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If we understood, maybe we'd know better
Knowing and understanding are not the same. I was twice reminded this week.
Most Alaskans watched and waited for movement on the mega issues of oil taxes and budgets, but a couple other critical debates this week occurred off center court. Those debates out of the spotlight quickly devolved into the "I just know" mode. That kept groups of lawmakers from a deeper "understanding".
The first "I just know" reminder was in a senate committee considering fixes to the flawed new retirement tiers passed in haste last session. The second "I just know" reminder was on the senate floor in debate over legislation that takes an experimental private procurement program limited to one division in one state department and expands it across the entire state bureaucracy.
NEW RETIREMENT SYSTEM FIX-IT DEBATE
Legislators protecting a decision that mandates new TRS and PERS retirement tiers settled quickly into the "know" mode when debating fixes to major and minor flaws in the retirement bill they passed a year ago--SB141. Here's the scene-setter leading up to a senate committee hearing earlier this week on a bill with 34 pages of major and minor fixes to the new TRS and PERS defined contribution tiers:
- the new PERS and TRS tiers shift retirement risks to Alaska public employees, who already lack the defined benefit of social security, in a radically new way that increases financial risks and may make recruitment and retention of good public employees problematic;
- the IRS must approve all plans that take dollars out of paychecks before they're taxed and has barely begun a review process that could last for more than a year after the new tier IVs kick in on July 1;
- the new PERS and TRS tiers do not reduce the retirement systems' unfunded liabilities; and
- the new tier IV retirement system employees will cost employers (that's the state, Alaska municipalities and Alaska school districts) more than the tier III employees they are now hiring.
These conclusions have been reached by Alaskans still trying to "understand" all the permutations of the new retirement levels. They want to take some time to get to a deeper "understanding" of these issues to see what the appropriate fixes are.
There clearly was enough work done on the house side of the legislature to "understand" that a one-year delay is necessary before applying 34 pages of complicated patchwork fixes. But those in the senate committee who "know" these issues are bulldozing ahead, apparently secure in their "knowledge". Those who "know" stripped the year's delay from the house's bill.
PRIVATE PROCUREMENT EXPERIMENT DEBATE
The second "know/understand" issue surfaced this week on the senate floor. Those in favor of contracting state procurement work to a private business passed a bill from the senate extending the sunset of an experimental privatization effort now confined to the Southeast Region component of the Department of Transportation and Public Facilities. The bill extends the "experiment" until 2009 and expands the "experiment" to all state departments. This bill passed on a straight party line vote, 12-8.
I'd argue it passed with too little "understanding" and too much "knowing". In this instance:
- Those voting 'aye' didn't want to understand that our procurement laws that govern state purchasing were developed over a long period of time with very strong rules of conduct to prevent favoritism and the potential for fraud--the bill exempts the contractor from these laws;
- Those voting 'aye' didn't want to understand that one of the safeguards, prohibiting fragmentation of contracts to get around contract limits, is breached in the extended and expanded "experiment" they approved; and
- Those voting 'aye' didn't want to understand, or even seem interested, in assertions by state managers and by an independent auditor that goods purchased by the private contracting firm often cost more. A spot check by the auditor said, in instances where orders of an identical number of identical goods were compared, the goods purchased by the contractor were 15 percent more expensive than when they'd been purchased by state procurement officers. The auditor also noted overall procurement costs made under the experiment appeared to be up 9 percent.
The counter arguments by those who "knew" better were that the auditor's methods were wrong and the state was afraid of change. But those who didn't want to "understand" because they "knew" better, didn't prove the cost findings by the independent auditor and state managers wrong. Those in "the know" just challenged the independent auditor's methodology and the integrity of state employees.
Because 12 just "knew", a small, discrete experiment originators originally promised would save $5 million to $20 million but is probably costing us money, is spreading. Those in "the know" want this experiment, that all indicators show is failing, to move from the Petri dish to the whole population.
In both these situations, not wanting to "understand" is coming with huge potential costs. In the first instance, we may end up paying more for new employees we've placed in greater retirement risk while doing nothing to solve the retirement system's unfunded liability problems. In the second instance, we've not saved any money with the procurement experiment (and, in fact, all indicators are we're spending more) and we're taking more risk with procurement integrity.
In both cases, advocates need to get beyond just saying "know" and try to get to "understanding" the complicated issues with which they're dealing.

Phone: (907) 465-4947
Fax: (907) 465-2108
Mail: Sen. Kim Elton, State Capitol
Juneau, AK 99801
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Capitol Undercurrents
Court sets contract free--The Juneau Superior Court late today ruled the governor could not keep the gas line contract deal he says he's struck with three multi-national oil companies from a legislator or any other party who wants to see it. It was a setback to the governor who wants the legislature to okay an oil and gas tax plan before they see the gas line contract the tax is supposed to facilitate. The judge made his ruling in favor of the motion by Sen. Hollis French under the public records laws.
BP suffers another leak--Several weeks ago, a BP pipe on the North Slope sprung a leak and kept leaking. Over a period of days hundreds of thousands of barrels of crude spilled onto the tundra. This week, BP sprung another leak. No oil damage to the tundra with the second leak but it could cause damage to their oil tax lobbying effort. A person unknown took pics of a poster board inside BP's Alaska headquarters then the pics were leaked to legislators Wednesday. The large poster in the headquarters building displayed "facts" about the oil tax recipes now under review in Juneau. Down in the lower right corner of this large display was a display of an example e-mail letter that BP employees could send to legislators. The sample letter begins: "Before you delete my e-mail because I work for a big oil company, let me say that I am 23 years old, not from Alaska and was not asked to write this letter." Not told to write, perhaps, but a pretty powerful suggestion with pretty specific details about what to say. Perhaps the scariest message in the "suggested" letter was: "oil companies don't care where oil comes from, they know that energy hungry Americans will buy it." That line pretty much confirms the contempt multi-nationals feel for all of us who now pay $3 or more at the pump while they post record corporate profits.
Pampered--We get a lot of interesting geegaws in the office attached to notes supporting or opposing a bill or a concept. Cookies from UA support staff, a mug from the NRA, brownies from Juneau Republican women in support of a road out of Juneau, gimme hats from businesses. We put the edibles out for passersby and use the mugs to serve tea and coffee to visitors and the hats are handy to give to folks heading out into the snow or rain. Thursday, though, we all were 'gifted' with something totally different--a Pamper tied to a flyer asking us to support hearing screening for newborns. Guess we'll save that for someone acting like a baby as the session winds down.
Flying high, flying low--A constituent wrote this week to note the state paid more to purchase and operate the governor's jet last year than it did to operate Alyeska Central School in its final year of operation. A couple of years ago Alyeska had over 650 full time students and helped 1,500 summer students make up high school credits they needed to graduate from other public schools. Over 50 Juneau folks were employed at Alyeska but next year there will be 3.5 employees. But we have a jet. Not a good trade off.
Follow the money--BP, Conoco and Exxon spent $1.93 million on reportable lobbying expenses for their causes (mostly taxes bad, oil companies good) in the first three months of this year. That sets a record but is just half a drop in a very large bucket of what they've earned in Alaska over the same period of time.
Mutual, I am sure--A legislative aide, flogging a bill for her boss before the Senate HESS committee, told members during her presentation: "Every time I work on an insurance bill, before long I feel like I should file a worker's comp claim." An industry lobbyist in the back of the room whispered in response: "Right back at you!"
Without comment--Here's the text of an e-mail sent to my office earlier this week. "Despite being on the federal "do not call" list, I was awakened Thursday morning at 5:30 a.m. by an oil company lobbyist computer. It stridently insisted I need to contact you about oil tax rates. I would appreciate a 40 percent rate. According to Bloomberg, they can certainly afford it."
Classic debate--Here's an item that slipped through the cracks in an earlier newsletter. "Cannot people realize how large an income is thrift?" That's a quote from Marcus Tullius Cicero (143-106 B.C.). It was resurrected on the floor of the senate by Democrat Sen. Hollis French as he argued in favor of a budget amendment that would deposit half of this year's windfall budget surplus in a savings account. Cicero's wisdom did not prevail--Republicans voted down the savings plan. (I'd note my least favorite Cicero quote is: "It is foolish to tear one's hair in grief, as though sorrow would be made less by baldness." Bald now has, for me, many of the connotations of a four-letter word even though the word is more socially acceptable.)
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