Legislature(2009 - 2010)HOUSE FINANCE 519

02/03/2009 01:30 PM FINANCE


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01:33:27 PM Start
01:33:36 PM HB81 || HB83
04:03:25 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 81 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 83 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ Budget Overviews: TELECONFERENCED
Dept. of Education and Early Development
University
Labor & Workforce Development -
workforce development
Commerce, Community and Economic
Development
<Above Item Rescheduled to 02/04/09>
Labor and Workforce Development -
regulatory
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      February 3, 2009                                                                                          
                         1:33 p.m.                                                                                              
                                                                                                                                
1:33:27 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Hawker  called the  House Finance Committee  meeting                                                                   
to order at 1:33 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Co-Chair                                                                                            
Representative Bill Thomas Jr., Vice-Chair                                                                                      
Representative Allan Austerman                                                                                                  
Representative Harry Crawford                                                                                                   
Representative Anna Fairclough                                                                                                  
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Woodie Salmon                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Larry Ledoux Commissioner, Department  of Education and Early                                                                   
Development;   Eddy   Jeans,  Director,   Education   Support                                                                   
Services,  Department  of Education  and  Early  Development;                                                                   
Mark Hamilton,  President, University of Alaska;  Pete Kelly,                                                                   
Director,  State  Relations,   University  of  Alaska;  Clark                                                                   
Bishop,  Commissioner,  Department  of  Labor  and  Workforce                                                                   
Development; David Stone, Deputy  Commissioner, Department of                                                                   
Labor  and   Workforce  Development;  Guy   Bell,  Assistance                                                                   
Commissioner and Director, Division of Administration                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 81     "An Act making appropriations for the operating                                                                       
          and loan program expenses of state government, for                                                                    
          certain programs,  and to capitalize  funds; making                                                                   
          supplemental     appropriations;     and     making                                                                   
          appropriations   under   art.   IX,   sec.   17(c),                                                                   
          Constitution of the  State of Alaska; and providing                                                                   
          for an effective date."                                                                                               
                                                                                                                                
          HB 81 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 83     "An Act making appropriations for the operating                                                                       
          and capital expenses of the state's integrated                                                                        
          comprehensive mental health program; and providing                                                                    
          for an effective date."                                                                                               
                                                                                                                                
          HB 83 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
1:33:36 PM                                                                                                                    
                                                                                                                                
DEPARTMENT  OF  EDUCATION  AND  EARLY  DEVELOPMENT  -  BUDGET                                                                   
OVERVIEW                                                                                                                        
                                                                                                                                
1:34:43 PM                                                                                                                    
                                                                                                                                
LARRY LEDOUX COMMISSIONER, DEPARTMENT  OF EDUCATION AND EARLY                                                                   
DEVELOPMENT presented his staff.                                                                                                
                                                                                                                                
1:37:32 PM                                                                                                                    
                                                                                                                                
Commissioner  Ledoux provided an  overview of the  Department                                                                   
of Education.  He indicated he had been  reviewing department                                                                   
operations  with   the  purpose   of  focusing   them  toward                                                                   
increased student  achievement. The commissioner  believed it                                                                   
was  important   to  realign   the  Deputy  Commissioner   of                                                                   
Education    and   Early   Development    to   take    direct                                                                   
responsibility  for school  improvement. Commissioner  Ledoux                                                                   
indicated that  a coherent organized  model was  necessary to                                                                   
work  with school  districts.  The department  was moving  to                                                                   
accept  responsibility  for  monitoring  and  complying  with                                                                   
federal  programs  and provide  resources  for  collaborative                                                                   
school improvement.                                                                                                             
                                                                                                                                
1:39:35 PM                                                                                                                    
                                                                                                                                
Commissioner  Ledoux   reported  that  at  a   recent  Alaska                                                                   
education  summit  many  education   experts  and  interested                                                                   
individuals throughout  the state worked together  to discuss                                                                   
the  challenges  of  school  improvement.   The  commissioner                                                                   
referred to the  state education plan, Alaska  Education Plan                                                                   
(Draft)  January 23,  2009  (copy on  file).  The draft  plan                                                                   
outlines visions,  goals, missions  and graduation  outcomes.                                                                   
Commissioner   Ledoux   believed   that  with   the   current                                                                   
resources,   targeting   within  a   continuum,   substantial                                                                   
progress  can be  made. He  reported  serious challenges  but                                                                   
indicated that one  of the most serious was  the unacceptable                                                                   
62  percent graduation  rate.  Currently graduation  outcomes                                                                   
are determined  by a high stakes  exam, but he  stressed that                                                                   
the  expectations  need  to  be   greater  for  the  student.                                                                   
Commissioner  Ledoux declared  that  graduation problems  can                                                                   
not be solved  in a short  amount of time, but  improving the                                                                   
graduation rates  will involve partnerships,  collaborations,                                                                   
dialogues  and   the  focused   use  of  limited   resources.                                                                   
Commissioner  Ledoux stressed  the balance necessary  between                                                                   
intervention  and prevention  and in  reactive and  proactive                                                                   
strategies. He cautioned that  at risk students in the system                                                                   
now need immediate  action to support their  needs. Proactive                                                                   
measures instituted  now for young  people just  entering the                                                                   
school system could help avoid reactive measures later.                                                                         
                                                                                                                                
1:43:31 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas asked  about the  higher graduation  rates                                                                   
from  Mt. Edgecombe  High School  (Sitka) and  a few  private                                                                   
schools  in Anchorage.  Commissioner Ledoux  agreed that  the                                                                   
Mt.  Edgecombe  graduation  rate  is higher  than  the  state                                                                   
average but  would prefer  to provide  statistical data  at a                                                                   
later date.                                                                                                                     
                                                                                                                                
