Legislature(2007 - 2008)HOUSE FINANCE 519

01/31/2007 01:30 PM House FINANCE


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01:41:04 PM Start
01:42:08 PM Overview: Alaska Department of Labor and Workforce Development
02:44:37 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: TELECONFERENCED
- Department of Labor and Workforce
Development
<Teleconference Listen Only>
                  HOUSE FINANCE COMMITTEE                                                                                       
                      January 31, 2007                                                                                          
                         1:41 p.m.                                                                                              
                                                                                                                                
 CALL TO ORDER                                                                                                                
                                                                                                                                
 Co-Chair Meyer called the House Finance Committee meeting to                                                                   
 order at 1:41:04 PM.                                                                                                         
                                                                                                                                
 MEMBERS PRESENT                                                                                                              
                                                                                                                                
 Representative Mike Chenault, Co-Chair                                                                                         
 Representative Kevin Meyer, Co-Chair                                                                                           
 Representative Bill Stoltze, Vice-Chair                                                                                        
 Representative Harry Crawford                                                                                                  
 Representative Mike Hawker                                                                                                     
 Representative Reggie Joule                                                                                                    
 Representative Mary Nelson                                                                                                     
 Representative Bill Thomas, Jr.                                                                                                
 Representative Les Gara                                                                                                        
                                                                                                                                
 MEMBERS ABSENT                                                                                                               
                                                                                                                                
 Representative Richard Foster                                                                                                  
 Representative Mike Kelly                                                                                                      
                                                                                                                                
 ALSO PRESENT                                                                                                                 
                                                                                                                                
 Charles  "Click"  Bishop,   Acting  Commissioner,   Alaska                                                                     
 Department of Labor and  Workforce Development; Guy Bell,                                                                      
 Director, Division of Administrative Services, Department of                                                                   
 Labor and Workforce Development; Representative Bob Buch;                                                                      
 Representative Mark Neuman                                                                                                     
                                                                                                                                
 PRESENT VIA TELECONFERENCE                                                                                                   
                                                                                                                                
 None                                                                                                                           
                                                                                                                                
 GENERAL SUBJECT(S):                                                                                                          
                                                                                                                                
     ^OVERVIEW: ALASKA DEPARTMENT OF LABOR AND WORKFORCE                                                                      
                        DEVELOPMENT                                                                                           
                                                                                                                                
The  following  overview was  taken  in  log  note  format.                                                                     
Handouts will be  on file with the House  Finance Committee                                                                     
through  the 25th  Legislative Session,  contact  465-6814.                                                                     
After the 25th  Legislative Session they will be  available                                                                     
through the Legislative Library at 465-3808.                                                                                    
                                                                                                                              
