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Regulatory Comments April 6, 1999 Representative Alan
Austerman In Alaska, as in the rest of the United States, the vast majority of restaurants are small businesses with deep community roots. License or permit fees charged to such establishments are, in effect, hidden taxes on small businesses, and they are ultimately passed on to consumers. The estimated drastic increases in fees that would likely result from the elimination of a shared funding arrangement for Alaska's restaurant and retail public health inspections would cause an immediate negative economic impact on restaurants and other small businesses. Faced with user fee increases of 200 percent or more, restaurant operators may be forced to cut employees and raise prices, with inevitable negative economic impacts on their communities. Historically, retail food safety inspections are a public health service conducted by the government to benefit the general public. Local and state governments typically fund these programs fully and adequately in order to carry out this public service. Charging only the restaurant industry for public health inspections may confuse the public as to the primary intent of the program by calling into question whether such programs are being implemented for the benefit of industry or the general public. Public confidence in a public health system funded solely by industry may be weakened by the perception that "industry is paying for the inspections." We are also concerned about the issue of fairness and value for payment that the proposed funding scheme would create. Not all establishments would be inspected with the same frequency; therefore, restaurant operators may not perceive the inspection services provided for the fees collected as equitable. Some facilities may pay for inspections they never receive, while others may receive multiple inspections for the same fee. This will surely degrade the industry's confidence in the value of the government inspection program and may even prompt some to seek private inspections that can offer a greater perceived value for service. In addition, eliminating public funding from retail food inspection efforts while continuing general fund support for inspections of non-retail establishments may create a perception of unfairness between segments of the food industry. Under this proposal, for example, the inspection of food processors' environmental and septic systems will remain publicly funded. Finally, adoption of this proposal may cause a perpetual industry-regulatory funding conflict, which could result in lower quality in public health inspection programs. Requiring sole funding from one industry segment may cause industry opposition to further funding increases. In our view, this will tend to impede what should be a fully cooperative relationship between parties with the same goals of eliminating foodborne illnesses. In an atmosphere of continued conflict and rising costs for health department services, funding increases would invariably be delayed, further degrading the quality and value of the health department inspection program. The restaurant industry has long supported full funding of what we view to be a very important public health function. However, the imposition of higher 'user fees' as a means of replacing general fund revenue would be a step backward in the progress made in food safety and the development of professional regulatory inspection programs. We ask that the State of Alaska continue to support general funding of public health inspections and oppose the Subcommittee's recommendation to fund retail food regulation solely through industry fees. We appreciate your consideration of our views. Sincerely, Steven F. Grover,
R.E.H.S. Cc:
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