1:44:15 PM                                                                                                                    
                                                                                                                                
Commissioner  Ledoux  revealed  the second  priority  of  the                                                                   
department  is  to raise  standards  to meet  the  work-force                                                                   
training needs  and the university.  The goal is to  have the                                                                   
student  body  work-tech  and   college  ready.  Commissioner                                                                   
Ledoux  continued  with  the   third  priority  issue,  early                                                                   
learning. He reported that many  students entering the school                                                                   
system are behind when they enter  and often remain there for                                                                   
many years. The  forth priority would be to  ensure that high                                                                   
school  students  have  access  to high  quality  career  and                                                                   
technical education programs.                                                                                                   
                                                                                                                                
1:46:06 PM                                                                                                                    
                                                                                                                                
Representative  Gara  remarked  that the  governor  vetoed  a                                                                   
large grant from  an organization that provides  school books                                                                   
to parents and  wondered if the funding should be  put in the                                                                   
budget again this year.                                                                                                         
                                                                                                                                
1:46:54 PM                                                                                                                    
                                                                                                                                
Commissioner  Ledoux referred  to  the Dolly  Parton  Library                                                                   
project.  He indicated  there  are many  worthy programs  but                                                                   
considered it  inappropriate to speak  on any one of  them at                                                                   
this time. Representative Gara  interjected he just needed to                                                                   
know if  the department  thought requesting  funds was  worth                                                                   
working for again.                                                                                                              
                                                                                                                                
1:48:02 PM                                                                                                                    
                                                                                                                                
Representative Austerman questioned  if legislators needed to                                                                   
pay attention  to any  one particular thing  to stop  the low                                                                   
graduation rate.                                                                                                                
                                                                                                                                
Commissioner   Ledoux   commented   that  the   high   school                                                                   
graduation  exam did  not contribute  to  the low  graduation                                                                   
rate; the issue  was more complex. The  commissioner remarked                                                                   
that the exam was  passed into law by the legislature  and he                                                                   
would  be  willing to  give  his  opinion  at a  later  date.                                                                   
Commissioner Ledoux  reported that the exams  had forced some                                                                   
districts with  limited funds to pull resources  from courses                                                                   
that allow students  to explore their interests.  He believed                                                                   
this affects the  graduation rate because when  students lose                                                                   
the ability  to explore  their curiosities,  they often  lose                                                                   
interest in school.                                                                                                             
                                                                                                                                
1:50:05 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker remarked  that  the commissioner  seemed  to                                                                   
have  problems   with  basic   reading,  writing,   and  math                                                                   
requirements.  Commissioner Ledoux  agreed that these  skills                                                                   
are important  but directed his  comments to the  problems of                                                                   
high stake exams.                                                                                                               
                                                                                                                                
1:51:31 PM                                                                                                                    
                                                                                                                                
Representative  Austerman   questioned  some  of   the  basic                                                                   
education subjects providing skills  for college. He believed                                                                   
schools were also failing in teaching  general living skills.                                                                   
                                                                                                                                
1:53:03 PM                                                                                                                    
                                                                                                                                
Representative  Gara thought the  purpose of the  high school                                                                   
qualifying exams  was to make  sure students were  graduating                                                                   
knowing  basic skills  but he  felt the problem  seems  to be                                                                   
that students  are still graduating today without  the skills                                                                   
to enter  college. He  asked for  information that  would let                                                                   
the legislature  know  if the qualifying  exam was  achieving                                                                   
its goal. Commissioner Ledoux  expressed he would be happy to                                                                   
come before the committee to talk  about the pros and cons of                                                                   
the exams.  He noted  that educators  in Alaska  are on  both                                                                   
sides of the issue. He elaborated  that the standards for the                                                                   
test  are low  level  and not  up to  the  skills needed  for                                                                   
college. Commissioner Ledoux believed  it was time to look at                                                                   
the  exam's purpose  and  how  it may  or  may not  help  the                                                                   
students.                                                                                                                       
                                                                                                                                
1:54:35 PM                                                                                                                    
                                                                                                                                
Representative  Fairclough  wondered   if  the  goal  of  the                                                                   
legislature   to  have  every   child  attend  college.   She                                                                   
questioned if this was the correct measurement tool.                                                                            
                                                                                                                                
1:55:12 PM                                                                                                                    
                                                                                                                                
Commissioner  Ledoux believed  that  all  students should  be                                                                   
prepared  to  engage  in  the  career  of  their  choice.  He                                                                   
indicated  that the basic  skills for  success are  identical                                                                   
for both college and vocational  success. Commissioner Ledoux                                                                   
considered  the  partnership  with the  Department  of  Labor                                                                   
allowed the education  department to take advantage  of their                                                                   
leadership but  not to be moved  out of the  K-12 educational                                                                   
program.  The   commissioner  believed  high   standards  and                                                                   
expectations  should be  the goal for  achievement among  the                                                                   
students.                                                                                                                       
                                                                                                                                
1:56:08 PM                                                                                                                    
                                                                                                                                
Commissioner Ledoux commented  on the fifth priority, teacher                                                                   
quality.  He signified  the  importance  of having  qualified                                                                   
teachers  provide  the  necessary  instruction.  Commissioner                                                                   
Ledoux  recognized that  it was impossible  to achieve  these                                                                   
goals alone, but depended on a  number of other organizations                                                                   
for success.  He reiterated  that one  of the most  important                                                                   
partnerships  was  the  leadership  from  the  Department  of                                                                   
Labor. Commissioner Ledoux reported  that high schools across                                                                   
the nation have closed their vocational  programs due to lack                                                                   
of funding  and resources  and that  Alaska has closed  shops                                                                   
and not replaced needed training equipment.                                                                                     
                                                                                                                                
1:58:40 PM                                                                                                                    
                                                                                                                                
Commissioner Ledoux expressed  the importance of working with                                                                   
and  aligning  goals with  the  university to  help  students                                                                   
entering college.  He indicated  the necessity of  having the                                                                   
university   help    prepare   teachers,    principals,   and                                                                   
specialists needed in Alaska and  the importance of utilizing                                                                   
the university's  research capability to collect  and collate                                                                   
information   to  integrate  it   into  useful   information.                                                                   
Commissioner Ledoux  expressed the need to open  new pathways                                                                   
of  communication  to  the indigenous  communities  to  align                                                                   
common goals.                                                                                                                   
                                                                                                                                
