Legislature(2005 - 2006)

03/03/2005 02:47 PM House FIN


Download Mp3. <- Right click and save file as

Audio Topic
02:47:11 PM Start
02:50:08 PM HB134
04:10:31 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 3, 2005                                                                                            
                         2:47 p.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Chenault called the House  Finance Committee meeting                                                                   
to order at 2:47:11 PM                                                                                                        
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Jim Holm                                                                                                         
Representative Mike Kelly                                                                                                       
Representative Carl Moses                                                                                                       
Representative Bruce Weyhrauch                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Eric Croft                                                                                                       
Representative Reggie Joule                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Eric Swanson, Director, Division  of Administrative Services,                                                                   
Department  of  Administration;  Jo  Ellen  Hanrahan,  Acting                                                                   
Director, Division of Administrative  Services, Department of                                                                   
Commerce,  Community & Economic  Development; Karen  Rehfeld,                                                                   
Deputy  Commissioner,  Department   of  Education  and  Early                                                                   
Development;   Eddy   Jeans,  Director,   Education   Support                                                                   
Services, Department of Education  and Early Development; Tom                                                                   
Lawson,  Director,  Administrative  Services,  Department  of                                                                   
Community  and  Economic  Development;  Geron  Bruce,  Deputy                                                                   
Director,  Division  of Commercial  Fisheries;  Dan  Spencer,                                                                   
Director, Division of Administrative  Services, Department of                                                                   
Public Safety;  Joan Brown, Office of Management  and Budget;                                                                   
Janet  Clarke, Assistant  Commissioner,  Division of  Finance                                                                   
and  Management Services,  Department  of  Health and  Social                                                                   
Services;  Bill Hogan,  Director, Division  of Mental  Health                                                                   
and  Developmental  Disabilities,  Department of  Health  and                                                                   
Social  Services; Robert  Buttcane, Coordinator,  Faith-based                                                                   
and Community  Initiatives, Department  of Health  and Social                                                                   
Services;   Marc   Antrim,   Commissioner,    Department   of                                                                   
Corrections, Sharleen  Griffin, Acting Director,  Division of                                                                   
Administrative Services, Department of Corrections.                                                                             
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
None                                                                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 134    "An  Act making  supplemental,  capital, and  other                                                                   
          appropriations,   and  reappropriations;   amending                                                                   
          appropriations;     making    appropriations     to                                                                   
          capitalize  funds;  making an  appropriation  under                                                                   
          art. IX,  sec. 17(c), Constitution of  the State of                                                                   
          Alaska,  from  the  constitutional  budget  reserve                                                                   
          fund; and providing for an effective date."                                                                           
HOUSE BILL NO. 134                                                                                                            
                                                                                                                                
     "An   Act  making  supplemental,   capital,  and   other                                                                   
     appropriations,    and     reappropriations;    amending                                                                   
     appropriations;  making   appropriations  to  capitalize                                                                   
     funds;  making  an  appropriation  under art.  IX,  sec.                                                                   
     17(c),  Constitution of  the State  of Alaska,  from the                                                                   
     constitutional  budget reserve  fund; and providing  for                                                                   
     an effective date."                                                                                                        
                                                                                                                                
     HB  134 was  heard  and HELD  in  Committee for  further                                                                   
     consideration.                                                                                                             
                                                                                                                                
2:47:34 PM                                                                                                                    
                                                                                                                                
DEPARTMENT OF ADMINISTRATION                                                                                                  
                                                                                                                                
Section 1(a)                    Finance                                                                                         
                                                                                                                                
     First National Bank of Alaska credit card rebates                                                                          
     $76.1 SDPR                                                                                                                 
                                                                                                                                
ERIC SWANSON, DIRECTOR, DIVISION  OF ADMINISTRATIVE SERVICES,                                                                   
DEPARTMENT  OF ADMINISTRATION  discussed  the request.  These                                                                   
funds are received  from the bank based on  state credit card                                                                   
purchases.  Growth of the credit  card program, combined with                                                                   
more  favorable  rebate  terms  has resulted  in  rebates  in                                                                   
excess  of   budgeted  authority.     Allowing  receipt   and                                                                   
expenditure of these funds will  allow the department to meet                                                                   
the vacancy factor  in this component where  health insurance                                                                   
and retirement cost increases were not funded.                                                                                  
                                                                                                                                
In response  to a  question by  Representative Chenault,  Mr.                                                                   
Swanson clarified  that the request  was not fully  funded in                                                                   
the FY05 budget.                                                                                                                
                                                                                                                                
Section 1(b)                    Motor Vehicles                                                                                  
                                                                                                                                
     Digital drivers license supplies                                                                                           
     $125.0 receipt supported services                                                                                          
                                                                                                                                
Mr.  Swanson   observed  Funding  is  needed   to  cover  the                                                                   
additional  costs of  deploying the  digital drivers  license                                                                   
system and increased demand for  the new licenses. Consumable                                                                   
costs are  higher due to  volume of first-year  purchases and                                                                   
underestimating  cost of consumables.  They need  to purchase                                                                   
materials  to carry them  through the  beginning of  the next                                                                   
year as well.                                                                                                                   
                                                                                                                                
2:50:08 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  questioned  if  the  fees  cover  the                                                                   
costs. Mr. Swanson  observed that the division  collects more                                                                   
than it is authorized to spend.                                                                                                 
                                                                                                                                
