation and
Public Facilities (DOTPF), said this was one of the topics the
DOTPF leadership team undertook in early June. Staff is
currently looking at ways to find efficiencies in the
maintenance and operation of the department's infrastructure.
CHAIR WIELECHOWSKI asked the size of the department's fuel
budget.
COMMISSIONER LUIKEN estimated it was in the millions and offered
to follow up to provide the exact number.
CHAIR WIELECHOWSKI mentioned legislation that passed two years
ago and asked what progress the department had made to supply
the state fleet with natural gas.
COMMISSIONER LUIKEN offered to follow up to provide details on
whether or not the department had acquired any vehicles. He said
they have learned that much of the fuel usage in state vehicles
is spent idling. Where appropriate, they intend to use
technology to automatically shut a vehicle off if it has idled
more than 10 minutes. That alone could potentially save 30
percent on the fuel bills so that is an efficiency the
department plans to implement.
CHAIR WIELECHOWSKI noted that legislation passed several years
ago to increase efficiency in 25 percent of public facilities;
he asked how much that might save and if he thought more savings
might be achieved.
COMMISSIONER LUIKEN replied energy efficiencies are being
designed into new structures and while 25 percent is the goal,
there will likely be a cost benefit issue in trying to make the
older facilities more efficient.
CHAIR WIELECHOWSKI asked if thermostats in public buildings are
turned down at night.
COMMISSIONER LUIKEN replied the high efficiency systems are
computerized and would be programed to turn down at night.
CHAIR WIELECHOWSKI asked if automatic lights are used and if
computers are turned off at night.
COMMISSIONER LUIKEN replied he hadn't looked at it recently but
last year the department provided a report to the Legislature as
to what policies would be implemented.
SENATOR MENARD asked if part of DOTPF's strategic planning
included looking at what other states are doing to be more
efficient.
COMMISSIONER LUIKEN replied he asked the leadership team to find
and benchmark best practices from across the U.S.
10:24:21 AM
SENATOR PASKVAN referenced a slide that indicated that 29 miles
of National Highway System (NHS) roads meet department standards
and asked how many NHS miles do not meet standards.
COMMISSIONER LUIKEN explained that that was the number of miles
that were added to the system in a single year. He added that
the slide wasn't part of the presentation; it was an example of
what DOTPF is doing to measure its progress.
SENATOR PASKVAN asked if a road that does meet department
standards can be maintained more efficiency than if it doesn't
meet department standards.
COMMISSIONER LUIKEN said yes.
SENATOR PASKVAN asked what the cost savings would be in terms of
lower maintenance if all roads were brought up to department
standards.
COMMISSIONER LUIKEN replied that is a good example of other
measures the department could take that would ultimately save
money.
10:27:36 AM
CHAIR WIELECHOWSKI asked if there's a way to improve the quality
of asphalt to make the roads last longer.
COMMISSIONER LUIKEN replied DOTPF employees that work with
materials are continually looking for the right mix to create a
lasting surface. But the mix that works in one place won't
necessarily work in another part of the state.
CHAIR WIELECHOWSKI asked if they're looking at other northern
latitude countries like Sweden and Finland.
COMMISSIONER LUIKEN answered yes.
SENATOR PASKVAN asked if the DOTPF employees that work with
materials had coordinated with Fairbanks city employees to look
at the application of polymers for Alaska roadways.
COMMISSIONER LUIKEN replied was likely a coordinated effort with
DOTPF if the City of Fairbanks was working with the university
transportation center.
CHAIR WIELECHOWSKI asked if there's a bottleneck in the process
that causes road projects to be delayed year after year. He
noted that there are several project delays in his district.
COMMISSIONER LUIKEN replied there would be a partial answer
farther along in the brief.
10:30:35 AM
COMMISSIONER LUIKEN said the slide titled Alaska Highway Trust
Fund Receipts shows the total federal aid the state has received
for highways since 2004. Looking beyond 2012 indicates that
federal funding will be less in the future, perhaps as much as
one-third less than in past years.