                                                                                                                                
 TIME        SPEAKER        DISCUSSION                                                                                      
 1:42:08 PM CLARK "CLICK" Introduced members of the Department.                                                               
             BISHOP, ACTING                                                                                                     
            COMMISSIONER                                                                                                        
            OF LABOR AND                                                                                                        
            WORKFORCE                                                                                                           
            DEVELOPMENT                                                                                                       
1:43:41 PM GUY        BELL, Referred   to   a   handout,   "Alaska                                                            
            ASSISTANT       Department of Labor and Workforce                                                                   
            COMMISSIONER,   Development  FY  08  Operating  Budget                                                              
            DEPARTMENT  OF  January 31, 2007" (copy on  file).  He                                                              
            LABOR      AND quoted from Governor Palin's State of                                                                
            WORKFORCE       the State speech, as seen on page 2 of                                                              
            DEVELOPMENT     the handout.                                                                                      
1:45:20 PM Mr. Bell         Shared the Department of Labor and                                                                
                            Workforce Development's (DLWD) mission                                                              
                            depicted on page 3 of the handout.                                                                
1:45:51 PM Mr. Bell         Highlighted key program accomplishments                                                           
                            portrayed on page 4.                                                                              
1:46:52 PM  Commissioner    Emphasized the  Department's  goal  of                                                            
            Bishop          having a 2 percent reduction in the                                                                 
                            rate   of   lost   workday  accidental                                                              
                            injuries and illnesses.                                                                           
1:47:57 PM Mr. Bell         Reviewed the FY 08 budget of $176.9                                                               
                            million as shown on page 5.                                                                       
1:48:35 PM Mr. Bell         Related   the   challenges    to   the                                                            
                            Department as depicted on page 6.   He                                                              
                            spoke of  the  number  of nonresidents                                                              
                            working  in   the  state,   which  has                                                              
                            increased from  18.4  percent to  19.1                                                              
                            percent in  2005  due  to  the vibrant                                                              
                            economy and  the  shortage of  skilled                                                              
                            workers in the state.                                                                             
1:50:47 PM  Co-Chair Meyer  Pointed  out  that there  were  25,600                                                            
                            Alaskans unemployed, yet  almost 4,000                                                              
                            nonresident workers came to Alaska for                                                              
                            jobs.  He suggested putting Alaskans to                                                             
                            work  before  recruiting nonresidents.                                                              
                            He wondered if the issue is non-skilled                                                             
                            workers.   Commissioner Bishop replied                                                              
                            that he believes that Alaskan employers                                                             
                            could do a  better job of reaching out                                                              
                            to resident skilled workers.   He also                                                              
                            suggested ways to close the gap on the                                                              
                            nonresident numbers and ways to utilize                                                             
                            Alaskans.                                                                                         
1:52:38 PM  Representative  Asked how  many of  those nonresidents                                                            
            Thomas          are returning college students.  Mr.                                                                
                            Bell addressed how  those students are                                                              
                            tracked.   He  added that  it is  more                                                              
                            likely  that  students  will  stay  in                                                              
                            Alaska if they go to college in Alaska.                                                           
1:53:53 PM Vice-Chair       Requested data on General Education                                                               
            Stoltze         Development (GED) diplomas.  Mr. Bell                                                               
                            informed the committee about ways GED                                                               
                            data  can  be  requested.   Vice-Chair                                                            
                            Stoltze  asked   how  unemployment  was                                                             
                            defined  and  whether the  people  were                                                             
                            actively  seeking  employment  or  were                                                             
                            seasonal  employees.    Mr.  Bell  said                                                             
                            about 5,600 are seasonal employees.                                                               
 1:55:51 PM Commissioner    Suggested sorting unemployment data by                                                            
             Bishop         "trade group".  Vice-Chair Stoltz said                                                              
                            complete  information makes for  better                                                             
                           decisions.                                                                                         
 1:56:39 PM Representative Mentioned his experience with the iron                                                             
             Crawford       workers apprenticeship program.  There                                                              
                            is a seasonal need to move to where the                                                             
                            jobs are and  that means a loss of jobs                                                             
                            to the state.                                                                                     
 1:57:31 PM Mr. Bell        Pointed to page 7 of the handout, which                                                           
                            depicts a challenge to the Department -                                                             
                            loss  of federal funding and increasing                                                             
                            costs.   Retirement cost  increases are                                                             
                            the main cost driver.  The challenge is                                                             
                            to  maintain  services with  increasing                                                             
                            costs.                                                                                            
 1:59:10 PM Co-Chair Meyer Asked if some federal funding was lost                                                             
                            last year.  Mr. Bell said it was in the                                                             
                            unemployment insurance program which is                                                             
                            driven  by  volumes, which  were  down.                                                             
                            Slide  8  shows the  elimination of  53                                                             
                            full-time  positions  due   to  reduced                                                             
                            federal  funding.   The  Department  is                                                             
                            requesting  general fund increments  to                                                             
                            offset  federal funding reductions  and                                                             
                            is looking at paring back services.                                                               
 2:00:47 PM  Co-Chair       Asked if the Department is proposing to                                                           
             Chenault       use state general funds to pay for                                                                  
                            costs to  PERS for state employees that                                                             
                            are  funded through a  federally funded                                                             
                            program.     Mr.  Bell  said  that   is                                                             
                            correct.     He   explained  that   the                                                             
                            unemployment      insurance     program                                                             
                            historically   has  been  funded   with                                                             
                            federal money  and this budget proposal                                                             
                            would  inject  general fund  into  that                                                             
                            program  to maintain levels of  service                                                             
                            to those seeking unemployment insurance                                                             
                            benefits.   Co-Chair Chenault asked  if                                                             
                            there were  any federal funds available                                                             
                            to  cover retirement costs.   Mr.  Bell                                                             
                            replied that the unemployment insurance                                                             
                            program is  workload driven and the job                                                             
                            service  program  is   allocated on   a                                                             
                            declining percentage formula.                                                                     
 2:02:57 PM Mr. Bell        Explained page 9, which described how                                                             
                            the   Department  addresses   preparing                                                             
                            Alaska's youth for the workforce.                                                                 
2:04:11 PM  Commissioner    Addressed the dropout  rate of Alaskan                                                            
            Bishop          students - less than 60 percent                                                                     
                            graduate high school.   He  shared his                                                              
                            own experience  with positive benefits                                                              
                            of vocational education programs.                                                                 
2:05:42 PM  Co-Chair Meyer  Agreed   that   vocational   education                                                            
                            programs are important.                                                                           
2:06:03 PM Vice-Chair       Inquired     how    successful     the                                                            
            Stoltz          commissioner would be in implementing                                                               
                            the  Department's vocational education                                                              
                            goals.  Commissioner Bishop stated that                                                             
                            he  would  be  very  successful.    He                                                              
                            pointed    to   his    good    working                                                              
                            relationship   with   the   university                                                              
                            system.                                                                                           
2:07:21 PM Mr. Bell         Referred to page 10 - "Improving the                                                              
                            success  of  Alaska's students".    He                                                              
                            shared some  of the focuses  of Alaska                                                              
                            Youth First.  He informed the committee                                                             
                            of the  successes of  the  King Career                                                              
                            Center.                                                                                           
2:10:17 PM  Representative  Asked if  the $4.3  appropriation is a                                                            
            Hawker          single appropriation spread throughout                                                              
                            various functions in the budget.  Mr.                                                               
                            Bell replied that it is in one spot in                                                              
                            the Division  of Business Partnerships                                                              
                            under Business Services on  page 22 of                                                              
                            the budget  short form.   He clarified                                                              
                            the  $4.3  amount  for   Representative                                                             
                            Hawker.                                                                                           
2:11:39 PM Mr. Bell         Highlighted the Alaska Vocational-                                                                
                            Technical Center located in Seward, as                                                              
                            explained on  page 11.    He mentioned                                                              
                            other  training  centers  included  in                                                              
                            grant funding.                                                                                    
2:12:49 PM Co-Chair         Asked how Savec in King Salmon was                                                                
            Chenault        funded.  Mr. Bell explained that the                                                                
                            allocation for  Savec  was  determined                                                              
                            through   the   Technical   Vocational                                                              
                            Education Program, a special account in                                                             
                            the general fund that is distributed by                                                             
                            a  formula  set  by  the  legislature.                                                              
                            Savec  receives  4   percent  of  that                                                              
                            allocation each year.   The Department                                                              
                            is  a  pass-through agency  for  those                                                              
                            dollars.                                                                                          
2:13:36 PM Mr. Bell         Spoke about the State Training and                                                                
                            Employment Program (STEP) shown on page                                                             
                            12.   He termed  it a  very successful                                                              
                            program which would expire on June 30,                                                              
                            2008,   unless    extended   by    the                                                              
                          legislature.                                                                                        
2:15:18 PM Mr. Bell         Highlighted gas pipeline workforce                                                                
                            preparation programs  as shown on  page                                                             
                            13.   The focus is on training for jobs                                                             
                            available  today.    He  discussed  the                                                             
                            Fairbanks   Joint  Pipeliner   Training                                                             
                            program  funding, which  has been  very                                                             
                            successful,  and  the   funding  for  a                                                             
                            Fairbanks       Training      Facility.                                                             
                            Commissioner  Bishop  added   that  the                                                             
                            Pipeliner  Training  is   proven,  does                                                             
                            work,  and  is  his commitment  to  the                                                             
                            industry.                                                                                         
 2:18:01 PM Representative Pointed out that many workers will be                                                              
             Joule          leaving jobs in their communities to                                                                
                            take  pipeline  jobs.     He  suggested                                                             
                            working  with communities to fill  jobs                                                             
                            that  are left unfilled.   Commissioner                                                             
                            Bishop said that is the same discussion                                                             
                            he  had with  his staff  earlier today.                                                             
                            He  agreed that those jobs had  to also                                                             
                            be considered.                                                                                    
 2:20:20 PM Mr. Bell        Emphasized the Alaska hire commitment                                                             
                            by the developers of the gas pipeline.                                                            
 2:21:19 PM Mr. Bell        Explained a graph on page 14, which                                                               
                            compares  the unemployment rate in  the                                                             
                            U.S. and Alaska between 1996 and 2006.                                                            
 2:22:16 PM REPRESENTATIVE Spoke of a concern about reaching young                                                            
             MARK NEUMAN    adults in rural Alaska at risk for                                                                  
                            dropping  out.   He wondered who  would                                                             
                            teach   those   students  job   skills.                                                             
                            Commissioner Bishop said the Department                                                             
                            is working on that problem. He spoke of                                                             
                            his  experience with training in  rural                                                             
                            Alaska.                                                                                           
 2:24:25 PM Representative Asked for an explanation of "business                                                              
             Hawker         services" in the Department's budget                                                                
                            document.     Mr.   Bell  stated   that                                                             
                            business  services  deals   with  State                                                             
                            Training and  Employment Program (STEP)                                                             
                            and  with federal receipts.  He further                                                             
                            explained  the $32  million in  federal                                                             
                            receipts  and business  services, money                                                             
                            that comes  from the U.S. Department of                                                             
                            Labor        Employment        Training                                                             
                            Administration,   a    combination   of                                                             
                            formula  money and  money derived  from                                                             
                            competitive awards.                                                                               
 2:26:31 PM Representative Asked where that money goes.  Mr. Bell                                                             
             Hawker         replied that $3 million goes to High                                                                
                            Need  Youth.    Two  or  three  million                                                             
                            dollars goes to the Adult Program - job                                                             
                            services and  training for out of  work                                                             
                            adults. Some  of the money goes to  the                                                             
                            Dislocated  Worker Program,  and  Rapid                                                           
                            Response  Program,  which  deals  with                                                              
                            imminent closures of work sites.                                                                  
2:28:27 PM Representative Asked what the unallocated cut target                                                               
            Hawker          in general funds is.  Mr. Bell replied                                                              
                            $2.5 million.    Representative Hawker                                                              
                            noted that the existing general fund is                                                             
                            slightly under $12 million.   Mr. Bell                                                              
                            replied that the  total budget request                                                              
                            is  $30  million   in  general  funds.                                                              
                            Representative Hawker asked  where Mr.                                                              
                            Bell envisions finding $2.5 million of                                                              
                            efficiencies.     Mr.   Bell   replied                                                              
                            throughout       the       department.                                                              
                            Representative  Hawker  spoke  of  his                                                              
                            expertise  with  the   human  services                                                              
                            budget where  almost all  general fund                                                              
                            money is leveraged with matching money.                                                             
                            He wondered if  that is also  true for                                                              
                            the Department of  Labor and Workforce                                                              
                            Development.  Mr. Bell said it is true                                                              
                            in a number of areas such as Vocational                                                             
                            Rehabilitation   and    Adult    Basic                                                              
                           Education.                                                                                         
2:30:30 PM REPRESENTATIVE Voiced       appreciation    for     the                                                            
            BOB BUCH        Commissioner's service to the state.                                                                
                            He said the state is  not doing a very                                                              
                            good  job  of  transferring  education                                                              
                            facilities to jobs.  He requested ideas                                                             
                            for turning around the poor graduation                                                              
                            rate  and  lack  of  job-trained young                                                              
