Legislature(2009 - 2010)HOUSE FINANCE 519
03/27/2009 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB199 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 199 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
March 27, 2009
8:37 a.m.
8:37:08 AM
CALL TO ORDER
Co-Chair Hawker called the House Finance Committee meeting
to order at 8:37 a.m.
MEMBERS PRESENT
Representative Mike Hawker, Co-Chair
Representative Bill Stoltze, 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
None
ALSO PRESENT
Karen Rehfeld, Director, Office of Management and Budget,
Office of the Governor; Mike Maher, Director, Division of
Administrative Services, Department of Environmental
Conservation; Larry Persily, Staff, Co-Chair Hawker; Les
Morse, Deputy Commissioner, Department of Education and
Early Development; Mark Lewis, Director, Administrative
Services, Department of Education and Early Development.
PRESENT VIA TELECONFERENCE
None
SUMMARY
HB 199 "An Act making supplemental appropriations and
capital appropriations; amending appropriations;
and providing for an effective date."
HB 199 was heard and HELD in Committee for further
consideration.
8:38:01 AM
HOUSE BILL NO. 199
"An Act making supplemental appropriations and capital
appropriations; amending appropriations; and providing
for an effective date."
Co-Chair Hawker noted that this hearing addresses non-
transportation items in the stimulus package. He requested
that committee members feel free to discuss additional
unscheduled components.
8:40:45 AM
Co-Chair Hawker listed the documents: "Items Not Included in
the March 19 Economic Stimulus Bill" and "Alaska Department
of Labor and Workforce Development" "American Recovery and
Reinvestment Act Unemployment Insurance Modernization March
27, 2009" and the programs to be discussed: education,
environmental conservation, revenue, and employment
insurance modernization.
8:43:27 AM
Representative Gara requested information from the
administration regarding federal "strings attached." He
admitted finding very few "strings" himself.
Representative Kelly requested that written testimony from
Tim Stanton be included in members' packets. Co-Chair Hawker
assured that all submitted written comments were included.
8:46:13 AM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, addressed Representative Gara's
question. She related that some items in HB 199 require
statutory and regulatory changes. Any sub-recipient falls
under state requirements. The state must assemble an
internal team to track and meet the additional requirements
placed on the federal grant programs. Other sub-recipients
will be asked if they can meet the required assurances.
Ms. Rehfeld explained the expectation to target the one-time
funds and seek benefits for Alaskans that do not build the
expectation for state general funds when the federal funds
are no longer available. She noted that new information from
the federal government is continuously forthcoming. The
current focus is achieving the best information possible for
the best decision making process. She informed that written
guidance received from the United States Department of
Energy stating that the required assurances apply to the
state energy program only and exclude weatherization and
energy efficiency grants.
8:49:45 AM
Ms. Rehfeld recommended viewing each assurance noting
requirements at state and local levels. She hoped that the
hearing could generate necessary information.
Co-Chair Hawker asked if the committee is wasting time
holding the hearing without the governor's input. The
governor may choose to not pursue these funds. He wished to
have assurance that the governor is receptive to working
with the legislature.
Ms. Rehfeld relayed that the governor wishes to have a
public discussion and the legislative process is part of
that discussion. She believed that the hearing was a
positive use of committee time.
8:52:11 AM
Representative Kelly requested a list of new employees
required for the implementation of the stimulus funds. He
wished for communication with the governor. He made a point
that "productive" could result in declining stimulus funds.
He expressed concern about the increasing budget.
8:54:26 AM
Co-Chair Stoltze found the process productive and wished to
continue the dialogue and dispel hyperbole. Co-Chair Hawker
agreed that the process was important.
Representative Gara rejected the governor's idea that the
stimulus money is a "bribe".
8:56:55 AM
Co-Chair Hawker suggested beginning with item #34 " Air Non-
Point Mobile Source Stimulus" with the Department of
Environmental Conservation (DEC). This is a $2 million item
with projects including diesel emission reduction and
increased fuel efficiency of stationary source diesel power
generation in Alaska villages.
Ms. Rehfeld reported that the Department of Environmental
Conservation (DEC) currently has an existing program with a
small grant. Through the economic stimulus package,
approximately $2 million is available for a competitive
grant program to help meet emission standards by upgrading
generation capabilities. She explained that DEC does not
have granting authority, which necessitates a statutory
change.