Items 1(c) and 1(d) were previously heard.                                                                                      
                                                                                                                                
2:50:40 PM                                                                                                                    
                                                                                                                                
1(e)      Administration        Risk Management                                                                                 
                                                                                                                                
     $1,350.0. general funds                                                                                                    
                                                                                                                                
Mr.  Swanson observed  that  the  costs related  to  property                                                                   
damage. Two major  claims occurred against the  State's self-                                                                   
insurance  deductible  for  catastrophic   losses:  Fairbanks                                                                   
Correctional  Center $1,000.0  (total  cost is  just over  $1                                                                   
million) and MV Fairweather hull  damage $350.0 thousand. The                                                                   
damage  to the Fairbanks  Correctional  Center occurred  as a                                                                   
result  of   an  attempted   jailbreak.  The  fast-ferry   MV                                                                   
Fairweather sustained $350 thousand in hull damage.                                                                             
                                                                                                                                
Representative Holms  referred to the Fairbanks  Correctional                                                                   
Center  damage.  He noted  that  two  cells, which  cost  $75                                                                   
thousand each  when constructed, were damaged  in addition to                                                                   
a small  fence. He questioned  the costs associated  with the                                                                   
attempted jailbreak.                                                                                                            
                                                                                                                                
2:52:47 PM                                                                                                                    
                                                                                                                                
1(f)      Administration        Satellite Infrastructure                                                                        
          ($300.0)                                                                                                              
                                                                                                                                
Mr.  Swanson  observed  that   the  department  has  realized                                                                   
decreased rental costs for satellite  equipment. Section 1(f)                                                                   
represents  a  reduction  of   $300  thousand.  The  original                                                                   
estimated reduction was $500 thousand.                                                                                          
                                                                                                                                
2:55:08 PM                                                                                                                    
                                                                                                                                
7(c) Fund Capitalization        Information Services Fund                                                                       
     $6,243.4                                                                                                                   
                                                                                                                                
Mr. Swanson explained that the  request would be appropriated                                                                   
to  the  Information  Technology  Fund.  The  Fund  has  been                                                                   
depleted over  the past  several years,  due to cost  savings                                                                   
that were  not realized. The state  of Alaska has  taken back                                                                   
the  network and  is attempting  to rebuild  it. The  funding                                                                   
would allow  charge back  rates to  stay within the  budgeted                                                                   
amounts.  State of  Alaska Telecommunications  System  (SATS)                                                                   
and 2-Way  Radio removed from  statewide rate  allocation and                                                                   
funded separately with general funds.                                                                                           
                                                                                                                                
2:56:20 PM                                                                                                                    
                                                                                                                                
Representative  Chenault questioned how  much longer  and how                                                                   
much more money would need to be spent for disentanglement.                                                                     
                                                                                                                                
Mr.  Swanson observed  that there  is a  $3.6 million  dollar                                                                   
request for SATS  in the FY06 budget. It is a  big issue. The                                                                   
Administration  is  attempting   to  determine  a  sufficient                                                                   
charge back structure.                                                                                                          
                                                                                                                                
2:57:12 PM                                                                                                                    
                                                                                                                                
2         Commerce              Qualified Trade Association                                                                     
                                $158 GF                                                                                         
                                                                                                                                
JO   ELLEN    HANRAHAN,   ACTING   DIRECTOR,    DIVISION   OF                                                                   
ADMINISTRATIVE SERVICES, DEPARTMENT  OF COMMERCE, COMMUNITY &                                                                   
ECONOMIC DEVELOPMENT  explained  that the request  represents                                                                   
the difference  between the estimated  amount and  the actual                                                                   
amount paid  through the Alaska Travel  Industry Association.                                                                   
She  suggested  the  item  be   moved  to  the  ratifications                                                                   
section.                                                                                                                        
                                                                                                                                
3:00:49 PM                                                                                                                    
                                                                                                                                
4(a)      Education             ACPE                  $265.0                                                                    
                                                                                                                                
     Unanticipated increase in mainframe charges from Dept.                                                                     
    of Administration's Enterprise Technology Services.                                                                         
                                                                                                                                
KAREN REHFELD,  DEPUTY COMMISISONER, DEPARTMENT  OF EDUCATION                                                                   
AND EARLY  DEVELOPMENT discussed  the department's  requests.                                                                   
She observed that Item 4(a) is  attributed to loan servicing.                                                                   
Increased loan  volume resulted in an increase  for mainframe                                                                   
costs.  The amount  is more  than  they can  absorb in  their                                                                   
budget.                                                                                                                         
                                                                                                                                
3:02:09 PM                                                                                                                    
                                                                                                                                
4(b)      Education             Foundation Program                                                                              
                                                                                                                                
     Reduce the  FY 05 entitlement for public  school funding                                                                   
     due to a  decrease in projected enrollment;  an increase                                                                   
     in the  amount of  federal impact  aid that reduces  the                                                                   
     amount  of  state  aid;  and  the  actual  cost  of  the                                                                   
     supplemental funding floor.                                                                                                
                                                                                                                                
Ms.  Rehfeld  observed  that no  additional  money  is  being                                                                   
requested.  The appropriation  would  remain  in the  current                                                                   
year appropriation for the Public School Funding Program.                                                                       
                                                                                                                                