2:00:14 PM                                                                                                                    
                                                                                                                                
Representative   Fairclough    expressed   how    the   three                                                                   
departments  before  the  committee  were  interrelated.  She                                                                   
asked who tallies  the General Equivalency Diplomas  (GED) in                                                                   
Alaska. Commissioner  Ledoux responded  that he did  not have                                                                   
that  information  but would  provide  it  at a  later  date.                                                                   
Representative   Fairclough  indicated   that  there   is  no                                                                   
statistical data available to  look at a cross-section of the                                                                   
issue.                                                                                                                          
                                                                                                                                
2:02:06 PM                                                                                                                    
                                                                                                                                
Representative   Joule  commented   that  the  regional   hub                                                                   
districts and  larger communities  have a similar  quality of                                                                   
education but  questioned the  quality of education  in rural                                                                   
schools.  He expressed  his concern  that  students in  rural                                                                   
communities are being shortchanged.                                                                                             
                                                                                                                                
2:03:55 PM                                                                                                                    
                                                                                                                                
Commissioner  Ledoux observed  that he  has been  responsible                                                                   
for  developing  and  supervising   rural  programs  but  the                                                                   
challenges  in finding  qualified staff  was significant.  He                                                                   
reported  that high  school  students need  to  have a  broad                                                                   
range   of  experiences,   opportunity   to  discover   their                                                                   
interests, access  to highly  qualified teachers  and support                                                                   
in developing  a personal vision  in order to  be successful.                                                                   
The  commissioner   suggested  there  are   possibilities  of                                                                   
addressing   the   remoteness   of  rural   schools   through                                                                   
technology,  but  acknowledged   the  difficultly  for  rural                                                                   
students  to   make  the  connections  important   for  their                                                                   
success. Commissioner  Ledoux expressed his goal  for parents                                                                   
in Alaska  communities to  have good choices  so a  choice is                                                                   
not forced upon them.                                                                                                           
                                                                                                                                
2:05:59 PM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas asked the commissioner  if it would work to                                                                   
amend the count  to two counts, one at the start  of the year                                                                   
and one  near the  end of  the year,  to curtail the  dropout                                                                   
rate.  Commissioner  Ledoux  believed there  were  two  count                                                                   
periods in the  past. He considered that  foundation programs                                                                   
have to  be flexible enough  to fund alternative  educational                                                                   
programs.   The   commissioner   added  that   many   options                                                                   
pertaining to size  only work in large school  districts; the                                                                   
small school districts are not set up for it.                                                                                   
                                                                                                                                
2:07:32 PM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas  commented that most of the  contractors in                                                                   
Haines went  through vocational  education training,  but the                                                                   
funding  had been  cut  so he  considered  funding for  these                                                                   
programs should be looked at again.                                                                                             
                                                                                                                                
2:08:06 PM                                                                                                                    
                                                                                                                                
Representative Gara questioned  the university and vocational                                                                   
education  preparedness and  attendance. He  referred to  the                                                                   
statistic  that  5.8  percent   of  children  are  graduating                                                                   
college  within 6  years of  graduating from  high school,  a                                                                   
third  the  national average.  Commissioner  Ledoux  answered                                                                   
that  those  statistics  were  mentioned  in  a  subcommittee                                                                   
meeting although  he did not  make them. Representative  Gara                                                                   
asked if the commissioner had  statistics on how Alaska ranks                                                                   
in sending students to college.  Commissioner Ledoux reported                                                                   
he   would   need   time   to    research   the   statistics.                                                                   
Representative Gara  stressed that having information  on how                                                                   
comprehensive  vocational opportunities  were handled  by the                                                                   
many divisions in the state would be helpful.                                                                                   
                                                                                                                                
2:10:39 PM                                                                                                                    
                                                                                                                                
Commissioner Ledoux  replied that the department  was working                                                                   
with the University of Alaska  and the Department of Labor to                                                                   
find these answers.  Representative Gara asked  if the reason                                                                   
some   Alaskan  students   are  not   attending  college   is                                                                   
financial.  Commissioner  Ledoux  agreed  that  costs  are  a                                                                   
problem.  He added  that many  in Alaska  are from  immigrant                                                                   
backgrounds and parents  may not know how to  work the system                                                                   
or have the ability to advocate for their children.                                                                             
                                                                                                                                
2:12:55 PM                                                                                                                    
                                                                                                                                
Commissioner Ledoux reviewed the  department's 10-year budget                                                                   
projection,  Department of Education  & Early  Development-10                                                                   
Year Fiscal  Plan Assumptions  (copy on  file). He  mentioned                                                                   
that  variables used  in making  projections  were simple  to                                                                   
follow so that  adjustments could easily be  made (page 1-2).                                                                   
Commissioner  Ledoux described  some of  the new  initiatives                                                                   
appropriation   estimates   (page   3-4).   Co-Chair   Hawker                                                                   
interjected that it would be preferable  for the commissioner                                                                   
to just  concentrate on  the overview for  the next  10 years                                                                   
instead  of specifics.  Commissioner Ledoux  pointed out  the                                                                   
graphs  for  the  10 year  plan  showing  the  baseline,  the                                                                   
current  budget, and  the baseline  plus current  initiatives                                                                   
being flat for the next 10 years  (page 5). He concluded that                                                                   
all the new initiatives added to $4 million.                                                                                    
                                                                                                                                
2:18:02 PM                                                                                                                    
                                                                                                                                
EDDY JEANS, DIRECTOR, EDUCATION  SUPPORT SERVICES, DEPARTMENT                                                                   
OF  EDUCATION  AND  EARLY  DEVELOPMENT   expressed  that  the                                                                   
increases seen in  the 10-year plan were a  reflection of the                                                                   
increases passed  last year by the legislature  in HB273; the                                                                   
increases  continue for  the next  4 years  past the FY  2010                                                                   
budget. He  proclaimed flat funding  exists due to  little or                                                                   
no growth. Mr. Jeans declared  that state funding is affected                                                                   
by other  things such as  required local contributions  which                                                                   
have  been  rising.  Co-Chair   Hawker  repeated  Mr.  Jean's                                                                   
comments for clarification.                                                                                                     
                                                                                                                                