COMMISSIONER LUIKEN said statehood in 1959, the 1964 earthquake,
and the [Fairbanks] flood of 1967 impacted the state's ability
to build a transportation plan and infrastructure. Then the
Environmental Protection Act passed in 1969 and federal
regulations on the development of infrastructure grew
exponentially nationwide. As a state, Alaska has been
significantly burdened as it has worked through the federal
process to develop its infrastructure, he stated.
CHAIR WIELECHOWSKI asked if DOTPF tracks and prioritizes the
grants that leverage more federal dollars.
COMMISSIONER LUIKEN said basically yes, but ultimately it's a
federal process in which the money comes through FHWA, the
Federal-Aid highway funds. That being said, DOTPF is looking at
its internal process and regulations in an effort to deliver
projects more quickly. They've found that state general funding
(GF) is the way to leverage for difficult road projects. This
can save upwards of 60 percent on the time it takes to deliver a
project and at least a third of the cost of permitting. He
displayed a graphic depicting the cost/time elements for the
federal and state processes.
10:33:50 AM
COMMISSIONER LUIKEN said DOTPF is continuing to look at ways to
increase efficiencies in the Alaska Marine Highway System and
reduce the state contribution. For example, seven vessels use a
fuel management system that reduces fuel consumption by as much
as 12 percent on long transits and one more vessel will be
outfitted with the control. This will result in a meaningful
cost savings. A new marketing and reservation system is in
process and will increase efficiency by standardizing ticket
sales and optimizing routes based on demand. Finally, taking
more time to plan and forecast the budget will result in a more
accurate schedule prior to the upcoming season.
COMMISSIONER LUIKEN said that finding opportunities for
efficiencies was one of the main themes when DOTPF put together
its strategic plan. That plan will be posted on the department's
website in the next week or so and everyone will be able to see
what they're proposing.
10:38:01 AM
SENATOR PASKVAN pointed out that in the Interior the Alaska
State Troopers (AST) and the Division of Motor Vehicles (DMV)
are housed in facilities that are not handicap accessible. He
asked how many other public facilities statewide are similarly
inefficient in terms of accessibility.
COMMISSIONER LUIKEN offered to follow up and get the number, but
new facilities, vessels, and all renovations are designed to
meet federal mandates for handicap accessibility.
SENATOR PASKVAN asked when the public could expect the AST and
DMV building to be retrofitted so that it is handicap
accessible.
CHAIR WIELECHOWSKI said he too would like that information. He
then asked if DOTPF measures the performance of entities that
receive public funding to see that the state is getting the most
bang for the buck.
COMMISSIONER LUIKEN answered yes; regularly measuring
performance is part of the department's mandate and process for
both state and federal funding.
CHAIR WIELECHOWSKI asked if anyone is following up on the
February 2010 coordinated transportation taskforce
recommendation to develop a statewide database to monitor
funding and to evaluate effectiveness of state funding projects.
COMMISSIONER LUIKEN answered yes; before his tenure DOTPF asked
for and received funding to do that.
10:42:50 AM
CHAIR WIELECHOWSKI asked if DOTPF has a similar process for
harbors as the one it has for classifying roads and identifying
maintenance needs.
COMMISSIONER LUIKEN replied he wasn't aware of one, but he would
find out and provide a more complete answer.
SENATOR MENARD commented that the people of the MatSu Borough
appreciate the attention that's focused on the highway safety
corridors.
CHAIR WIELECHOWSKI thanked Commissioner Luiken. He welcomed
Deputy Commissioner Tangeman and asked him to tell the committee
about three to five ways to improve the efficiency and
effectiveness of the Department of Revenue and if any statutory
changes would be needed to implement those improvements.
10:44:16 AM
BRUCE TANGEMAN, Deputy Commissioner, Department of Revenue
(DOR), said Jerry Burnett would address the question from the
treasury perspective.