EDDY JEANS, DIRECTOR, EDUCATION  SUPPORT SERVICES, DEPARTMENT                                                                   
OF  EDUCATION  AND  EARLY  DEVELOPMENT,  clarified  that  the                                                                   
intent would  be for future  appropriations to remain  in the                                                                   
Fund.                                                                                                                           
                                                                                                                                
3:03:07 PM                                                                                                                    
                                                                                                                                
4(c)      Education             Library Operations    Costs                                                                     
          $30.0                                                                                                                 
                                                                                                                                
Ms. Rehfeld observed  that the request is in  relationship to                                                                   
a  librarian   job  class  study.  Fourteen   positions  were                                                                   
recommended for  a one-range  increase effective  January 15,                                                                   
2005. She clarified that the reclassification  study had been                                                                   
requested by the  department, but was not budgeted  for since                                                                   
they did not know when the study would be concluded.                                                                            
                                                                                                                                
3:04:30 PM                                                                                                                    
                                                                                                                                
7(a)      Fund Capitalization Debt Retirement Fund                                                                              
                                                                                                                                
     Increased capitalization  of the Debt Retirement Fund to                                                                   
     supplant a  shortfall in cigarette tax revenue  into the                                                                   
     School Fund - the estimate  for cigarette tax revenue is                                                                   
     reduced by  $800.0 from $30.2 million to  $29.4 million.                                                                   
     This   fully   funds  the   School   Construction   Debt                                                                   
     Reimbursement program in FY 05.                                                                                            
                                                                                                                                
Ms. Rehfeld  noted that Section  7(a) and 16(a)  are related.                                                                   
Section 7(a)  allows an additional  $800.0 thousand  for debt                                                                   
retirement. [The  funds are a  combination of  general funds,                                                                   
federal  funds, and other  funds: $551.1,  $3.5, 245.4  (DEED                                                                   
CIP)].                                                                                                                          
                                                                                                                                
3:04:46 PM                                                                                                                    
                                                                                                                                
16(a)     State Debt            School Debt Reimbursement                                                                       
Fund.                                                                                                                           
                                                                                                                                
     The School  Fund is reduced from $30.2  million to $29.4                                                                   
     million and  the Debt Retirement Fund is  increased from                                                                   
     $51,670,084 to $52,470,084.                                                                                                
                                                                                                                                
Ms.  Rehfeld  noted  that  Section 16(a)  is  a  fund  source                                                                   
change.  She  explained  that  cigarette  taxes  support  the                                                                   
School Construction  Debt Reimbursement  Fund. Cigarette  tax                                                                   
revenue  was short $800.0  thousand. The  shortfall is  being                                                                   
covered by the additional funds in Item 7(a).                                                                                   
                                                                                                                                
3:05:23 PM                                                                                                                    
                                                                                                                                
5         Fish & Game           Commercial Fisheries                                                                            
                                                                                                                                
     Language in sec.  1, ch. 158, SLA 2004, page  14 for the                                                                   
     Southeast Region  Fisheries Management  component should                                                                   
     have   been   for  the   entire   Commercial   Fisheries                                                                   
     appropriation.                                                                                                             
                                                                                                                                
TOM LAWSON, DIRECTOR, ADMINISTRATIVE  SERVICES, DEPARTMENT OF                                                                   
COMMUNITY AND ECONOMIC DEVELOPMENT  observed that the request                                                                   
fixes an  error in the FY05  operating budget and  allows for                                                                   
the  roll  forward of  FY05  year  end  funds for  test  fish                                                                   
receipts of all regions (instead  of just the SE region). The                                                                   
language  has been  in  the budget  since  FY03. Without  the                                                                   
language the department  would have to increase  the resource                                                                   
harvest.                                                                                                                        
                                                                                                                                
In response  to a question  by Representative  Weyhrauch, Mr.                                                                   
Lawson noted that current language  only allows the Southeast                                                                   
region to  roll forward. The intent  was for all  the regions                                                                   
to roll forward.                                                                                                                
                                                                                                                                
GERON  BRUCE,   DEPUTY  DIRECTOR,   DIVISION  OF   COMMERCIAL                                                                   
FISHERIES did not think that the  test fisheries were related                                                                   
to the buy back fisheries.                                                                                                      
                                                                                                                                
3:10:19 PM                                                                                                                    
                                                                                                                                
Representative  Croft observed that  a criticism of  the test                                                                   
fisheries  is  that  they  are  being used  as  a  source  of                                                                   
revenue. Mr. Lawson  explained that lapsing money  at the end                                                                   
of   FY04  is   approximately  $600.0.   The  department   is                                                                   
authorized in  FY05 to expend  approximately $2.5  million in                                                                   
test  fish  receipts.  The  department  does  not  intend  to                                                                   
harvest more. The  $600 thousand is budgeted  within the $2.5                                                                   
million test fisheries.                                                                                                         
                                                                                                                                
Representative  Croft questioned  how he  could determine  if                                                                   
the program  is truly being  used as a  test fishery or  as a                                                                   
source of revenue.  Mr. Lawson observed that  $1.2 million is                                                                   
actual  revenue generation.  Representative  Croft  concluded                                                                   
that half of the income is related to the testing function.                                                                     
                                                                                                                                
Mr. Bruce  clarified  that test  fish projects  are a mix  of                                                                   
projects that do  and don't pay for themselves.  He felt that                                                                   
a major effort  is being made to make sure  that the industry                                                                   
supports itself.                                                                                                                
                                                                                                                                