8:59:47 AM
MIKE MAHER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, explained the
details of the Air Non-Point Mobile Source in the air
quality division. He acknowledged the small grant currently
available, which is utilized in the Department of
Transportation and Public Facilities (DOT) for railroad use.
He requested a statutory change.
Co-Chair Hawker asked if new funds or positions would be
required for the program. Mr. Maher replied that no new
funds or personnel are required.
Representative Austerman asked if prepared legislation was
available for discussion. Mr. Maher responded that the
legislation was pending appropriate language.
Representative Gara asked for the name of the grant program.
Mr. Maher replied that the name was Air Non-Point Mobile
Source grant. Representative Gara asked to know the amount
of the grant. Mr. Maher responded $2 million and the
required statutory change.
9:03:21 AM
Representative Gara suggested improving energy efficiency in
existing diesel plants and wondered if these funds could be
utilized. Mr. Maher responded yes. Representative Gara asked
if the intention was to use the funds to improve energy
efficiency in existing diesel plants. Mr. Maher noted that a
grant program for the purpose specified must be identified,
but the DEC has no objection to the concept.
Representative Fairclough inquired about the cost of fuel
following the measure of emissions in rural Alaska. She
wondered if the addition of low sulfur fuel would raise the
cost of fuel in rural Alaska.
LARRY PERSILY, STAFF, CO-CHAIR HAWKER, opined that the cost
of fuel would remain constant. He explained the goal of
restructuring already existing diesel plants for increased
efficiency. There is no requirement to convert diesel to
low-sulfur fuel. Representative Fairclough believed the fuel
costs increased in Anchorage following the addition of low-
sulfur fuel. She commented that public testimony mentioned
the use of byproducts from fish oil and other waste
vegetables as potential methods of energy reduction.
Co-Chair Hawker added that the program is not limited to
low-sulfur diesel. Mr. Maher replied that a wide range of
alternatives are available for consideration. He mentioned
the various technologies available from the Environmental
Protection Agency (EPA).
9:06:25 AM
Representative Kelly voiced concern about this program
increasing fuel burning expenses in rural areas. He opined
that more regulation would not stimulate the economy.
Mr. Maher said these grants are applied for by each
community with collective decisions made about how best to
utilize the funds. Representative Kelly reiterated concern
about added regulations. He maintained that smog was not a
problem in rural areas, yet other problems do exist.
9:08:52 AM
Representative Salmon asked if the villages could apply for
the grants. Mr. Maher replied yes.
Representative Salmon asked about the intended goal for the
$2 million. Mr. Maher replied that the goal is to lessen
diesel emissions in a variety of ways. He emphasized that
the department would work with the communities to improve
air quality for people living near the diesel plants.
9:10:10 AM
Mr. Persily highlighted one benefit of the grant program is
increasing fuel efficiency by lessening emissions.
Representative Salmon mentioned that some of the villages
are limited in resources and specialized parts might lead to
excessive future costs.
Representative Joule thought the funds required no specific
commitment. Mr. Maher reported that the department would
work with the communities if they choose to apply. He noted
that the goal was efficiency, not increased costs.
Representative Joule asked if applying for funds would
commit the community to converting to low-sulfur fuel. Mr.
Maher stated that the application for the funds would not
lead to that commitment.
Representative Kelly quoted the Alaska Village Electric
Cooperative (AVEC) stating that "coupling use of ultra low
sulfur diesel with oxidative catalyst or particulate traps,
development and use of fish oil and vegetable oil, biodiesel
and installation of anti-idling technologies" all concern
him. He thought more personnel would be required as well.
Mr. Persily offered to provide research about the prior use
of the grants along with alternative uses for the $2
million.
9:15:16 AM
Representative Foster did not see employment generated in
the bush areas as a result of HB 199. He pointed out that
the money in this bill would generate funding for urban
areas.
Co-Chair Hawker asked if the money would do any good. Mr.
Maher thought the grants and the efficiencies would save
money.
Representative Joule used the term "smart grid" as it
applies to generators. He wondered whether the application
qualified for this money. Mr. Maher responded that while the
smart grid system is possible, the grant program is not yet
established. The division does not currently have grant
authority and has not explored the details. Representative
Joule noted that unanswered questions exist.
Mr. Maher hoped that communities would apply for the grants.
He reiterated that interested communities and the division
would communicate the details regarding the grants.
9:19:56 AM
Representative Gara summarized that the grants would be used
to help communities and to increase the efficiency of diesel
plants. Mr. Maher agreed that efficiency is the intent.
