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State says capturing airline miles might cost more than it saves

Posted: Friday, February 23, 2001

JUNEAU (AP) -- The state would spend more than it saves if it made state workers use their frequent flier miles for state travel only, officials said Thursday.

The Department of Administration estimated it would cost $54,900 to $265,600 a year to implement a bill requiring employees to use airline miles earned on state trips for subsequent state travel. Currently employees can use those miles for their personal travel.

The Legislative Affairs Agency guessed its cost of implementing House Bill 123 at $16,200 the first year and $9,800 in subsequent years. Both agencies' costs come mainly from hiring employees to keep track of the mileage.

The bill's sponsor, Rep. Andrew Halcro, R-Anchorage, told the House State Affairs Committee he's shocked at the numbers and doesn't believe they're right.

Halcro said he's not trying to attack state employees with the bill. He simply believes the state has a right to reap the benefits of miles earned on state travel.

State labor union representatives said the bill wouldn't help the state and would take away a small benefit from employees who often travel outside of normal work hours.

''Our members have looked at this not so much as a benefit, but as a little bit of compensation for the time they spend away from home, for traveling at night,'' said Don Etheridge, an AFL-CIO representative.

Halcro said he sympathizes with that, but said travel is an expected part of many jobs. And it can be a perk, he said, noting employees traveling to Anchorage sometimes extend their stays through the weekend to shop and attend cultural events.

Employees have at times booked travel on a more expensive airline because they could get mileage there, Halcro said.

Halcro said he doesn't think the bill will cost what the administration estimates because he doesn't intend the state to keep track of the miles. Employees would be on an honor system and be trusted to follow the law, he said. Those who didn't could be subject to an ethics violation.

''It requires absolutely no oversight, no accounting and no supervision,'' Halcro said. He estimated the bill would save the state $500,000 to $2 million a year.

Kim Garnero, director of the Division of Finance in the Department of Administration, said the bill did not indicate employees would be on an honor system. It simply said the department was to come up with regulations to implement the requirement.

Turning a state mile into a state asset would require stewardship of them, she said.

Her estimate assumes the bill would not apply to most union workers until their current contracts expire in two years, so the cost of the bill goes up the third year to account for the additional work of tracking their travel.

The savings to the state would be small, Garnero said, because Alaska Airlines doesn't allow miles to be pooled into one account. They would have to be used for an individual employee's subsequent travel. To qualify for a free ticket, an employee would need to make 18 round trips between Juneau and Anchorage, Garnero said.

''Only a small percentage of state employees would ever qualify for free travel,'' Garnero said.

In addition, she said, mileage award seats are not always available at the time an employee needs to travel.

State Affairs Committee member Jeannette James said those are some of the reasons she didn't bother to schedule the same bill for a hearing last year when she chaired the State Affairs Committee.

She agrees with the Department of Administration that if mileage becomes a state asset, the state must keep an account of that asset.

One possible way to get out from under that burden would be to say no one can use the miles -- neither the state nor the employees, James said. That might allow the state to negotiate a better deal with airlines, she said, and might satisfy those who complain it's not fair that state workers receive that benefit, she said.

Committee chairman John Coghill asked Halcro to work on the bill to clarify the accounting requirements, then bring it back for another hearing.



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