2:19:56 PM                                                                                                                    
                                                                                                                                
Representative Gara  asked how the department  plans to raise                                                                   
graduation  numbers  and  improve schools  with  no  increase                                                                   
requests in  the budget. Commissioner Ledoux  recognized that                                                                   
there would  be budget stress  if the budget was  flat lined,                                                                   
but the  department could not  predict the inflation  rate or                                                                   
economics  in future  years. Co-Chair  Hawker impressed  upon                                                                   
the commissioner  that the  legislature requires  information                                                                   
on  what   is  needed  in   the  budget  to   accomplish  the                                                                   
department's objectives. Co-Chair  Hawker questioned if money                                                                   
should define  the school's mission or mission  define money.                                                                   
He asked if  the department was understating  their financial                                                                   
needs.                                                                                                                          
                                                                                                                                
2:22:18 PM                                                                                                                    
                                                                                                                                
Representative  Fairclough  remarked  that there  were  union                                                                   
contracts with  incremental increases  not reflected  in this                                                                   
budget.                                                                                                                         
                                                                                                                                
Vice-Chair Thomas requested information  on the drop-out rate                                                                   
during the  past flat funding  period to  see if the  lack of                                                                   
money influenced the drop-out rate.                                                                                             
                                                                                                                                
Representative   Gara   questioned    where   Alaska   ranked                                                                   
nationally.  Commissioner Ledoux  indicated he would  provide                                                                   
the information later to the committee.                                                                                         
                                                                                                                                
2:24:08 PM                                                                                                                    
                                                                                                                                
UNIVERSITY OF ALASKA- OVERVIEW                                                                                                  
                                                                                                                                
MARK    HAMILTON,    PRESIDENT,    UNIVERSITY    OF    ALASKA                                                                   
expressed his long  term interest in the State  of Alaska and                                                                   
the  University  of  Alaska  (UA).  He  emphasized  that  the                                                                   
University  of Alaska  is the overwhelming  provider  of jobs                                                                   
for Alaskans.  He declared the  uniqueness of  the university                                                                   
in  that  it  embraces  the  community   college  system.  He                                                                   
announced that 77  percent of jobs in America  do not require                                                                   
a 4-year degree but added that  the majority of these jobs do                                                                   
require  post secondary  education.  Mr. Hamilton  emphasized                                                                   
that higher  skills in the  basics of education  are required                                                                   
for vocational jobs today.                                                                                                      
                                                                                                                                
2:28:33 PM                                                                                                                    
                                                                                                                                
President Hamilton  continued with information  about special                                                                   
programs  at UA  that  continue  higher education  for  those                                                                   
entering vocational studies. He  reiterated the importance of                                                                   
the university being a large workforce  provider because $1.4                                                                   
billion   leaves  the   state  every   year  in  payroll   to                                                                   
nonresidents.   President  Hamilton   expressed  that   these                                                                   
special workforce  development  programs were costly  because                                                                   
good  instructors are  expensive  and class  sizes small.  He                                                                   
added that modern equipment also adds a cost burden.                                                                            
                                                                                                                                
2:31:42 PM                                                                                                                    
                                                                                                                                
President Hamilton  named K-12  outreach as the  university's                                                                   
number one  priority. He believed  being able to  provide and                                                                   
assist  Alaska   graduates  with  the  required   skills  for                                                                   
vocational as well as college  educations. President Hamilton                                                                   
signified  the importance  of the  university mentor  program                                                                   
where college students work with  students in high school. He                                                                   
believed  that   the  legislature's  decision   to  fund  the                                                                   
university when he first came  before them in 1999 helped the                                                                   
university  move  forward with  positive  results.  President                                                                   
Hamilton  proclaimed   that  the  number  of   college  bound                                                                   
Alaskans moved  from 42 percent  to 63 percent, a  50 percent                                                                   
increase but still coming in last  in the nation. He remarked                                                                   
that Alaska Native graduations  have increased by 108 percent                                                                   
but less than 500 graduate per year.                                                                                            
                                                                                                                                
2:34:51 PM                                                                                                                    
                                                                                                                                
President  Hamilton provided  an overview  of the  university                                                                   
10-year plan. He noted that demographics  indicate fewer high                                                                   
school  graduates in  the  future with  only  48 percent  who                                                                   
choose  to go to  college. President  Hamilton remarked  that                                                                   
funding has  not kept  up with inflation.  He noted  that the                                                                   
university   has  made   enormous   progress  in   university                                                                   
receipts, up  90 percent  in the last  ten years  by doubling                                                                   
tuition and indirect  cost recovery. He added  the university                                                                   
took $30 million  from the Natural Resource  Fund and applied                                                                   
it  to the  merit  based  scholarship, the  Alaska  Scholars.                                                                   
President Hamilton  listed prior  money received from  BP and                                                                   
Conoco Philips which is now ended.  He added funding received                                                                   
in  the  past   included  $10  million  from   the  Rasmussen                                                                   
Foundation,  $10  million  from  the  Denali  Commission,  $7                                                                   
million from Mental  Health Trust, and $7 million  from other                                                                   
various industries.  He added it is highly  unlikely that the                                                                   
university could repeat these statistics in the future.                                                                         
                                                                                                                                
2:37:38 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  mentioned   the  statistics  of  those                                                                   
graduating  and going  on  to college  or  trade schools.  He                                                                   
asked for the  training and apprenticeship statistics  on all                                                                   
on the graduating categories.  President Hamilton said it was                                                                   
available. Representative Kelly  also requested a look at the                                                                   
non-union statistics.                                                                                                           
                                                                                                                                
2:38:40 PM                                                                                                                    
                                                                                                                                
Representative  Gara   agreed  that  the  university   is  an                                                                   
economic  factor in  this state.  He  asked what  legislators                                                                   
could  do  to  help  more  high  school  students  enter  the                                                                   
university.  President  Hamilton answered  that  scholarships                                                                   
would be a great  help to those that can not  afford college.                                                                   
He added coordinating  help between the Department  of Labor,                                                                   
the  K12   system  and  the   university.  He   stressed  the                                                                   
importance of  not duplicating what is being  done elsewhere.                                                                   
Representative  Gara reiterated  that $7  million would  help                                                                   
fund the student  financial aid. He mentioned  that last year                                                                   
the governor  proposed and the  legislature put  $2.2 million                                                                   
in low-income grant funding that  is not in budget this year.                                                                   
Representative  Gara wondered  if  this  would be  beneficial                                                                   
again. President Hamilton agreed  it would be very beneficial                                                                   
for the short run. He mentioned  events that had been held to                                                                   
help  students apply  for financial  aid. He  added that  the                                                                   
online application process had proved fruitful.                                                                                 
                                                                                                                                
2:43:29 PM                                                                                                                    
                                                                                                                                
Representative Fairclough  stated that she had  been asked by                                                                   
students for support in scholarship  programs. She felt there                                                                   
was a large  disconnect in the student's  understanding where                                                                   
the  state of  Alaska  received the  majority  of its  money.                                                                   
Representative  Fairclough stressed  that  the production  of                                                                   
oil provides revenue for the state  of Alaska that is in turn                                                                   
invested  in the  university system.  She  declared that  the                                                                   
university  staff and  students often  do not support  mining                                                                   
and oil projects  and wondered how she could  advocate giving                                                                   
money for people  who were against development  projects that                                                                   
provide money  to Alaska. President Hamilton  thought perhaps                                                                   
those students  would change their  opinions as  they matured                                                                   
over time.  He felt  they would  grow up  and understand  the                                                                   
definition   of   responsible   development.   Representative                                                                   
Fairclough  stressed   that  the  questions  she   had  asked                                                                   
students and staff had been specific.  She felt there existed                                                                   
a  voting  block inside  the  university  that seemed  to  be                                                                   
disconnected to  the way money  was generated in  Alaska. She                                                                   
wondered  how  funding  could  be  increased  and  the  money                                                                   
appreciated  if  the  university  and its  students  did  not                                                                   
recognize the way the money was made.                                                                                           
                                                                                                                                
2:49:51 PM                                                                                                                    
                                                                                                                                
President Hamilton  answered that  it was good  that students                                                                   
held  their own  beliefs. He  felt  that these  disagreements                                                                   
were  part  of the  learning  process  for the  students.  He                                                                   
elaborated that  the budget was  put together by him  and the                                                                   
board of  regents, not the  student body. President  Hamilton                                                                   
wanted  the  university  to  provide   sufficiently  for  its                                                                   
students. Representative Fairclough  said she did not want to                                                                   
dampen  the  student's   enthusiasm  or  try   to  sway  them                                                                   
politically; she  simply wanted the  students to be  aware of                                                                   
how the state is really funded.  She suggested that maybe the                                                                   
students could seek new ways of funding.                                                                                        
                                                                                                                                
2:52:59 PM                                                                                                                    
                                                                                                                                
President   Hamilton   remarked   that  during   the   recent                                                                   
Conference  of  Young  Alaskans,  funded by  the  BP,  Conoco                                                                   
Phillips compact  money, he stipulated  that there must  be a                                                                   
one hour class on the economics of the state of Alaska.                                                                         
                                                                                                                                
Representative  Austerman  remembered  a  past  plan  for  10                                                                   
percent of  graduating high school  students to  receive free                                                                   
tuition and  wondered if  there had been  a backlash  for the                                                                   
other 90 percent who may have  felt they were not worth going                                                                   
to college.  Representative Austerman felt the  K-12 outreach                                                                   
system was failing its students.  He wondered if any work had                                                                   
been done on the K-14 program.                                                                                                  
                                                                                                                                
President Hamilton  disagreed that  the scholars  program had                                                                   
been a disincentive  to some. He felt it was not  a matter of                                                                   
disrespecting the  students who  did not receive  funding. He                                                                   
remarked  that  discussions  of   a  K-14  program  had  been                                                                   
ongoing. President  Hamilton believed  in the  idea of  a job                                                                   
resting on a set of academic criteria  could be a pathway for                                                                   
students to identify opportunities  for future employment. He                                                                   
expressed that  to form a  statewide organization  to discuss                                                                   
the issue would  be up to the state. He felt  the primary key                                                                   
for  any such  idea was  collaboration  working together  for                                                                   
common goals.                                                                                                                   
                                                                                                                                
3:00:09 PM                                                                                                                    
                                                                                                                                
Representative  Austerman   agreed  that  collaboration   was                                                                   
necessary throughout  the departments,  but he felt  that the                                                                   
present  system has  failed and  wondered why  there had  not                                                                   
been collaboration  in the past. Co-Chair Hawker  reported he                                                                   
was also troubled by the issues  brought up by Representative                                                                   
Austerman. He was  looking for true advances  for guidance on                                                                   
these subjects.                                                                                                                 
                                                                                                                                
Representative    Gara    disagreed    with    Representative                                                                   
Fairclough's view  that a student's  opinion has  any bearing                                                                   
on whether  or not the university  should be funded;  he felt                                                                   
it  was  wrong  to  withhold  funding  for  students  at  the                                                                   
university because of their political  views. He believed the                                                                   
university should  have a  list of goals  that would  lead to                                                                   
job creation  or job  training. Representative Gara  wondered                                                                   
if President Hamilton  had any ideas the university  would be                                                                   
actively pursuing over the next 30-60 days.                                                                                     
                                                                                                                                
3:03:19 PM                                                                                                                    
                                                                                                                                
President  Hamilton replied  that the  university has  looked                                                                   
into some ideas for the stimulus  package. He mentioned there                                                                   
should  be  increased  needs-based   scholarships.  He  named                                                                   
deferred maintenance  as the university's number  one capital                                                                   
request. President  Hamilton added that professionals  needed                                                                   
to train in the workforce development  program are expensive.                                                                   
He declared  there is a massive  demand for new  projects and                                                                   
programs in  job training.  President Hamilton stressed  that                                                                   
during these difficult times it  is important not to cut back                                                                   
on education.  President Hamilton believed the  university is                                                                   
part  of  the solution  to  produce  a  qualified  employable                                                                   
workforce for Alaska.                                                                                                           
                                                                                                                                
3:07:07 PM                                                                                                                    
                                                                                                                                
Representative   Gara   noted   that   money   for   deferred                                                                   
maintenance  in the stimulus  package  would provide  work in                                                                   
the short run but questioned if  any ideas had been discussed                                                                   
on how  to use  this money to  create more  jobs in  the long                                                                   
run. President Hamilton  noted there could be a  long list of                                                                   
money needs  but it  was decided to  stick with the  deferred                                                                   
maintenance requests.  He added  that the beauty  of deferred                                                                   
maintenance is it has already been identified and planned.                                                                      
                                                                                                                                
3:09:13 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  agreed that deferred maintenance  is a great                                                                   
choice for the planning future.                                                                                                 
                                                                                                                                
3:09:48 PM                                                                                                                    
                                                                                                                                
Representative Joule  declared that a primary  goal should be                                                                   
to  force good  quality back  into the  education system.  He                                                                   
believed in the need to look at  meaningful reform throughout                                                                   
the state. Representative Joule  emphasized that this lack is                                                                   
acutely  felt   in  the   rural  areas   and  he  hoped   the                                                                   
subcommittee  chairs would really  look at meaningful  reform                                                                   
to help lift up the people of Alaska.                                                                                           
                                                                                                                                
3:12:55 PM                                                                                                                    
                                                                                                                                
President Hamilton  recalled a meeting in Kotzebue  called by                                                                   
Representative Joule  regarding jobs at  the Red Dog  mine to                                                                   
serve  as an inspiration  to the  young people  in the  rural                                                                   
areas. Representative  Joule remarked  that a result  of that                                                                   
meeting was a  proposal for a magnet school  to isolate areas                                                                   
of  growth  in employment.  He  added  that Nome  and  Bering                                                                   
Strait were also exploring new ideas.                                                                                           
                                                                                                                                
3:16:02 PM                                                                                                                    
                                                                                                                                
Representative  Crawford shared  the  frustration of  talking                                                                   
about change without seeing a  lot of progress. He added that                                                                   
in the  end the discussion always  returns to money,  not the                                                                   
desire to make  education more exciting or accessible  to the                                                                   
people of Alaska.  Co-Chair Hawker added that  the problem is                                                                   
not just wanting to spend the  money, but having the money to                                                                   
spend.                                                                                                                          
                                                                                                                                
3:19:27 PM                                                                                                                    
                                                                                                                                
LABOR AND WORKFORCE DEVELOPMENT - WORKFORCE DEVELOPMENT                                                                         
                                                                                                                                
CLICK   BISHOP,  COMMISSIONER,   DEPARTMENT   OF  LABOR   AND                                                                   
WORKFORCE   DEVELOPMENT  presented   the   overview  of   the                                                                   
Department  of Labor  and Workforce  Development.  He read  a                                                                   
letter from him to President Hamilton (copy on file).                                                                           
                                                                                                                                
     The AGIA Training Plan calls for alignment of                                                                              
     Alaska's vocational and technical education system in                                                                      
     the best interest of the citizens of our state. I'm                                                                        
     seeking your support to develop a strategy for the                                                                         
     postsecondary systems for career and technical                                                                             
     education in the state, to assure they are aligned to                                                                      
     train and educate our citizens without needless                                                                            
     duplication of programs and investments.                                                                                   
                                                                                                                                
     I have directed my staff to work closely with                                                                              
     representatives from the University of Alaska and                                                                          
     prepare recommendations to address the AGIA strategy of                                                                    
     CTE alignment in our state. Over the coming months I                                                                       
     anticipate conversations to take place that will help                                                                      
     us plan and shape Alaska's workforce development                                                                           
     future. It is my intention to have recommendations from                                                                    
     this working group, led by Fred Villa and David Stone,                                                                     
     in May, 2009.                                                                                                              
                                                                                                                                
     I hope you will join me in this endeavor to make  sure                                                                     
     that we position the state of Alaska to place the right                                                                    
     programs in the right places to assist Alaskans  in                                                                        
     getting quality jobs in Alaska, maximizing Alaska                                                                          
     resident hire overall and reducing the wages that are                                                                      
     leaving the state.                                                                                                         
                                                                                                                                
3:22:21 PM                                                                                                                    
                                                                                                                                
Commissioner  Bishop  referred  to the  committee's  previous                                                                   
questions on  the alignment of  resources. He  believed there                                                                   
had been success in working with  the education department as                                                                   
a team.  He  expressed his  interest in  increasing the  high                                                                   
school graduation rate. He indicated  an earlier meeting with                                                                   
the  Commissioner of  Education  on the  WorkKeys  assessment                                                                   
system and the Career Readiness Certificate.                                                                                    
                                                                                                                                
3:25:46 PM                                                                                                                    
                                                                                                                                
Representative Austerman  asked what the  WorkKeys assessment                                                                   
and  Career   Ready  certificate  was.  Commissioner   Bishop                                                                   
indicated  he would  acquaint  Representative Austerman  with                                                                   
these  programs  during  their  scheduled  meeting.  Co-Chair                                                                   
Hawker  requested Commissioner  Bishop  present his  personal                                                                   
experiences regarding the department.                                                                                           
                                                                                                                                