                            adults. Commissioner  Bishop suggested                                                              
                            that having more jobs would help.                                                                 
2:33:01 PM Representative  Pointed out that the current way the                                                               
            Nelson          foundation formula is written, three                                                                
                            major categories comprise 20 percent of                                                             
                            the state's allocation: special needs,                                                              
                            bi-lingual, bi-cultural education, and                                                              
                            vocational technical.   She maintained                                                              
                            that any one of those areas could take                                                              
                            up 20 percent  of a district's budget.                                                              
                            She asked what a better target might be                                                             
                            for vocational technical needs under a                                                              
                            new foundation  formula.  Commissioner                                                              
                            Bishop   suggested   more   vocational                                                              
                            opportunities in the high  school.  He                                                              
                            deferred  to  Mr.   Bell  for  funding                                                              
                            details.     Mr.  Bell   suggested  an                                                              
                            alternate  funding   outside  of   the                                                              
                            Department of Education and outside of                                                              
                            the  foundation formula,  such  as  an                                                              
                            investment program with the Department                                                              
                            of  Labor  or  through the  Governor's                                                              
                            Office.                                                                                           
 2:35:36 PM Representative  Suggested auditing the Department of                                                              
             Gara           Labor's budget to weed out duplication                                                              
                            and  waste.  He wondered how  long that                                                             
                            would  take.  Mr.  Bell maintained that                                                             
                            the  answer is not auditing, but rather                                                             
                            to  look at  the services provided  and                                                             
                            ask   how  they  can  continue  on   an                                                             
                            adequate level, and cut operating costs                                                             
                            without  impact  on  the  public.    He                                                             
                            suggested  looking  at  operating  more                                                             
                            efficiently   through   the   use    of                                                             
                           technology.                                                                                        
 2:38:07 PM Representative  Suggested avoiding duplication and                                                                
             Gara           waste when examining the Department's                                                               
                            budget.   He asked about the closing of                                                             
                            an  Anchorage job training office.  Mr.                                                             
                            Bell thought it  was a consolidation of                                                             
                            two   programs  where   positions  were                                                             
                            eliminated.       Representative   Gara                                                             
                            wondered if the outcome was successful.                                                             
                            Mr. Bell thought it was.                                                                          
 2:40:07 PM Representative  Inquired    about    making    training                                                           
             Gara           facilities and housing available to                                                                 
                            adults  from rural areas.   He wondered                                                             
                            about  housing  assistance.   Mr.  Bell                                                             
                            reported  a high success  with bringing                                                             
                            people  from around  the  state to  the                                                             
                            pipeline        training       program.                                                             
                            Commissioner  Bishop  stated  that   43                                                             
                            percent of  the pipeline training group                                                             
                            came       from       outside       the                                                             
                            Fairbanks/Anchorage  area.   He  agreed                                                             
                            that  new  housing facilities  will  be                                                             
                            needed for new programs.                                                                          
 2:42:14 PM Representative Spoke of opportunities the Department                                                              
             Joule          has ahead of it to redefine vocational                                                              
                            education.   He  suggested a  new  high                                                             
                            school  vocational training  structure,                                                             
                            such   as  is  done  in  Europe.     He                                                             
                            described what it  could potentially do                                                             
                            for  rural areas.   Commissioner Bishop                                                             
                            agreed.                                                                                           
 2:44:37 PM Representative Mentioned    his    experience  as    an                                                           
             Crawford       organizer for the iron workers' union.                                                              
                            He  recalled the loss of office workers                                                             
                            over  time.  He  suggested it would  be                                                             
                            difficult to  find efficiencies in some                                                             
                            areas  that have been already cut  back                                                             
                            and  stretched too thin.   Commissioner                                                             
                            Bishop    said    he   could    provide                                                             
                            information    about   the    wage/hour                                                             
                            department  Representative Crawford was                                                             
                            referring to.   He voiced concern about                                                           
                            the consequences of making severe cuts.                                                           
                            ADJOURNMENT                                                                                       
                                                                                                                                
                            The meeting was adjourned at 2:46 PM.                                                             
                                                                                                                                
                                                                                                                                

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