Alaska’s occupational licensing division staggers under its workload

    The Alaska State Capitol is seen on Wednesday, Dec. 21, 2022, in Juneau, Alaska. (Photo by James Brooks/Alaska Beacon)

    Juneau, Alaska (Alaska Beacon) - Gov. Mike Dunleavy proposes staffing increases and universal temporary licensing to help the agency, as lawmakers propose adding to the burden

    After waiting six months for a license to operate, an Anchorage psychologist asked Senate Majority Leader Cathy Giessel for help.

    But when the Anchorage Republican called the licensing office, she was greeted by voicemail. The person in charge of answering the phones had quit and couldn’t be replaced.

    “Professional licenses are required to get people to work. That division doesn’t have enough people to even answer the phone,” Giessel said on March 1.

    That person wasn’t alone — last year, the state reported that 39 occupational license-examiner jobs were vacant, almost one in five people assigned to that job statewide. That’s actually an improvement: In December 2021, fully a third of the state’s licensing examiner jobs were vacant.

    As a result, professionals licensed by the state are reporting monthslong waits for new permits or renewals, slowing businesses statewide. Some boards and commissions have voted to take emergency action, extending existing licenses longer than normally allowed by state law.

    Before joining the Legislature this year, Rep. Justin Ruffridge, R-Soldotna, was chair of the state Board of Pharmacy.

    That board processes renewals in June; for the past two cycles, the board had to extend expirations through September.

    “I would say staffing shortages are probably the biggest hurdle to overcome,” he said. “Turnover is pretty high in the department and they are working pretty hard to actually unify some of those licensing issues. At the moment, though, it still is a bit of a hurdle. I still hear a few complaints from people about weeks of time waiting for licensing and things of that nature, but I know that I’m pretty confident that that’s gonna get worked out.”

    To address the problem, Gov. Mike Dunleavy has proposed a major increase in the budget for the state’s office of professional licensing, and lawmakers appear ready to approve that request.

    In a budget with few increases in state spending, it’s a notable exception.

    In February, Dunleavy requested 12 new licensing positions at a cost of $1.5 million. 

    “These positions will help the division to improve licensing timeliness to set and achieve reasonable service expectations and reduce risk to employers — particularly health care facilities — and people seeking licensure to work in Alaska,” the department said in its funding request to the Legislature.

    The state’s licensing branch has been squeezed by more than just a staffing shortfall. Over the past 10 years, state figures show the number of licenses issued by the Division of Corporations, Business, and Professional Licensing has risen by 64%. 

    While some of that increase was caused by a growing number of workers, it’s also been caused by regulatory spread.

    In fiscal year 2012, the division licensed 98 professions. Ten years later, it licensed 118. 

    “In addition to the increase in the number of professions licensed, the division has seen growth in the types of licenses or registrations for firms, companies, or facilities offered under certain professional licensing programs, and the types of certificates, permits, or endorsements for professionals who provide additional services under their license,” said Sylvan Robb, the division’s director, by email.

    During the COVID-19 pandemic emergency, the licensing situation was so dire that the state used emergency rules to suspend many kinds of healthcare licenses, an act that allowed out-of-state workers to arrive and treat Alaskans.

    The pandemic stressed the state’s medical licensing system, a recent audit noted, concluding that the state medical board failed to require that emergency licensees be suspended by a regularly licensed physician.

    The federal Bureau of Labor Statistics estimates that just under 23% of full-time workers in the United States do so under some kind of occupational license or certificate. 

    Alaska falls on the lower end of the regulatory scale among the 50 states, as judged by a database maintained by the National Conference of State Legislatures and similar organizations. 

    The state licenses funeral directors but not building inspectors, manicurists but not private investigators.  

    Lawmakers are proposing additional occupations come under state approval, potentially adding to the workload of state licensing officials. 

    This year, legislators have introduced legislation that would regulate associate counselors, naturopaths, and interior designers.

    Some state licenses are mandated by the federal government, Ruffridge noted. As online pharmacies grew in popularity, Congress passed legislation that mandates oversight.

    “Not everything’s local anymore. Before it was like, ‘I’m your pharmacist, I’m in your town. My pharmacy is licensed, and I’m licensed, and I’m just here,’” he said. “And now a pharmacy in Florida is offering services in Alaska, and it’s gotten very big.”

    State governments across the country use licenses to regulate safety, and Alaska is no different. In 2015, when Rep. Lynn Gattis, a Republican from the Matanuska-Susitna Borough, secured passage of a bill requiring tougher training requirements for manicurists, she said at the time that “consumers will appreciate the additional training requirements that will lead to greater safety and hygiene practices being implemented statewide.”

    Consumer appreciation is difficult to measure, but the economic consequences of licensing spread have been better studied. In 2018, the Harvard Business Review and the Economist both noted studies concluding that occupational licensing blunts competition — those seeking to open a new business face more hurdles than those who are already operating.

    In addition to requesting more professional licensing staff, Dunleavy has proposed legislation that would offer universal temporary licensing. Workers licensed for a profession in another state would be able to work in Alaska for up to 180 days (another 180-day extension is possible) while pursuing an Alaska-specific license.

    Nineteen states have already passed similar laws, the National Conference of State Legislatures noted.

    Ben Witerdink, a visiting fellow with the Alaska Policy Forum and a supporter of the governor’s proposal, said he thinks it could help the state’s licensing backlog.

    “Of course, it’s especially great for licensed professionals thinking about moving to Alaska, who would be able to start working with a temp license without having to complete Alaska license requirements first and wait for a backlogged system to grant their full Alaska license before they can begin working here,” he said.

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