3:26:50 PM                                                                                                                    
                                                                                                                                
Commissioner  Bishop  considered  one  of  the  most  serious                                                                   
problems was $1.7  billion leaving the state  in non-resident                                                                   
wages. He  believed the goal should  be to try and  capture a                                                                   
higher  percentage of  this money  for  resident workers.  He                                                                   
stressed  that holding  onto this money  could possibly  grow                                                                   
Alaska's economy during the recession.  Co-Chair Hawker asked                                                                   
what  job sectors  should be  looked  at first.  Commissioner                                                                   
Bishop responded  that the three job sectors  targeted by the                                                                   
department  were mining,  oil and gas,  and construction.  He                                                                   
noted that the non-resident hire  rate went down and resident                                                                   
hire  increased,  still $374  million  was exported  to  non-                                                                   
resident hires.                                                                                                                 
                                                                                                                                
3:30:24 PM                                                                                                                    
                                                                                                                                
DAVID  STONE, DEPUTY  COMMISSIONER, DEPARTMENT  OF LABOR  AND                                                                   
WORKFORCE  DEVELOPMENT  revealed   there  was  a  large  non-                                                                   
resident force working in the  mining industry because of the                                                                   
lack  of  skilled  Alaskan  workers.  He  reported  that  the                                                                   
department was working with UA  to develop mining programs to                                                                   
expand into longer more skilled  programs. He added they were                                                                   
working  on  a  new  core  drilling   training  program  that                                                                   
involved   both   classroom  and   on-the-job   training   to                                                                   
eventually graduate top hands.  Mr. Stone expressed a goal of                                                                   
taking an underground  miner, over a 4-year  period, from the                                                                   
entry level to  the journeyman level, giving  them the skills                                                                   
to work in any mine in Alaska.                                                                                                  
                                                                                                                                
3:32:21 PM                                                                                                                    
                                                                                                                                
Mr. Stone  pointed out that there  was a lot of  support from                                                                   
the  mining  industry.  Commissioner  Bishop  interjected  it                                                                   
takes a long time to meet with  business and industry to show                                                                   
them the benefit  and values of resident hires.  He announced                                                                   
a  one-of-a-kind  agreement  for  a  data  sharing  with  the                                                                   
federal Department of Labor. He  emphasized that from 1996 to                                                                   
the   present   90   percent    of   students   enrolled   in                                                                   
apprenticeship programs  have stayed and remained  working in                                                                   
Alaska.                                                                                                                         
                                                                                                                                
3:35:39 PM                                                                                                                    
                                                                                                                                
Representative  Salmon questioned  how the  development  of a                                                                   
statewide   workforce   was  reaching   into   rural   areas.                                                                   
Commissioner  Bishop admitted movement  into rural  areas had                                                                   
been slow,  but he has had  a dialogue with the  local school                                                                   
districts to increase youth career guidance.                                                                                    
                                                                                                                                
3:38:08 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  if  the Department  of Labor  had                                                                   
thought   about   construction   projects   that   could   be                                                                   
incorporated into the federal  stimulus package. Commissioner                                                                   
Bishop  replied  that the  department  had not  factored  any                                                                   
stimulus money into the present  budget before the committee.                                                                   
                                                                                                                                
GUY BELL, ASSISTANCE  COMMISSIONER AND DIRECTOR,  DIVISION OF                                                                   
ADMINISTRATION added  that the primary focus had  been on the                                                                   
workforce training  and unemployment insurance  components of                                                                   
the stimulus package. There is  anticipated federal money for                                                                   
workforce  training  and  unemployment  insurance  with  some                                                                   
anticipated job creation in transportation,  but as yet there                                                                   
are no  firm announcements from  the federal government  what                                                                   
they will be.                                                                                                                   
                                                                                                                                
3:40:38 PM                                                                                                                    
                                                                                                                                
Representative Gara questioned  the construction level of the                                                                   
Fairbanks  gas  line  job  training   facility.  Commissioner                                                                   
Bishop replied  there had been a groundbreaking  ceremony and                                                                   
the   first   outdoor   exercise   was   held   in   October.                                                                   
Representative Gara asked if the  construction was completed.                                                                   
Commissioner Bishop  replied it was not completed  but it was                                                                   
operational.   Representative    Gara   questioned   if   the                                                                   
department  had looked  into the  federal  stimulus funds  to                                                                   
expand  the  dormitory  space   at  the  facility  to  better                                                                   
incorporate those  from rural areas  for the training  of gas                                                                   
line jobs.                                                                                                                      
                                                                                                                                
3:42:22 PM                                                                                                                    
                                                                                                                                
Commissioner  Bishop remarked  that  talks  had been  ongoing                                                                   
about the use  of the stimulus funds. Mr. Bell  reported that                                                                   
land  acquisitions  and  site  development to  the  area  was                                                                   
ongoing to provide  a larger facility for  more comprehensive                                                                   
training.  He  added  that the  department  envisions  a  new                                                                   
dormitory but does  not have the funding yet.  Mr. Bell hoped                                                                   
for some federal  funding, but has not yet  seen actual money                                                                   
figures offered.                                                                                                                
                                                                                                                                
3:43:40 PM                                                                                                                    
                                                                                                                                
Commissioner  Bishop spoke  of  the anticipated  addition  of                                                                   
44,000 jobs in  Alaska's workforce growth from  2006 to 2016.                                                                   
He noted that some industries  will outperform others such as                                                                   
health care,  utilities, mining,  construction, and  research                                                                   
analysis  for planning,  training and  long range  employment                                                                   
trends.  Commissioner  Bishop   related  again  his  goal  of                                                                   
capturing more  employment for Alaskans within  the state and                                                                   
not to  non-residents. He  stressed that Alaska  unemployment                                                                   
is  at 7.5  percent and  it is  important  to prevent  double                                                                   
digit numbers that have existed in the past.                                                                                    
                                                                                                                                