3:12:47 PM                                                                                                                    
                                                                                                                                
6         Fund Capitalization Fish and Game Fund                                                                                
                                                                                                                                
     Fish and Game Fund interest can't be spent by the                                                                          
     Department of Public Safety or the Department of Law                                                                       
     per Legislative Audit, December 2004.  A language                                                                          
     change is necessary to specifically appropriate the                                                                        
     interest earnings.                                                                                                         
                                                                                                                                
DAN SPENCER,  DIRECTOR, DIVISION OF ADMINISTRATIVE  SERVICES,                                                                   
DEPARTMENT OF  PUBLIC SAFETY explained  that section  6 would                                                                   
appropriate  $108  thousand  in interest  earned  by  certain                                                                   
deposits  into  the  Fish  and  Game  Fund.  Since  FY98  the                                                                   
legislature has  appropriated fines and penalties  related to                                                                   
enforcement of fish  and wildlife statutes, Title  16, to the                                                                   
Fish and Game  Fund. The money is then appropriated  from the                                                                   
Fund to  the Department  of Public  Safety and Department  of                                                                   
Law: 88 percent  to DPS and 12 percent DLAW.  The Division of                                                                   
Legislative Budget  and Audit has correctly  pointed out that                                                                   
the   interest   is   not   explicitly   addressed   in   the                                                                   
appropriation.                                                                                                                  
                                                                                                                                
3:13:53 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
14(a)     Public Safety         Capital                                                                                         
                                                                                                                                
     Additional National Marine Fisheries Service funding                                                                       
     for the existing FY 05 capital projects: Marine                                                                            
     Fisheries Patrol Improvements.  This increases the                                                                         
     amount from $1,080.3 to $1,250.0.                                                                                          
                                                                                                                                
Mr. Spencer explained  that section 14(a) is  an amendment to                                                                   
a  capital  project  for federal  funds,  relating  to  joint                                                                   
agreements  with   the  National  Marine   Fisheries  Service                                                                   
(NMFS).  The   NMFS  contracts  with  the  state   for  their                                                                   
employees to go out on state boats.  The state also does some                                                                   
dock  inspections for  NMFS.  The appropriation  would  allow                                                                   
additional contract work with NMFS.                                                                                             
                                                                                                                                
3:14:44 PM                                                                                                                    
                                                                                                                                
14(b)     Public Safety         Capital               $225.0                                                                    
                                                                                                                                
                                                                                                                                
          New Crime Scene Examination Enhancement projects.                                                                     
                                                                                                                                
Mr.  Spencer observed  that  the  request is  for  additional                                                                   
federal receipts  from a congressional appropriation  made at                                                                   
the end  of the past calendar  year. The request  would cover                                                                   
training for  state and local  law enforcement  personnel and                                                                   
provide for new technology to  improve crime scene processing                                                                   
time.                                                                                                                           
                                                                                                                                
3:15:14 PM                                                                                                                    
                                                                                                                                
7(b)      Fund Capitalization Debt Retirement Fund                                                                              
                                                                                                                                
     This  section appropriates  any lapsing  balances  as of                                                                   
     June 30,  2005 of federal  unrestricted receipts  to the                                                                   
     Debt  Retirement Fund.  (The amount  is unknown  at this                                                                   
     time.)                                                                                                                     
                                                                                                                                
JOAN BROWN,  OFFICE OF MANAGEMENT  AND BUDGET  explained that                                                                   
section 7(b) is  a catch all, which appropriates  any lapsing                                                                   
balances of federal unrestricted receipts.                                                                                      
                                                                                                                                
Representative   Croft   clarified   that  it   is   standard                                                                   
procedure.                                                                                                                      
                                                                                                                                
3:16:13 PM                                                                                                                    
                                                                                                                                
8(a)      Health          &          Social          Services                                                                   
          Behavioral Health: Behavioral Health Grants                                                                           
                                                                                                                                
     Substance abuse  prevention initiative so  Alaska's kids                                                                   
     are safe  and healthy -  Leadership Initiatives  to Keep                                                                   
     Children Alcohol-Free,  Reach Out Now,  Building Healthy                                                                   
     Futures,  Statewide  Multimedia   Campaign;  FY06  lapse                                                                   
     date.                                                                                                                      
                                                                                                                                
JANET  CLARKE, ASSISTANT  COMMISSIONER,  DIVISION OF  FINANCE                                                                   
AND  MANAGEMENT SERVICES,  DEPARTMENT  OF  HEALTH AND  SOCIAL                                                                   
SERVICES  noted that  section 8(a)  is a  FY05 windfall  item                                                                   
proposed by the Governor.                                                                                                       
                                                                                                                                
                                                                                                                                
8(b) Health & Soc Srvcs         Behavioral            Health:                                                                   
     Behavioral Health Administration                                                                                           
                                                                                                                                
     Substance abuse  prevention initiative so  Alaska's kids                                                                   
     are  safe and healthy  - Alaska  Local Options  Campaign                                                                   
     Project Coordinator; FY06 lapse date.                                                                                      
                                                                                                                                
8(c) Health & Soc Srvcs         Behavioral Health: Community                                                                    
     Action Prevention and Intervention Grants                                                                                  
                                                                                                                                
     Substance abuse prevention initiative so Alaska's kids                                                                     
     are safe  and healthy -  Alaska Local Options  Campaign;                                                                   
     FY06 lapse date.                                                                                                           
                                                                                                                                