10:45:55 AM
JERRY BURNETT, Deputy Commissioner, Division of Treasury,
Department of Revenue (DOR), informed the committee that the
Permanent Fund Dividend Division has done a number of things to
increase efficiency. Online filing and direct deposits have
increased the past several years and last year because of
increased automation all the direct deposits and regularly
scheduled check payments were made at the same time. This year a
phone queue was put in place so that callers can receive an
automatic call back when a division employee is available rather
than spending time on hold. Because of automation, fewer people
work in the division, programs like "Pick. Click. Give." have
been added, and there's been time to follow up on more cases in
terms of fraud investigation. Employees are also being trained
to maintain and improve the system, and hopefully provide more
information thereby reducing constituent complaints to
legislators. To improve effectiveness, unsuccessful PFD
applicants now get a personal phone call to help solve the
problem. This has reduced the number of appeals by 70 percent
from two years ago. Some training is needed each year, but
improvements and automation are expected to continue.
10:49:37 AM
MR. BURNETT said about one in five Alaskans is affected by child
support. The current system is federally approved and funded
with two-thirds federal and one-third state dollars. The Child
Support Services Division has begun planning for a new
information system, which will take several years to go through
the planning and federal approval process. He noted that over
the next several years DOR will probably ask the Legislature to
invest in this new system.
He said that while the child support caseload has remained
relatively flat over the last 10 years, the number of employees
has dropped from 339 in 2004 to 228 today. Collections have gone
up year-after-year except FY10, and that's because collections
were way up in 2009 when the PFD was $3,200. As technology
improves the division could possibly do even better, he stated.
10:51:56 AM
MR. BURNETT reported that over the past six years the Treasury
Division has increased the money under its management from $20
billion to $40 billion. In the last two to three years treasury
has usually had more money under management than the permanent
fund. He predicted that ongoing training, continuing to certify
financial analysts, and in-house management would continue to
increase efficiency and effectiveness in the division. For
example, five staff manages between $18 billion and $19 billion
in the fixed income pool at a total cost of about $1 million;
whereas a typical fee for a large account, fixed income money
manager would be $15 million. At the same time the division is
exceeding benchmarks nearly every year. In fact, the FY10
missions and measures and results show that nine of ten of the
funds that were measured exceeded their benchmarks. In the
future there are plans to bring some indexed equities in-house.
This will provide the opportunity to save millions of dollars
without reducing investment results.
10:54:12 AM
MR. BURNETT explained that at their custodial bank they've been
getting monthly pricing of their assets and they're working
toward true daily pricing so they can receive immediate
feedback. The managers will then be able to measure their
performance in real time and work to get a better yield for the
State of Alaska.
CHAIR WIELECHOWSKI asked if PFD fraud is increasing or
decreasing and what steps the department was taking to address
the issue.
MR. BURNETT said he believes that fraud has decreased, but he
would defer to Mr. Tangeman to discuss that because
investigators from the divisions of tax, child support, and the
permanent fund now work as a cohesive unit that reports to him.
MR. TANGEMAN informed the committee that the goal of the new
Criminal Investigation Unit was to bring the different
investigators within DOR under one roof to find efficiencies.
Although the responsibilities and duties of the divisions differ
significantly, there are similarities and ways to assist each
other. For example, an investigator in Anchorage who needs to
check on someone in Juneau who is on his or her caseload can
call the investigator in Juneau to run the check. The divisions
were concerned that this would increase RSAs [Reimbursable
Service Agreements] but that hasn't been the case. This was
officially set up in the FY12 budget and hopefully there will be
savings.
CHAIR WIELECHOWSKI asked what progress had been made to bring
index equities in-house.
MR. BURNETT replied it's a slow and deliberate process but
employees have been added, training is underway, and limited
testing will begin in the next year. An S&P 500 index fund can
be replicated in-house, but there are no plans to test emerging
markets or a Small-Cap index fund in the near term.
10:59:12 AM
SENATOR PASKVAN asked how much the department has available to
invest in in-house equities and if each of the funds has
different investment time horizons such that an index fund might
be different for individual funds.