3:46:53 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  asked if the  department was  doing anything                                                                   
to  focus  on areas  such  as  health care  and  professional                                                                   
clerical activities. Commissioner  Bishop remarked that these                                                                   
professions  have been identified.  Co-Chair Hawker  remarked                                                                   
that  his   desire  would  be   to  see  more   comprehensive                                                                   
collaboration  between  departments in  addressing  workforce                                                                   
training to avoid duplication.                                                                                                  
                                                                                                                                
3:48:40 PM                                                                                                                    
                                                                                                                                
Commissioner  Bishop expressed  that  he  had been  traveling                                                                   
throughout  the state  looking closely  at possible  overlaps                                                                   
and duplications in job training.                                                                                               
                                                                                                                                
3:50:41 PM                                                                                                                    
                                                                                                                                
Co-Chair   Hawker  requested   a   brief   overview  of   the                                                                   
department's  goals   for  the  next  ten  years.   Mr.  Bell                                                                   
disclosed  that an inflation  assumption  had not been  built                                                                   
into the  10-year plan.  He noted  that deferred  maintenance                                                                   
for the  Alaska Vocational  Technical  Center had been  built                                                                   
into the base line  growth beyond 2010. He added  for the gas                                                                   
line related activity there were  significant investments for                                                                   
FY 2010  in both the  operating and  the capital  budget. Mr.                                                                   
Bell  expressed   that  in   FY2011  and  beyond   additional                                                                   
investments would be needed to  fully implement the strategic                                                                   
training plan associated with  Alaska Gasoline Inducement Act                                                                   
(AIGA).                                                                                                                         
                                                                                                                                
3:52:22 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker questioned  if  the AIGA  plans are  project                                                                   
specific  or adaptable  to  other  state projects.  Mr.  Bell                                                                   
responded  it was  a one-size-fits-all  training program  for                                                                   
many different  possibilities. Commissioner  Bishop indicated                                                                   
that  the  Denali Pipeline  Group  and  TC Alaska  have  been                                                                   
brought to the  table for training purposes.  Co-Chair Hawker                                                                   
asked if  they were both  resident workers. The  Commissioner                                                                   
replied that both groups were  working toward the common goal                                                                   
of training the workforce in Alaska.                                                                                            
                                                                                                                                
3:54:13 PM                                                                                                                    
                                                                                                                                
Mr.  Bell added  that  training efforts  would  step down  in                                                                   
FY2015 at  20 percent  a year as  the pipeline is  completed.                                                                   
Mr. Bell also expected additional  enforcement activity would                                                                   
be required  at the  time construction  begins for  workforce                                                                   
safety and resident hire provisions  on projects connected to                                                                   
the   gas  line   construction.   Mr.  Bell   suggested   new                                                                   
initiatives developing around  career and technical education                                                                   
in  the health  care  area and  expanding  the resident  hire                                                                   
enforcement efforts. Co-Chair  Hawker expressed his hope that                                                                   
continued  dialogue  on  a  shared   vision  for  the  future                                                                   
continues  to  grow between  the  legislative  and  executive                                                                   
branches and the people of Alaska.                                                                                              
                                                                                                                                
3:56:05 PM                                                                                                                    
                                                                                                                                
Representative  Joule  requested  information  on  ideas  for                                                                   
getting   rural  residents   involved   in  these   projected                                                                   
ventures.  Commissioner Bishop  agreed to listen to all ideas                                                                   
on  this  subject.   Representative  Salmon  referred   to  a                                                                   
situation where people working  on a village project were not                                                                   
from the  area and he  believed it was  time to  correct this                                                                   
problem.                                                                                                                        
                                                                                                                                
3:58:28 PM                                                                                                                    
                                                                                                                                
Representative Fairclough announced  to the committee members                                                                   
to please  let her  know if there  are specific questions  or                                                                   
interests  that they  would like  the  subcommittee to  probe                                                                   
further.                                                                                                                        
                                                                                                                                
Representative  Kelly asked where  health care fits  into the                                                                   
departments  list of  projects.  Commissioner Bishop  replied                                                                   
health care fits into the mix  equally with the other focused                                                                   
projects. He  considered it a high  priority as it is  one of                                                                   
the  fastest   growing   occupations.  Representative   Kelly                                                                   
welcomed  a  more  proactive  approach  to  the  department's                                                                   
responding to the health care needs throughout the state.                                                                       
                                                                                                                                
4:02:26 PM                                                                                                                    
                                                                                                                                
Commissioner  Bishop applauded  continued good  communication                                                                   
between  his  department,  the  committee  members,  and  the                                                                   
university.                                                                                                                     
                                                                                                                                
4:03:25 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker   delivered  the  gavel   to  Representative                                                                   
Fairclough  designating her  chair  for the  duration of  the                                                                   
meeting.                                                                                                                        
                                                                                                                                
Representative Joule commented  that it was refreshing to see                                                                   
the   cooperation  and   communication   between  the   three                                                                   
departments  dealing  with  education.  Representative  Kelly                                                                   
recounted  a conversation  with  President  Hamilton about  a                                                                   
perceived  anti-university bias  within  the legislature.  He                                                                   
remarked  that training  is necessary  to teach students  the                                                                   
proper way  to request  funds from  the legislature  and that                                                                   
being   staunchly  anti-development   was   not  a   positive                                                                   
response. Representative Fairclough  declared her support for                                                                   
the university,  workforce development,  and K-12  education.                                                                   
She added  that Alaska is  experiencing a revenue  shortfall,                                                                   
but there is  the need to invest these revenues  in providing                                                                   
hope to rural communities and job creation for Alaskans.                                                                        
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 4:07 PM                                                                                            
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
DOLWDOverview hf 0209.pdf HFIN 2/3/2009 1:30:00 PM
HB 81
EDUCATION 10 year plan.pdf HFIN 2/3/2009 1:30:00 PM
HB 81
LABOR 10 Year Plan 2009.02.03 HFC.pdf HFIN 2/3/2009 1:30:00 PM
HB 81
UNIVERSITY 10 year plan 2009.02.02 HFC.pdf HFIN 2/3/2009 1:30:00 PM
HB 81