Ms. Clark  observed that  sections 8(b) and  (c) are  part of                                                                   
the same project. The request  is for $4.5 million in general                                                                   
funds to develop  a comprehensive substance  abuse prevention                                                                   
program focusing  on children and adolescents.  She explained                                                                   
that  the   proposal  was  developed   by  the   Division  of                                                                   
Behavioral  Health  to  get  ahead  of  the  substance  abuse                                                                   
problem  in  Alaska.  The  division has  identified  3  or  4                                                                   
programs that  the federal government  has helped  produce in                                                                   
other states, which  they would like to replicate  in Alaska.                                                                   
These programs are outcome based.                                                                                               
                                                                                                                                
3:17:51 PM                                                                                                                    
                                                                                                                                
BILL  HOGAN,   DIRECTOR,  DIVISION   OF  MENTAL   HEALTH  AND                                                                   
DEVELOPMENTAL DISABILITIES,  DEPARTMENT OF HEALTH  AND SOCIAL                                                                   
SERVICES  discussed sections  8(a)  - (c).  He observed  that                                                                   
these sections  contain the Administration's  substance abuse                                                                   
prevention   package.   He  observed   that   Alaska  has   a                                                                   
significant substance  abuse problem. Alaska has  the highest                                                                   
illicit drug usage of any state  in the nation: 12 percent of                                                                   
the population  has used  an illicit drug  in the  last month                                                                   
(ages  12 and  older).  He  discussed programs,  which  would                                                                   
address underage  drinking, provide  mentoring for 11  and 12                                                                   
year  olds,  and  focus on  preschool  age  children  through                                                                   
family  interventions.  The  package  would  also  include  a                                                                   
statewide  media campaign  and  work with  villages on  local                                                                   
option issues.   He emphasized  prevention. The  programs are                                                                   
based  on  national  models.  He  maintained  that  there  is                                                                   
evidence to show  that these programs work.  He observed that                                                                   
every  dollar spent  on prevention  could save  up to $10  in                                                                   
later treatment or counseling costs.                                                                                            
                                                                                                                                
Representative Holms  questioned if they would  work with the                                                                   
Wellness Courts. Mr. Hogan affirmed  that Wellness Courts are                                                                   
a critical part of an overall effort.                                                                                           
                                                                                                                                
3:22:05 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  asked   for  an  explanation  of  the                                                                   
additional FY06 funds that have been bifurcated.                                                                                
                                                                                                                                
Ms.  Clark explained  that  the Department  recommended  that                                                                   
$1.5  million  from  their  FY06   TANF  funds  be  used  for                                                                   
additional support for prevention  programs. The general fund                                                                   
portion is in  the supplemental; federal receipts  are in the                                                                   
FY 06 budget.  The effort for  this part of the budget  is $6                                                                   
million dollars.                                                                                                                
                                                                                                                                
Representative  Hawker  asked  if money  is  currently  being                                                                   
placed in alcohol prevention programs.                                                                                          
                                                                                                                                
Ms. Clark responded  that $800 in state general  funds and $1                                                                   
million  in  federal  funds  are  currently  being  spent  on                                                                   
alcohol    prevention   programs.    Representative    Hawker                                                                   
questioned how  much is being  invested from the  increase in                                                                   
the alcohol tax.                                                                                                                
                                                                                                                                
Ms. Clark  clarified that  increased funds  from the  alcohol                                                                   
tax  are  going into  integrated  behavior  health  treatment                                                                   
grants,  which go  to a  myriad of  providers throughout  the                                                                   
state. The  Department is just  beginning to receive  outcome                                                                   
data.                                                                                                                           
                                                                                                                                
Mr.  Hogan noted  that preliminary  data shows  a 60  percent                                                                   
increase in productive activity  for individuals entering the                                                                   
behavior  health  system.  There  has  been  an  increase  in                                                                   
volunteering and a return to the  workforce. There has been a                                                                   
70 percent  reduction  in physical  health problems  entering                                                                   
the system.  There has  also been a  70 percent reduction  in                                                                   
those reporting  that they don't  have basic support  such as                                                                   
enough money to live or shelter.  This indicates that some of                                                                   
these individuals  have been able  to return to  their lives.                                                                   
There has  been a 21 percent  reduction in homelessness.  The                                                                   
data is based on 4,000 individuals.                                                                                             
                                                                                                                                
3:28:05 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  asked  how  much is  being  spent  on                                                                   
gathering data. Mr. Hogan noted  that a federal grant allowed                                                                   
the development  of a web-based  management system.  Even the                                                                   
smallest providers  in villages are  able to add data  to the                                                                   
system. Only federal money has been spent.                                                                                      
                                                                                                                                
Representative Hawker  questioned how the alcohol  funds were                                                                   
being spent.                                                                                                                    
                                                                                                                                
Mr. Hogan reassured him that alcohol  dollars are being spent                                                                   
on  substance  abuse programs.  Representative  Hawker  noted                                                                   
that there  have been  positive results,  but questioned  how                                                                   
new  general fund  spending can  be justified.  He asked  the                                                                   
balance in the Alcohol Fund.                                                                                                    
                                                                                                                                
Ms. Clark did not  have the data present, but  noted that the                                                                   
Administration has  requested $17.2 million in  alcohol funds                                                                   
primarily for alcohol treatment programs.                                                                                       
                                                                                                                                