MR. BURNETT replied DOR's equity exposure is in the $20 billion
range and each of the many funds it has under management has its
own characteristics and its own time horizon. He explained that
most of the funds under DOR management are invested in pooled
investments so several funds may own a portion of an equity pool
while some may be individually invested. For example, you might
take a portion of what's in the CBR fund or the retirement funds
and manage the indexed portions in-house. He noted that the
equities in the retirement funds are currently about 55 percent
passive index funds and 45 percent actively managed funds. At
this time DOR has over 40 unique asset allocations for different
funds and over 100 different funds and accounts under
management.
11:01:38 AM
SENATOR PASKVAN asked where the department looks to define
fiduciary standard.
MR. BURNETT explained that the 329 page blue book on investment
guidelines for the commissioner of revenue has a definition for
acceptable investments and the standards.
CHAIR WIELECHOWSKI asked how much the state pays in fees to
outside financial advisors.
MR. BURNETT replied this year the Permanent Fund Dividend
Division budgeted $96 million in outside custody and management
fees and the Treasury Division budgeted about $35 million, but
it will probably spend less than $30 million.
CHAIR WIELECHOWSKI asked if DOR had considered bringing more
expertise in-house to try and save on fees.
MR. BURNETT replied that's where they're headed in working to
index equities in-house. He added that in years past a large
portion of the fixed income pool was managed externally at a
cost of several million dollars and now it's managed in-house
for under $100,000 with the same results.
SENATOR PASKVAN asked how much is in the CBR main account and
the CBR subaccount and questioned why the main account had such
a significantly lower rate of return in FY10.
11:07:08 AM
MR. BURNETT replied each account has about $5.1 billion. By
statute the CBR subaccount is invested for maximum return with a
five-year time horizon, whereas the main account is invested
entirely in fixed income securities for protection against loss
and for availability in a shorter range. He added that the
policy on how each account is allocated is an ongoing discussion
between the Office of Management and Budget (OMB), treasury
staff, the commissioner of DOR, and the Department of
Administration (DOA).
SENATOR PASKVAN asked who ultimately makes the decision on
allocation and amount.
MR. BURNETT replied the statutory responsibility resides with
the commissioner of revenue. He reminded the committee that in
2000 the Legislature set the subaccount in statute and
appropriated $400 million to it. In 2008 the Legislature
appropriated additional money to the CBR, and relying on intent
language in the budget the commissioner and then deputy
commissioner agreed to move about $4.1 billion into the
subaccount. No additional money has been appropriated since that
time.
SENATOR PASKVAN asked if the main account has bond exposure.
MR. BURNETT replied the CBR main account is invested in
treasuries, cash, and corporate bonds.
SENATOR PASKVAN asked if they own the individual bonds or are
invested in bond funds.
MR. BURNETT replied they own the individual bonds in all their
fixed income investments.
11:10:57 AM
MR. TANGEMAN continued to explain that the Tax Division is
currently working on two large projects that will lead to
efficiencies and effectiveness for the staff. The first is the
data gap analysis project. This is the outcome of a request by
Senator Wielechowski to review the information that is gathered
between DOR, DNR, and AOGCC. The purpose of the project is to
provide a centralized, reliable, secure, and automated database
of oil and gas production and tax information to DOR staff for
the purpose of evaluating tax obligations, having efficient
reporting, and full compliance from oil and gas producers within
the state.
MR. TANGEMAN related that as DOR began meeting with the project
contractor, it became abundantly clear that it would be more
efficient if producers and taxpayers could use one portal to get
the information to the state. Once the information is in a
database, it will be divided according to who needs what. DNR is
eager to cooperate with DOR on the project and hopefully an
initial report in August will provide information about what's
needed and how to move forward.
Completion of phase one will lead into the larger 3-5 year
revenue management system project. Ultimately, everything that
is gathered in the data gap analysis will be fed into the
revenue management system. Ideally it will be a commercial off-
the-shelf system that's 85 percent to 90 percent complete and
then adjusted to fit the tax system within Alaska.
SENATOR MENARD asked the cost of the data gap analysis project
if an in state or out-of-state firm was awarded the contract.
