Legislature(2023 - 2024)ADAMS 519
05/11/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB55 CS FOR SENATE BILL NO. 55(FIN) | |
| HB193 | |
| HB89 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 41 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 55 | TELECONFERENCED | |
| *+ | HB 193 | TELECONFERENCED | |
| + | HB 89 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
May 11, 2023
2:08 p.m.
2:08:33 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 2:08 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Mercedes Colbert, Staff, Senator Bill Wielechowski,
Sponsor; Kris Curtis, Legislative Auditor, Alaska Division
of Legislative Audit; Sylvan Robb, Director, Division of
Corporations, Business and Professional Licensing,
Department of Commerce, Community and Economic Development;
Laib Allensworth, Staff, Representative Bryce Edgmon;
Daniel Robbins, Staff, Representative Julie Coulombe;
Heather Carpenter, Health Care Policy Advisor, Department
of Health; Representative Zach Fields; Representative
Jennie Armstrong; Representative Justin Ruffridge;
Representative Jesse Sumner.
PRESENT VIA TELECONFERENCE
Jen Griffis, Public Policy Manager, thread, Anchorage.
SUMMARY
CSSB 55(FIN)
EXTND BDS: MEDICAL, DIRECT-ENTRY MIDWIVES
CSSB 55(FIN) was REPORTED out of committee with a
"do pass" recommendation and with one previously
published fiscal impact note: FN2 (CED).
HB 193 INTERNET FOR SCHOOLS
HB 193 was HEARD and HELD in committee for
further consideration.
HB 89 DAY CARE ASSIST./CHILD CARE GRANT PROGRAM
HB 89 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the meeting agenda.
CS FOR SENATE BILL NO. 55(FIN)
"An Act extending the termination date of the Board of
Certified Direct-Entry Midwives; extending the
termination date of the State Medical Board; and
providing for an effective date."
2:09:51 PM
MERCEDES COLBERT, STAFF, SENATOR BILL WIELECHOWSKI,
SPONSOR, thanked the committee for hearing the bill. She
explained that the bill would extend the termination date
of the Board of Certified Direct-Entry Midwives and the
termination date of the State Medical Board. She relayed
that the state auditor recommended a four-year extension
date through June 30, 2027 for the Board of Certified
Direct-Entry Midwives and an eight-year extension through
June 30, 2031 for the State Medical Board. She deferred to
Kris Curtis, legislative auditor for details on the audits.
Additionally, the Department of Commerce, Community and
Economic Development (DCCED) was available to address the
fiscal note.
Co-Chair Foster asked for a review of the audit.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, began with the audit findings for the
State Medical Board (copy on file). The audit concluded
that the board developed and adopted regulations to protect
the public, improve the licensing process, and expand
access to healthcare during the pandemic. Further, the
board served the public's interest by effectively licensing
physicians, osteopaths, and podiatrists; however, emergency
courtesy licenses for physician assistants were not always
issued in accordance with law. The audit also found that
the board's workload had increased substantially during the
audit period. The board met frequently, sometimes weekly,
to consider pandemic-related regulations and the number of
license applications considered by the board increased 28
percent compared to the pre-pandemic period. She explained
the increase was a result of physicians traveling to the
state to help meet the need for healthcare services during
the pandemic and out of state practitioners providing
services via telehealth.
Ms. Curtis relayed that board turnover and vacancies were
common during the audit period, but even with the
challenges, the audit found the board operated effectively.
The audit recommended an eight-year extension, which was
the maximum allowed in statute. She directed members to
page 8 of the audit report showing licensing information.
As of March 2022, there were 5,878 active licenses and
permits for the board. Page 10 showed the schedule of
revenues and expenses, showing that as of March 2022, the
board had a surplus of approximately $506,000.
Ms. Curtis directed members to page 14 of the audit report
and highlighted two recommendations. First, the audit
recommended that the board's executive director ensure all
board meetings were adequately public noticed. The audit
found that six of 32 meetings were not publicly noticed or
not publicly noticed accurately. Second, the audit
recommended that the board ensure emergency regulations
comply with statute. The audit found that when the board
established the physician assistant emergency courtesy
license regulation, they did not ensure that the applicant
had a collaborative plan with a supervising physician,
which was a statutory requirement. She relayed that
management's response to the audit began on page 25. She
reported that the governor, commissioner, and board chair
concurred with the findings and recommendations. She stated
that overall, it was a fairly clean audit.
2:14:29 PM
Ms. Curtis addressed the audit findings for the Board of
Certified Direct-Entry Midwives (copy on file). The audit
concluded that the board served the public's interest by
conducting its meetings in an effective manner, by
supporting statutory changes when deemed necessary, and by
actively working towards amending its regulations. The
audit also concluded that the board and the Division of
Corporations, Business and Professional Licensing (CBPL)
staff did not consistently certify midwives and apprentice
midwives in accordance with the law. Further, an
investigation that concerned a potential threat to public
safety was not addressed by CBPL investigators in an
efficient manner. The audit recommended the legislature
extend the board four years, which was half of the eight-
year maximum allowed in statute. The reduced extension
recommendation was based on a need for more timely
oversight of the board and on the fact that the board had
some draft regulations that would significantly change how
it licensed midwives in the future.