3:30:22 PM                                                                                                                    
                                                                                                                                
In response to a question by Representative  Kelly, Ms. Clark                                                                   
noted that overviews  on the proposed programs  were provided                                                                   
to   the   Department   of   Health   and   Social   Services                                                                   
subcommittee.                                                                                                                   
                                                                                                                                
Representative  Hawker noted  that  testimony indicated  that                                                                   
evaluations were  not being done on regional  grants and that                                                                   
some were  perceived as entitlements.  He expressed  the need                                                                   
for performance measures.                                                                                                       
                                                                                                                                
3:33:06 PM                                                                                                                    
                                                                                                                                
Mr.  Hogan  stated   that  he  would  like   to  move  toward                                                                   
performance contracting  with the clear expectation  that the                                                                   
state  is   purchasing  outcomes.   The  current   system  is                                                                   
archaistic. There are 230 grants  to providers, which is down                                                                   
from  330. There  is  a tremendous  amount  of  work for  the                                                                   
system to change.  He cautioned against a  collapse occurring                                                                   
if people cannot produce expected results.                                                                                      
                                                                                                                                
3:34:31 PM                                                                                                                    
                                                                                                                                
Representative  Holms   observed  that  there   had  been  no                                                                   
discussion  on  recidivism.  He  stressed the  need  to  have                                                                   
something quantifiable.                                                                                                         
                                                                                                                                
Mr. Hogan  noted that preliminary  data shows that  there has                                                                   
been  a positive  change in  60 percent  of the  individuals.                                                                   
There  has been  a less  dramatic  change in  40 percent.  He                                                                   
stated that he was willing to up date the committee.                                                                            
                                                                                                                                
Representative Holms  noted that it  is important to  look at                                                                   
performance   measures  before   more  money   is  added   to                                                                   
prevention programs that may not  be justifiable. He stressed                                                                   
that quantifiable data would be helpful.                                                                                        
                                                                                                                                
Mr.  Hogan  stressed  that  prevention,  early  intervention,                                                                   
treatment and  support in recovery  is a continuum  system of                                                                   
care.                                                                                                                           
                                                                                                                                
3:38:24 PM                                                                                                                    
                                                                                                                                
Representative Joule questioned  if there is a partnership in                                                                   
working with communities that are successful.                                                                                   
                                                                                                                                
Mr. Hogan  stated that it is the  intent to build on  what is                                                                   
already  working   in  the  communities.  He   stressed  that                                                                   
interventions need  to occur with the individual,  family and                                                                   
community. Solutions  should come from within  the community.                                                                   
He stressed the need for community input to solve problems.                                                                     
                                                                                                                                
3:39:50 PM                                                                                                                    
                                                                                                                                
Representative  Holms asked how  they know  who are  the most                                                                   
effective providers and how they are measured.                                                                                  
                                                                                                                                
Mr.  Hogan observed  that  providers  are measured  by  their                                                                   
ability to  provide positive  outcomes. He acknowledged  that                                                                   
the attitude of entitlement needs to change.                                                                                    
                                                                                                                                
3:41:06 PM                                                                                                                    
                                                                                                                                
8(d)      Health & Soc Srvcs    Juvenile Justice:                                                                               
                                                                                                                                
     Probation Services         Court-ordered special needs                                                                     
     services for children in juvenile facilities.  Last                                                                        
     session the Legislature asked that these costs be                                                                          
     brought forward as supplementals.                                                                                          
                                                                                                                                
Ms.  Clark discussed  section  8(d), which  is  a request  of                                                                   
$194,100,000 in general funds  for actual court ordered costs                                                                   
and the  estimated amount  needed to  carry them through  the                                                                   
rest of the fiscal year.                                                                                                        
                                                                                                                                
3:42:32 PM                                                                                                                    
                                                                                                                                
8(e)      Health & Soc Srvcs    Public Assistance:                                                                              
                                                                                                                                
     Adult   Public  Assistance   Savings  due  to   caseload                                                                   
     reduction  and programmatic  changes, particularly  last                                                                   
     year's changes to interim assistance.                                                                                      
                                                                                                                                
Ms. Clark observed that section  8(e) relate to reductions in                                                                   
caseload  in   the  Adult  Public  Assistance   program.  The                                                                   
department provides a cash supplement  to those on SSI (Adult                                                                   
Public  Assistance   Program),   which  allows  seniors   and                                                                   
disabled  to  remain  independent  in their  own  homes.  The                                                                   
program has been  growing at approximately 5  percent a year.                                                                   
The department  started a program  in FY04 to looked  at ways                                                                   
to  contain costs.  The  department  has been  successful  in                                                                   
lowering interim  assistance clients. They are  doing reviews                                                                   
of  those that  are  applying  upfront. The  reductions  were                                                                   
realized by  moving the  medical review  to the beginning  of                                                                   
the interim assistance  application process.   The review had                                                                   
occurred at the end of the system  through a determination by                                                                   
vocational  rehabilitation.  There has  been  a reduction  in                                                                   
caseload to  approximately 2.4 -  2.9 percent. There is  a $2                                                                   
million reduction in general funds.                                                                                             
                                                                                                                                
3:44:27 PM                                                                                                                    
                                                                                                                                
8(e)      Health & Soc Srvcs    Public Assistance:                                                                              
                                                                                                                                