11:16:07 AM
MR. TANGEMAN replied it's under $50,000 and the contractor is a
former DNR employee who lives in Anchorage. DOR has begun the
RFP [request for proposal] process to bring on an independent
third-party project manager who will be the expert that helps
the state put together the RFP to acquire the system. The goal
is to have the [second] RFP out by the end of the calendar year.
A number of other states have already gone through this process
and there are a number of good systems from which to choose.
SENATOR PASKVAN said his concern centers on what Alaska will do
in the 3-5 years it takes to get the system up and running in
light of the fact that the October 2010 fast enterprise study
said that DOR is not able to audit, examine, analyze, forecast,
or manage its tax systems.
MR. TANGEMAN replied he understands but doesn't entirely agree
with the report. The change from the antiquated gross tax system
to a net tax system was significant because there was minimal
information under the gross tax and a plethora under the net tax
system. Being able to manage that information is the situation
they're trying to address. It's a challenging and slow process,
but DOR is doing audits on tax returns. DOR administers 22 tax
programs and ideally the less complicated will be implemented
before tackling the oil tax system. The data gap analysis will
provide a more immediate return. The information will go into a
database from which reports will be generated about what
information is available and what information is needed.
11:20:43 AM
SENATOR PASKVAN said he's trying to understand what the
Legislature should do now to get reliable consistent data to
know what credits are being used for and to understand cause and
effect on a tax basis.
MR. TANGEMAN replied they'd ideally like to begin generating
useful information from the data gap analysis this fall so there
will be usable information in advance of next session.
CHAIR WIELECHOWSKI said the critical question from his
perspective is if in the next 3-5 years it will be possible to
complete the audits under ACES to be assured that the state is
getting the revenue it is owed.
MR. TANGEMAN replied DOR is completing audits within the
statutory timeline right now and the hope is that this project
will provide more information and make it easier to do this.
SENATOR MEYER reviewed the change to a net tax in 2006 under
PPT, the current system under ACES, and the current discussion
about other tax credits and changing taxes in general and
observed that there really isn't any current information. He
asked if the last audit was completed in 2006.
MR. TANGEMAN confirmed that the 2006 audits were complete and
that DOR was currently working on the 2007 audits.
SENATOR MEYER observed that more current information would be
more helpful if the Legislature decided to take up oil tax
credits and production taxes in general.
MR. TANGEMAN said the current lag is more than he's comfortable
with but it's shorter each month.
SENATOR MEYER said one of the frustrations is not knowing if the
tax credits are being used to produce more oil or for
maintenance purposes.
CHAIR WIELECHOWSKI asked what efforts DOR had made to attract
and retain good staff because the fast enterprise report
highlighted that as a problem in terms of audit turnover.
MR. TANGEMAN replied they had some turnover when some long-time
auditors retired, but things have been fairly stable in the last
six months. Since 2007 DOR has added audit masters and is now
filling two commercial analyst positions, but the number of
employees hasn't changed significantly despite the huge change
in the tax structure.
He noted that Senator Stedman asked if more auditors were needed
but he's hesitant to request additional employees at this time.
Some contractual help will be needed to keep the current system
going while in-house staff works to stand up the new very
complex system. He assured members that this was a short term
problem.
SENATOR PASKVAN noted the unfilled audit positions within DOR
and asked if the State of Alaska has a salary issue for these
high-level audit positions.
MR. TANGEMAN replied it's a continuing challenge that DOR can't
pay as much as private industry. Interviewing for the commercial
analyst positions has gone on all summer long and while private
sector analysts like the idea of a 40 hour week, they can't
swallow the big salary cut. He conceded that even when the
benefits are factored in, it's a big hurtle.
11:30:29 AM
SENATOR PASKVAN asked for specifics on the magnitude of the
salary differential.
MR. TANGEMAN conceded that he didn't know what private industry
was paying.
SENATOR PASKVAN observed that it's logical to think that the
state would have some of the most competent and highly qualified
employees working in this area because it's the main artery of
revenue. If DOR is unable to attract highly qualified auditors,
that issue needs to be addressed in order for the new system to
be used effectively once it's in place. He asked Mr. Tangeman
for his help.
MR. TANGEMAN replied he'd be happy to do some research on that.
He added that DOR is fortunate to have the people that left
private industry to fill the audit master positions.
CHAIR WIELECHOWSKI echoed Senator Paskvan's comment about the
importance of attracting and retaining highly qualified
financial auditors. This is a critical department and this area
brings in 90 percent of the state revenue. He said he'd be open
to changing the statutes if that's what it takes because
billions of dollars are at risk.
11:33:58 AM
SENATOR MENARD concurred with both Senator Paskvan and Senator
Wielechowski and opined that the pay range should be the same as
for a commissioner. "It's time to stop talking and pay attention
to what we're doing with the employees that need to be in
place," she stated.
11:36:04 AM
REPRESENTATIVE SEATON said he hopes that Mr. Tangeman heard his
comment about the effect of state biologists no longer serving
on federal panels because current state policy prohibits them
from analyzing things in a best-science regime, and the June 10
directive from the Division of Public Health that stated that
the executive leadership team shall review scientific data
presentations at the concept level for political and policy
implications. He asked if DOR has a similar obligation or
policy, because that would force the Legislature to get
independent analyses of these issues.
MR. TANGEMAN replied with respect to tax information
confidentiality a number-one issue so it's a matter of what DOR
can provide and still keep that as a priority.
REPRESENTATIVE SEATON clarified he was talking about legislative
requests for information, not confidentiality. For example, he
said he requested information on HB 110 when it was in the House
resources committee and he didn't get it until three days before
the end of the session, and that information could have made a
significant difference in the analyzing the data. He said he's
trying to figure out if legislators' requests to DOR for
information or analysis will have to be given in a way that it
supports a policy position that the administration has taken
instead of being information that can be used to generate what
they believe is the best policy for the State of Alaska.
MR. TANGEMAN replied his perspective of that situation was that
DOR answered the question, but the intent of the question may
have been lost in translation. He stated that DOR is very
responsive, particularly during session. He made that a specific
priority to DOR's petroleum economists and that will not change
this next session. "If responses take a little bit of time it's
probably because we're erring on the side of being cautious as
to what exactly we're releasing," he said.
REPRESENTATIVE SEATON said perhaps there was some
misunderstanding but the policies that came out in May and June
were a concern and he wanted to be assured that the Legislature
would be made aware if DOR changes its policy in this regard.
11:42:41 AM
SENATOR PASKVAN asked how much money DOR expects to need for the
next several years to hire contractors.
MR. TANGEMAN replied he didn't know how many full time
equivalent contractual workers would be needed at this point,
but the current staff was already working at full load and
couldn't be asked to run two systems simultaneously.
SENATOR PASKVAN highlighted the need to be proactive with
respect to the DOR budget and to hiring qualified people to
ensure that a backlog doesn't develop in the next 2-3 years.
MR. TANGEMAN stated agreement.
11:45:14 AM
CHAIR WIELECHOWSKI recessed the meeting.
12:06:35 PM
CHAIR WIELECHOWSKI reconvened the meeting and announced the next
order of business would be to take public testimony. He noted
that people could also submit testimony at the website
savealaska.ak.senate.org or call in on the toll free line at
(855) 463-5009.
12:07:26 PM
JOHN SPALDING, representing himself, said he's lives in
Anchorage for 48 years. He expressed hope that the Legislature
was serious saving money and suggested they forget about buying
property in downtown Anchorage, sell the building that's
currently used by legislators, and use the property that's on
the south side of the airport. That would save money and provide
easy access to the public.
12:09:51 PM
BREEHIA MITCHELL, representing herself, said she and her husband
own a plumbing business in Juneau and they've had an
unreasonably difficult time getting a mechanical license from
the state. This license is required for the business and they've
been renting one but her husband passed the test and is now
qualified to receive the license. She outlined the difficulties
she had had that highlight dysfunction within the system.