Representative Gara pointed out that the governor has the
opportunity to use the money appropriately.
9:21:59 AM
Representative Fairclough asked what "Air Non-Point Mobile
Source Stimulus" means. She listed the goals to reduce
diesel emissions and improve fuel efficiency. She asked what
non-point means. Mr. Maher offered to research the term and
report to the committee.
Mr. Persily added that the grant program is optional for
communities. He also offered to seek detailed information
for the committee regarding the grant's name.
9:23:42 AM
Representative Foster spoke of misleading earmarks for the
bush. He maintained that the money will be used to fund
experts from urban areas. He requested that funds be sent
directly to the bush for the short term.
9:24:59 AM
Vice-Chair Thomas reported that he receives four to five
emails a day about the expense of fuel in his district. He
stressed that the state should accept the money in order to
address this problem.
Representative Foster wished for prior communication from
the department regarding the item. Co-Chair Hawker did not
know if the departments were free to speak to legislators
about this issue.
9:27:22 AM
LES MORSE, DEPUTY COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, reported on the organization of the
funds. The formula funds include items #4, #5, and #7, which
would increase the amount of money in currently existing
programs. The funds would be distributed to districts
through the current formulas.
Co-Chair Hawker asked which formula. Mr. Morse responded
that #4 is the Elementary Secondary Education Act (ESEA) as
authorized by No Child Left Behind. The second item includes
Title IID or funds to support the integration of technology
in education. He continued that item #7 addressed the
Individual Disabilities and Education Act (IDEA) or special
education funds. The funds are formula funds that would
require current authorization.
9:31:27 AM
Mr. Morse reported on item #8 addressing state stabilization
funds. He noted that the funds were new. He stated that the
funds require assurances. These assurances include progress
toward rigorous college standards and assessments,
establishing a pre-K to college career data system,
improvements in teacher effectiveness and distribution of
highly qualified teachers, and intensive support and
effective interventions for the lowest performing schools in
the state.
Mr. Morse reported that the assurances were designed to
supplement a gap. If a gap does not exist, the funds would
be distributed to local agencies related to Title 1 dollars.
9:35:05 AM
Co-Chair Hawker summarized that the money must first be used
to "backfill" if there has been a reduction in program
funding. Mr. Morse concurred with Co-Chair Hawker.
Representative Fairclough expressed concern that the vice
president of the Alaska Federation of Natives would sue the
state if Alaska does not provide equitable funding for
schools. Mr. Morse clarified that the funding is adequate
and the unresolved item is not a question.
Co-Chair Hawker strongly suggested that every legislator
read the Moore Decision in its entirety.
9:37:35 AM
Vice-Chair Thomas asked about item #8 and the repair and
modernization of school facilities. He wondered if the $93
million could address the major maintenance list with the
legislature in compliance. Mr. Morse understood that a
district could make the individual decision to address all
of their major maintenance issues as long as the decisions
comply with the law. Vice-Chair Thomas asked if the
legislature could employ sidebars to require specific use of
the funds. Mr. Morse said the intent was to allow local
school districts to make those decisions.
Vice-Chair Thomas thought participation in the stimulus
package would benefit smaller school districts. Mr. Persily
said the Federal Department of Education anticipates the
release of more information regarding stabilization funds on
Monday. Mr. Persily clarified that Part A of the fiscal
stabilization ($93 million) is the portion discussed now. He
explained that Part B ($20.7 million) has been accepted by
the governor at the discretion of the legislature.
Co-Chair Hawker asked if it is possible to accept Part B
without accepting Part A. Mr. Persily understood that Part B
cannot be accepted without Part A. Co-Chair Hawker asked Mr.
Morse if that was his impression as well. Mr. Morse stated
that the department was without a clear answer to the
question, but he hoped for additional guidance from the
federal government.
9:41:10 AM
Representative Austerman requested the written information
cited by the department. Mr. Morse offered to provide his
briefing statements that were also presented to the school
districts. He informed that the United States Department of
Education has released briefing sheets as well. He offered
to provide the requested information to the committee. Co-
Chair Hawker offered to distribute the upcoming information
and ensure that it becomes part of public record.
Representative Salmon referred to the proposed use of the
money. He wondered if the money could be used for operation
expenses. He mentioned that the school district in Tanana is
in financial trouble and he wondered if the money might be
used to help. He asked about the distribution system for the
funds. Mr. Morse responded that only item #8 is being
discussed now and operating expenses would not be allowed.
One exception is teachers funded for Title I or special
education. The funds are distributed based on the relative
amount received in Title I. Co-Chair Hawker requested a
brief explanation of Title I.
9:44:45 AM
Mr. Morse explained that Title I funds serve economically
disadvantaged students. Co-Chair Hawker asked if all schools
qualify. Mr. Morse said all qualify, but two districts have
not applied for the funds.
Representative Joule spoke of major maintenance issues
versus the challenge of meeting graduation rates and opined
the funds should go toward student enhancement rather than
building maintenance.
Mr. Persily pointed out that the Federal Department of
Education would distribute 50% of the Title I and special
education funds next week. Co-Chair Hawker clarified that
the funds will be distributed if accepted and appropriated.
9:48:08 AM
Representative Kelly questioned Parts A and B. He understood
that Part A was also categorized as item #8 and Part B is a
portion of the $34 million in item #7. He asked about Part B
and its location in the committee packet. Mr. Persily
answered that Part B is not included on the list because the
governor approved it. Co-Chair Hawker announced that Part B
is found in the spreadsheet of "included items."
Co-Chair Hawker asked if the funds would lead to stronger or
weaker schools. Mr. Morse replied that any funding requires
a plan that focuses on student achievement. He believed in a
potential for a positive impact with focused planning.
9:51:01 AM
Co-Chair Hawker posited a positive hypothetical situation of
measured improvement in the schools. He wondered what
happens in two years when the funding level is decreased.
Mr. Morse agreed that decreased funding could present a
potential problem without forced proper planning. Oversight
in distribution of funds and follow up are essential. He
recommended seeking appropriate uses for one-time dollars.
He agreed that the risk exists without proper planning.
Co-Chair Hawker added that the planning process should
include an exit strategy. Mr. Morse reported that any plan
must include "what will you do when the money is gone".
Representative Kelly had a problem trusting that a system
that fails to graduate 4 out of 10 students will provide
planning for a delicate exit. He wondered if $500 on the
Base Student Allocation (BSA) would be a problem. He
commended the governor on her acceptance of the funds that
she did deem helpful. He worried about an exit strategy.
Larry Persily sympathized with Representative Kelly but
education is the largest item in the stimulus bill. He noted
that he was working with Senator Murkowski on this issue on
the federal level. Remember these are one-time funds so they
need to focus on short term investments and one-time
programs.
Co-Chair Hawker acknowledged these cited comments were
received from federal agencies required to administrate the
funds. He asked if the department has a sense of their
ability to exercise legislative intent in appropriating
these funds.
9:58:41 AM
Mr. Morse stated that the department had a responsibility
and accountability to the federal dollars. He admitted a
greater challenge with the acceptance of stabilization
dollars.
Representative Crawford requested focus on the goal of
educating Alaskan children. It is also a deficit when
Alaskan students fail to graduate, as important as financial
deficit. He opined that an exit strategy was not possible as
the birth rate in our country has increased, which will
increase the number of students requiring an education. He
recommended increasing teachers and aides as opposed to new
carpet in the classrooms.
10:01:49 AM
Representative Austerman mentioned the public testimony
indicating that one-time money can be used to train
teachers. He asked if a requirement to spend a portion of
the funds on teacher training might be implemented.
10:03:03 AM
Mr. Morse did not know if it was that simple. Many programs
are designed to help students with disabilities. He
recommended the provided approach, especially with one-time
funds. He opined that other strategies might prove difficult
to find. The specific requirement must comply with federal
law.
10:04:04 AM
Co-Chair Hawker warned that the committee would not proceed
beyond the education component of the bill today. He
recommended a Saturday meeting.
Representative Foster discussed the current national
emergency. He commented on those Americans who are out of
work. He requested items that aid in recovery now, as
opposed to future recovery.
10:05:55 AM
Mr. Morse explained that most decisions are made at a local
level. He recommended targeting programs toward certain
students. Building a system may require hiring a specialist
teacher who then would teach the rest of the staff. This
could be capacity building. He recommended better use of
technology in Alaska to provide teachers with better content
or build infrastructure for the program. School districts
understand how to plan for grants.
10:08:27 AM
Representative Foster supported Mr. Morse's comments. He
asked if the department can foresee hiring for jobs in areas
like Nome.