     General Relief Assistance Projected    FY    05   lapse.                                                                   
     Approximately 80%  of funds are used to  pay for funeral                                                                   
     and burial  expenses of  indigent deceased  persons; the                                                                   
     remainder is  used to assist low-income  individuals and                                                                   
     families who are facing eviction.                                                                                          
                                                                                                                                
Ms.  Clark noted  that  80 percent  of  the program  provides                                                                   
burials for indigent deceased.                                                                                                  
                                                                                                                                
3:45:58 PM                                                                                                                    
                                                                                                                                
8(f)      Health & Soc Srvcs    Departmental          Support                                                                   
Services:                                                                                                                       
                                                                                                                                
     BASIC Grants               Provides     vital     social                                                                   
     service  program support  to  entities directly  serving                                                                   
     needy Alaskans  across the state.  Funding  will be used                                                                   
     on collaborative, community-based  activities addressing                                                                   
     basic  needs  such as  food,  shelter and  health  care.                                                                   
     With FY06 lapse date.                                                                                                      
                                                                                                                                
Ms. Clark explained  that section 8(f) is a  windfall program                                                                   
with an extended  lapse date. She noted that it  is a request                                                                   
of  $1 million  for  a  new grant  program:  Building  Alaska                                                                   
Through Successful  Initiatives  in Communities. The  program                                                                   
will address basic  needs such as food and  shelter. It would                                                                   
be a statewide  program. She observed that there  has been an                                                                   
increased need in food banks around the state.                                                                                  
                                                                                                                                
ROBERT  BUTTCANE,  COORDINATOR,   FAITH-BASED  AND  COMMUNITY                                                                   
INITIATIVES,  DEPARTMENT   OF  HEALTH  AND   SOCIAL  SERVICES                                                                   
discussed the  request. He gave  examples of activities  that                                                                   
would occur under the program.  Money would be made available                                                                   
to support  the combined  resources of  community groups  and                                                                   
coalitions  to  fill  in  the basic  gaps  in  health,  food,                                                                   
shelter and other areas.                                                                                                        
                                                                                                                                
3:49:29 PM                                                                                                                    
                                                                                                                                
Representative  Hawker referred  to  human services  matching                                                                   
grants. He questioned why a new  program is needed when there                                                                   
is an existing program.                                                                                                         
                                                                                                                                
Ms.  Clark  noted  that the  Human  Services  Matching  Grant                                                                   
Program only applies to communities  over 50,000 and services                                                                   
three communities:  Anchorage, Fairbanks and MatSu.  No other                                                                   
communities are eligible.                                                                                                       
                                                                                                                                
Representative  Hawker   observed  that  the   Administration                                                                   
lobbied  two  years  ago  to  eliminate  the  human  services                                                                   
matching  grant   program  and   questioned  the   change  in                                                                   
philosophy.                                                                                                                     
                                                                                                                                
3:50:50 PM                                                                                                                    
                                                                                                                                
Ms. Clark  acknowledged that  the program  was zeroed  out in                                                                   
the  Governor's original  submission. The  program was  added                                                                   
back  in the  amended budget  after the  Governor heard  from                                                                   
communities  that it  is an  important  component of  service                                                                   
delivery. There  was a change  of direction, as  the Governor                                                                   
was convinced  that the  program provides  a good service  to                                                                   
the larger communities  and that the new program  would serve                                                                   
smaller communities.                                                                                                            
                                                                                                                                
Representative  Hawker asked if  this was an essential  state                                                                   
service.  Ms. Clarke responded  that it is a state service to                                                                   
provide the opportunity  to look to where there  are problems                                                                   
in communities and to provide solutions.                                                                                        
                                                                                                                                
3:53:06 PM                                                                                                                    
                                                                                                                                
8(g)      Health & Soc Srvcs    Boards and Commissions:                                                                         
                                                                                                                                
     Governor's Advisory Council on Faith-Based and                                                                             
     Community Initiatives FY 05 costs for Office                                                                               
     established by Administrative Order 221.                                                                                   
                                                                                                                                
Ms.  Clarke  observed that  section  8(g)  is a  request  for                                                                   
$122.1 thousand  in general funds  to cover the costs  of the                                                                   
faith-based initiatives  within the Department  of Health and                                                                   
Social  Services.    The  Council   will  jointly  serve  and                                                                   
facilitate  communication  and collaboration  between  faith-                                                                   
based and  community organizations.   Four departments  added                                                                   
money to start  the Council: Department of Health  and Social                                                                   
Services,  Military  and  Veterans   Affairs,  Department  of                                                                   
Corrections   and   Department   of   Labor   and   Workforce                                                                   
Development.  The Department  of Health  and Social  Services                                                                   
will use  part of their high  performing TANF funds  in FY05.                                                                   
The other departments would be reimbursed by the request.                                                                       
                                                                                                                                
Mr.  Buttcane  noted  that the  Administration  supports  the                                                                   
faith-based and community imitative  because of the payoff it                                                                   
brings to the State.  The request  would allow a single point                                                                   
of  contact to  organize  and  disseminate information.    It                                                                   
would  create  a  coordinating  force  to  provide  technical                                                                   
assistance  in grant  writing,  establish non-profit  status,                                                                   
and   provide  board   training  to   help  support   service                                                                   
organization.  The  request  would   provide  a  trained  and                                                                   
informed government staff regarding  what is okay with faith-                                                                   
based community activities.                                                                                                     
                                                                                                                                