12:14:02 PM
CHAIR WIELECHOWSKI said his staff would contact the state
office.
SENATOR PASKVAN asked which office received the application.
MS. MITCHELL replied it was the Department of Commerce,
Community and Economic Development (DCCED), Division of
Corporations, Business and Professional Licensing.
CHAIR WIELECHOWSKI said his office is looking at business
licensing and agreed that there was room for improvement.
MS. MITCHELL added that it's confusing to the public that DCCED
issues the mechanical licensing regulations, but Department of
Labor and Workforce Development (DOLWD) enforces them.
12:15:51 PM
LYNN WILLIS, representing himself, observed that the Legislature
spends whatever time it allots itself working on the budget
process. He surmised that they could be more efficient by
vetting and completing 80 percent of that process during the
Interim.
12:16:35 PM
BARBARA WINLKEY, representing herself, expressed concern about
the waste of money and resources associated with multiple phone
books, the Anchorage Port Authority, and special legislative
sessions. She offered to submit more ideas.
12:19:38 PM
JERRY LAVINE, representing himself, stated his belief that the
Legislature is one of the inefficiencies of state government.
More and more of state government should be privatized to get
public pensions off the public payroll, he said. An example of
efficiency is ongoing in the Anchorage area where a private
company is working under contract to do maintenance work on the
public water and sewer lines. This doesn't represent a loss of
jobs; it's that government jobs are being transferred to the
private sector. This same kind of efficiency is demonstrated in
the spring when more private sweepers are on the road than those
that are owned and operated by the government. Increased
privatization will save the government a lot of money in the
long run with regard to pensions and retirement plans. He added
that he'd send more ideas to his senator's office.
CHAIR WIELECHOWSKI said he'd add the written comments to the
record.
12:22:44 PM
PAUL D. KENDALL, representing himself, said he listed 33 points
in the outline he prepared for his testimony, but some was
probably not pertinent. He opined that more meetings of this
type were needed to provide time to go into detail and settle
problems or gripe about government in a constructive manner.
MR. KENDALL explained that his philosophy is that everything is
a manifestation of energy attempting to find a state of being
and that without that as a priority this type of discussion
isn't possible. Fundamental priorities include holding the
family together, increasing accountability, improving access,
open meetings and the free flow of data.
12:28:38 PM
MR. KENDALL directed attention to the points on his outline and
said that ghost funding or nonspecific allocations, child
support enforcement, and illegal aliens are additional
inconsistencies and disconnects that are a concern.
Alaska has a chance to lead the world, he stated. It may be
necessary to divide the society between the carbon-based people
and the new technologists. Be proud of both and understand that
each has a very important role. In conclusion, he said he'd like
to ask for a job to lead a new energy technology scouting team
for the residential sector.
12:33:05 PM
BARBARA LESSMEIER, representing herself, said she is a service-
disabled veteran who spends a great deal of time advocating for
veterans. Recently she visited the three job centers in
Anchorage, which are managed by the Department of Labor and
Workforce Development (DOLWD). She said she ultimately decided
to no longer visit the Gamble facility because a state employee
named Tom demeaned and was critical of people who were there for
help, herself included. That facility eventually closed and the
senior employees, including Tom, were reassigned to the other
two job centers in Anchorage. Now these two facilities are
uncomfortable because there are too many employees and there's
not enough work.
MS. LESSMEIER asked that someone look into the situation because
there were probably other instances in state facilities of too
many people doing too little work.
CHAIR WIELECHOWSKI confirmed the locations of the Anchorage job
centers and thanked her for her testimony.
12:36:13 PM
CHAIR WIELECHOWSKI announced an at-ease.
12:44:31 PM
CHAIR WIELECHOWSKI reconvened the meeting.
LEWIS DAVIS, representing himself, said he's a former state
employee who has seen lots of waste and believes that many
positions are overpaid. When he was working he supervised
several people and learned that on a nationwide basis Alaska
state employees were overpaid and underworked. He further
commented on boom boxes that were loud enough to rattle the
windows in his home and trash around buildings that the owners
don't pick up. It doesn't take much money or time to take a
picture of the trash, send the picture to the owner, and follow
through and make them pick it up, he said.
12:48:01 PM
JOHN FARLEIGH, representing himself, said he's a multi-
generational Anchorage resident and he believes that a long-term
perspective can be important. He said that when he listens to
the news about the budget he repeatedly hears that Medicaid
costs will be a growing burden to states in the future. During
the lengthy national debate on healthcare reform he was
astounded that the U.S. Chamber of Commerce fought the reform
because big business would probably benefit the most from a
universal healthcare plan. National healthcare would relieve
businesses of the burden of having to provide healthcare.
MR. FARLEIGH cited a 2004 university study of the healthcare
delivery system in the U.S. that concluded that the nation
spends enough to cover everybody, but the inefficiencies are
ridiculous because of the multitude of government-funded health
plans. For example, some people qualify for both Medicare and
Medicaid (Medi-Medis), but the inherent regulatory conflicts
between the two systems cost the country hundreds of millions of
dollars a year.
MR. FARLEIGH pointed out that states are not obligated to be
part of the exchange program if they can come up with a plan
that, for no extra money, provides the required services. He
noted that the State of Vermont was trying to do that and he
surmised that it was trying to get the dollars the federal
government would have ordinarily spent on Medicare, Medicaid,
and other healthcare programs and roll that money in to one plan
that would cover all Vermont residents. He suggested that Alaska
at least look at that plan. The math is simple, he said; one
program for all residents is the cheapest per capita to pay the
premiums for the insurance.
MR. FARLEIGH pointed out that the private market does some
things exceptionally well, but health insurance shouldn't be
included in that roster. Corporations have a legal obligation to
make a profit for their shareholders so there is an
irreconcilable conflict of interest. Every time a person applies
for a benefit, the insurance company's motivation is to deny the
claim. He said he's heard that Medicare overhead ranges between
one percent and three percent, whereas overhead for the
insurance industry ranges between 20 percent and 30 percent. The
reason for this inefficiency is that the health insurance
industry spends a tremendous amount of money to figure out ways
to turn claims down.
He summarized that legislators should try to find a way to get
the federal government to pay the state all the money it
provides for the various healthcare programs in the state. It
seems that the state could provide healthcare services to
everyone and save money in the process, he concluded.
12:56:56 PM
REPRESENTATIVE CISSNA thanked Senator Wielechowski for holding
this hearing because listening to the public perspective about
the cost/benefit of the things that government does is most
important. She said she'd like to help work on ways to develop a
legislative/citizen discussion group.
1:00:50 PM
THERESA OBERMEYER, representing herself, said she's known for
years that Norway had a permanent fund and she was delighted
when she learned that ten Alaska legislators were going to visit
that country [to learn more about the Norway fund.] She said
she'd like to hear that the entire body was going.
MS. OBERMEYER related that for years she had difficulty finding
anything that was reported about the Alaska Permanent Fund that
was fair, so she began attending the board meetings to find out
what was going on. It's embarrassing, she said, to see that the
Norway Permanent Fund that was started in 1991 is worth $570
billion, whereas the Alaska Permanent Fund that was started in
1976 is, for the first time, worth just over $40 billion. She
surmised that the fund had gone up recently because the board
was paying more attention now that it knew that Alaska
legislators were going to Norway.
MS. OBERMEYER pointed out that Norway not only has a very
successful permanent fund, it also provides free healthcare to
all its citizens. She questioned why Alaska didn't have a
medical school and commended Representative Kawasaki for
introducing a bill to build both a medical school and a law
school. She reiterated that it would be enlightening for all
legislators to go to Norway.
REPRESENTATIVE CISSNA related that she would like to go to
Norway but the intensive screening at airports will keep her
from traveling.
1:08:06 PM
There being no further business to come before the committee,
Chair Wielechowski adjourned the meeting at 1:08 p.m.
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