10:09:26 AM
Mr. Morse recalled potential programs in Representative
Foster's district. He was unsure about the origin of the
teachers hired. He noted that paraprofessionals are often
trained from in rural communities. He noted that progress
was necessary for educational transitions and head-start
programs. The key to success is careful planning and wise
use of money. He stated that Commissioner Ledoux feels
strongly that the funds must impact student achievement.
10:10:36 AM
Mr. Persily noted that the Department of Education (DOE) has
provided guidance for the use of special education funds,
which includes purchasing equipment and training
professional staff for the school district. He noted that
there are many opportunities for creativity. One of the
allowable uses suggested is for districts to work with
employers in the community to develop job placements for
students with disabilities.
10:11:21 AM
Co-Chair Hawker agreed that allowable use of the funding
includes physical improvements in classrooms and classroom
structures which have the potential to precipitate
additional employment in the community. Mr. Morse agreed.
Representative Gara asked if the department believes that
acceptance of the funds will enhance student achievement.
Mr. Morse responded that the intent is to work with the
school districts on planning targeted assistance to impact
student achievement.
Representative Gara clarified that hiring teachers is an
action supported by the committee. He continued that if a
school district decides to hire people in a time of economic
crisis, then that is the best way to enhance education.
10:13:10 AM
Mr. Morse noted that the allowable uses for the funds are
well defined. The department's interest is the improvement
of student achievement.
Representative Gara pointed out that Title 1 schools have
parent outreach coordinators who work to involve parents. He
understood that the process works. He presented one use for
the Title I money as hiring additional temporary staff to
encourage even greater parent involvement, which will lessen
future spending. Mr. Morse believed that would be an
allowable use of the Title I dollars. Representative Gara
asked if the department has an impact on the decision or
does it rest with the school districts. Mr. Morse responded
that the department distributes dollars based on the
districts' plans. Representative Gara encouraged use of
funds for parent outreach.
10:15:31 AM
Vice-Chair Thomas requested that the funds be used to
address Alaska's increased dropout rate. He requested a list
of Alaskan schools' dropout rates. He opined that funds for
major maintenance were also important.
10:17:37 AM
Representative Austerman recalled a prior discussion about
the 62 percent dropout rate. He understood that the No Child
Left Behind Act creates a barrier in reporting the actual
dropout rates. He also requested an accurate number
regarding dropout rates. He wondered how acceptance of the
stimulus funds might further complicate reporting
requirements.
10:19:30 AM
Mr. Morse addressed the graduation rate. He explained that
the measure for graduation rate is the number of students
that graduate within four years. The baseline data required
by the federal government is becoming clear with some new
baseline documentation. He understood that the requirement
is progress in certain areas. Alaska has made the necessary
progress in the required areas. With thorough understanding
of the baselines, the department feels confident that the
requirements can be met.
Representative Kelly asked if the legislature can stipulate
conditions for the use of grants.
MARK LEWIS, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF
EDUCATION AND EARLY DEVELOPMENT, stated that he did not
believe the state could introduce additional requirements.
Mr. Persily agreed that additional requirements not included
in federal law could not be added. He commented on how stern
intent language could be. Co-Chair Hawker thought the
federal language forthcoming would address the issue
further.
10:23:30 AM
Co-Chair Stoltze wondered if there could be a contract or
documentation, memoranda of understanding, with the school
district as to the use of the money. He wondered if the
funds would actually remain temporary. He referred to a
letter from the superintendent of the Anchorage School
District indicating that the funding is not temporary. He
voiced concern about future events without the additional
funds. He expressed interest in making policy decisions
versus micromanaging school district spending decisions.
10:27:01 AM
Co-Chair Hawker emphasized the importance of addressing this
legislation in a timely manner.
HB 199 was heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 10:29 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2008 Dropout Rates by District.xls |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| 2008 Graduation Rates by District.xls |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| DOL Powerpoint H. Finance 3-27-09.pdf |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| Copy of Economic Stimulus Not Included Op and CIP items.xls |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| ES_fact_sheet_labor.pdf |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| ARRA Cover 3-6 Final.pdf |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| ARRA_IDEA.DOC |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| ARRA_SFSF.DOC |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| ARRA_Title I.DOC |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| Dropout Rate Fact Sheet.doc |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| Graduation Rate Fact Sheet.doc |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| IDEA_fact_sheet_3-6 Final.pdf |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| SFSF_fact_sheet 3.6 Final.pdf |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |
| Title_I_fact_sheet_3-6 Final.pdf |
HFIN 3/27/2009 8:30:00 AM |
HB 199 |