Mr.  Buttcane observed  that  the intent  is  to do  business                                                                   
differently. He maintained that  if faith-based organizations                                                                   
were  not  helped  to increase  capacity,  then  there  would                                                                   
continue to be small-dedicated  servants, without an increase                                                                   
in productivity.   The increased organizational  capacity, in                                                                   
partnership with  the government,  would serve to  meet needs                                                                   
that are falling through the cracks.   He mentioned connected                                                                   
autonomy,  which  is  key to  maximizing  resources  of  each                                                                   
individual  group.  It  would teach  faith-based  groups  and                                                                   
government entities  to communicate. He maintained  that with                                                                   
coordination   they   would   be   better   able   to   bring                                                                   
opportunities to  the table.   He requested money  to support                                                                   
an effort  to work  with local groups.   The payoff  provides                                                                   
grant money  to various groups.    The initiatives  will help                                                                   
capitalize  and  reduce  demands  to  leverage  the  existing                                                                   
resources.   He  encouraged the  Legislature  to support  the                                                                   
Governor in  the initiative.   He observed that is  a growing                                                                   
momentum  available  and  asserted   that  the  State  should                                                                   
compete for these federal funds.                                                                                                
                                                                                                                                
4:02:28 PM                                                                                                                    
                                                                                                                                
Representative Stoltze  asked if the Lieutenant  Governor was                                                                   
involved in the Council.  Mr. Buttcane replied that he was.                                                                     
                                                                                                                                
Representative   Hawker  asked   the  on  going   anticipated                                                                   
operating  expense for  the Council.    Mr. Buttcane  replied                                                                   
that $420 thousand is requested  in the FY06 budget. The FY05                                                                   
supplemental request would return funds to the departments.                                                                     
                                                                                                                                
Representative Hawker  observed that the request  is a "huge"                                                                   
leverage of  public funds and  noted that it is  pure general                                                                   
funds  with  no  matching.  He  questioned  if  general  fund                                                                   
programs are the best use of the funds.                                                                                         
                                                                                                                                
4:05:04 PM                                                                                                                    
                                                                                                                                
8(h)      Health & Soc Srvcs    Public Health:                                                                                  
                                                                                                                                
     Vital Statistics                                                                                                           
     Full funding for lease costs for Juneau office.                                                                            
                                                                                                                                
Ms.  Clarke noted  that the  request  would be  used for  the                                                                   
Bureau to spend receipt-supported  services that they earned.                                                                   
There is a request in the budget for $300,000 dollars.                                                                          
                                                                                                                                
4:06:03 PM                                                                                                                    
                                                                                                                                
19(a) Health and Social Services    Medical Assistance                                                                          
          $13,390,029.73                                                                                                        
                                                                                                                                
Ms.  Clarke noted  that the  request is  a ratification.  She                                                                   
explained that  there was  a gap in  the fair share  receipts                                                                   
amount estimated  and the actual amount generated.   There is                                                                   
no ratification needed for FY04.                                                                                                
                                                                                                                                
Representative  Hawker  commented  that  the balance  in  the                                                                   
Alcohol  Fund  carried  over  from the  prior  year  is  $3.7                                                                   
million dollars.                                                                                                                
                                                                                                                                
4:07:28 PM                                                                                                                    
                                                                                                                                
DEPARTMENT OF CORRECTIONS                                                                                                     
                                                                                                                                
3 (A) Institutional Facilities  $350.0                                                                                          
                                                                                                                                
MARC ANTRIM,  COMMISSIONER, DEPARTMENT OF  CORRECTIONS, spoke                                                                   
to  section 3(a).  He noted  that  the department  took a  7%                                                                   
reduction  in  FY05  of  $509  thousand  from  supplies.  The                                                                   
department  is asking  for a  $350  thousand supplemental  to                                                                   
replace  the  reduction.  The   department  will  absorb  the                                                                   
balance.  The reduction  was based  on  savings in  commodity                                                                   
purchases anticipation from deploying  e-commerce technology.                                                                   
Deployment  has been  delayed and  the savings  has not  been                                                                   
realized.                                                                                                                       
                                                                                                                                
3(B) Institutional Facilities Fuel cost increases.75.0                                                                          
                                                                                                                                
Commissioner  Antrim noted  that  the funds  would be  spread                                                                   
throughout the  department. The total  cost was in  excess of                                                                   
$100 thousand. The department will absorb the balance                                                                           
                                                                                                                                
19(c) Parole Board                                                                                                              
                                                                                                                                
SHARLEEN    GRIFFIN,    ACTING    DIRECTOR,    DIVISION    OF                                                                   
ADMINISTRATIVE SERVICES, DEPARTMENT  OF CORRECTIONS, spoke to                                                                   
the  request.  She observed  that  it  is a  ratification  of                                                                   
$62,129.00 for the  Parole Board. The request is  a result of                                                                   
a  recommendation   by  the  Legislative  Budget   and  Audit                                                                   
Committee to the out-of-state  contractual amount. The Parole                                                                   
Board was not funded to handle hearings in Arizona.                                                                             
                                                                                                                                
4:10:31 PM                                                                                                                    
                                                                                                                                
Representative Chenault noted that the bill would be held                                                                       
for further consideration.                                                                                                      
                                                                                                                                
HB 134 was HELD in Committee.                                                                                                   
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 4:11 P.M.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects