For the past year, legislators have been required to treat their office accounts as income. They got a lump sum from the state, and were expected to spend that money on stationery and mailers under the honor system. Now, they’re moving back to a policy where they have to submit receipts for those expenditures.
There were a few big problems with the old system.
For one, the public couldn’t track how legislators were spending their office money. But voters could be sure that not all of it was going to newsletters and pens. Since the money was treated as income, at least part of it went into lawmakers retirement funds. An even larger chunk went to the federal government, in the form of income taxes.
“So much is taken out for taxes, and so you don’t have as much. It’s not the full amount by a long shot,” said Rep. Peggy Wilson, a Petersburg Republican, at a Legislative Council meeting on Thursday.
If any legislator did have money left over after spending and taxes, there wasn’t a mechanism for them to give it back to the state. It was kept as their income.
For all these reasons, the Legislative Council — a 12-person committee that sets office policy for the rest of the Legislature — revisited how to handle these funds. Representatives each get $16,000 annually, and senators receive $20,000. Added up, it amount to $1 million in discretionary funds for the whole Legislature.
Most lawmakers at the meeting supported switching to a system where they have to apply for reimbursements. That way money from their office accounts wouldn’t be taxed, wouldn’t end up in their own pockets, and would go back to the state if any remained.
But there was discussion of how that system could inconvenience people who represent rural districts, where costs are higher and receipts aren’t always available.
“[The reimbursement process] causes me somewhat of an undue hardship because I’ve got to go ahead and start putting all these receipts together and send them on in. Because of my remote location, there’s a time for reimbursement and my credit card starts to accumulate up to the amount of the limit,” said Sen. Donny Olson, who represents the state’s largest district.
Olson, a Democrat from Golovin, does not serve on the council, but attended the meeting to speak in favor of legislators administering their own accounts.
Mike Hawker, an Anchorage Republican who chairs the council, responded that if the legislature were a corporation, it would be appropriate for people to manage their own office funds. But since they were dealing with public money, reimbursements made more sense.
“I want to be crystal clear, absolutely accountable, and within the letter of the law,” said Hawker.
The motion ended up passing unanimously. A group of mostly Democratic lawmakers had filed bills to switch to a reimbursement system earlier this year, but their legislation was never heard.
“Transparency for the public is more important than keeping things from the public because it saves effort. That’s the wrong way to go,” said Rep. Les Gara, an Anchorage Democrat who co-sponsored reimbursement legislation in February. He said he supported the policy adopted by the Legislative Council, but wish it had been enacted sooner.
The reimbursement policy go into effect in 2014.