Ms. Curtis turned to page 5 of the audit report and relayed
that there were 47 certified midwives and apprentice
midwives as of June 2022. Page 7 showed a schedule of
revenues and expenses showing a surplus of approximately
$68,000 as of March 2022. The audit made four
recommendations for improvement beginning on page 9. In
regard to the investigations that were not done timely, the
audit recommended that the commissioner consult with the
governor's office and other policy makers to improve the
recruitment and retention of investigators. She stated that
because recruitment and retention was a statewide problem,
it should be addressed at a statewide policy level. The
second recommendation was similar in regard to improving
the recruitment and retention of licensing staff, which
contributed to the licensing errors discovered in the
audit.
Ms. Curtis turned to page 11 of the audit report and
addressed the audit recommendation for the director to work
with the board to ensure the online renewal licensing
application form was sufficient to monitor compliance with
continuing education. Additionally, the license referenced
incorrect regulations, which should be cleaned up. The
fourth recommendation, located on page 12, recommended that
the Office of the Governor's Boards and Commissions
director work with the board to identify interested
applicants to fill board vacancies in a timely manner. She
detailed that the board was composed of five members and
for 20 months it was down two positions and for two months
it was down three positions. She shared that the
commissioner, board chair, and governor's office concurred
with the findings and recommendations. She highlighted that
on page 26, the chair asked for an eight-year extension as
opposed to a four-year extension. The request was made
because the recommendations were mainly addressed to the
department and governor's office.
2:17:46 PM
Representative Hannan noted that the audit recommendations
did not really pertain to actions by the board. She
considered various extension options including four, six,
and eight years. She reasoned it was incumbent on the
agency to ensure the board was adequately staffed and
[investigations] were done in a timely manner. She
considered herself to be a fairly new legislator, but she
recalled renewing the board once before. She thought it
seemed there would always be a sort of panic to get on step
when they were down on staff and the concerns were
timeliness but not actions of the board. She asked if she
was missing something.
Ms. Curtis replied it was a common question whenever there
were recommendations addressed to the division and not the
board. She stated it was a legislative oversight mechanism.
She recommended taking a look at the board again earlier
rather than later because the board planned to
significantly change how it licensed midwives.
Additionally, she believed it was important to keep an eye
on the investigations for a board that impacted public
safety. She noted it was the second time there had been
issues with the investigations.
Representative Hannan asked Ms. Curtis to elaborate on any
communications the auditors had with the department about
their focus and ability to address the concerns raised in
the audit. She asked if the department had more
investigators. She wondered if the deficits [in the
division] would remain in four years. She did not recall an
increase in the division's budget for an investigator. She
believed the positions were unfilled. She wondered about
filling or addressing the positions and turning licenses
and investigations around in a timelier fashion.
2:20:22 PM
Ms. Curtis answered that the licensing issue was not
necessarily about timing but about not having the
appropriate documentation in the files or not following up
on certain things. She stated it was attributed to turnover
and vacancies. She stated the same was true with the
investigations. She relayed that the particular case was a
threat to public safety and had been identified in the
audit three years earlier. She reported that no progress
had been made on the issue. She detailed that the chief
investigator stated the division had an untenable workload
due to a high number of cases and a high number of vacant
positions and that efforts to hire had been unsuccessful.
She relayed it was a statewide issue. She explained that it
may not be a budgetary situation if the division could not
find someone to apply for a position or remain in a
position. She considered it may indicate a need for more
statewide policy pertaining to recruitment and retention.
Representative Josephson asked if the board and midwives
had to pay the audit fees if they had to come back in four
years.
Ms. Curtis answered that there was no cost to the
department for a sunset; it was just the department's time
and energy dealing with the auditors. She explained that
sunset audits were part of the Division of Legislative
Audit's budget. She explained that if there were seven
sunsets in a given year, more of the division's resources
would go towards the audits as opposed to doing special
audits at the request of the committee.
Representative Josephson asked from the perspective of the
midwives and board chair why it was so important for the
board to receive a seven-year extension versus four. He
asked if it felt insulting to the board and licensees.
Ms. Curtis answered that the individuals were passionate
about their work and the volunteers worked very hard. She
stated that time and time again she saw that the
individuals felt like it was like a grade on their report.
She stated they wanted an "A" and did not feel that a four-
year extension indicated an A. She acknowledged that the
individuals were doing a wonderful job, they worked very
hard, and the recommendation was not a reflection of their
time.
Co-Chair Foster noted that both of the boards would expire
June 30, 2023 if the bill was not passed. He asked Ms.
Colbert if she had anything to add prior to the review of
the fiscal note.
Ms. Colbert thanked the committee for hearing the bill and
thanked the senator's intern for carrying the bill in the
other body.
Co-Chair Foster asked for a review of the fiscal note.
2:23:43 PM
SYLVAN ROBB, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, highlighted that the
total annual cost to extend both boards was $25,200 from FY
25 through FY 29. She noted there were no costs shown for
FY 24 because per statute, if boards were not extended,
there was a one-year wind down period; therefore, the
division would pay for the board in FY 24 regardless of the
status of the bill.
Representative Hannan asked how the department was doing in
hiring the investigative position and filling the vacancies
that had created some demerits on the audit.
Ms. Robb responded that the division had been successful in
staffing its investigations unit. She detailed that the
unit had been fully staffed until the end of March with 23
filled positions. An individual had retired at the of March
and the position had been filled with an internal promotion
meaning there would still be a vacancy. She stated the
division was doing much better in terms of having the
investigation positions filled.
Representative Hannan asked if the department believed it
would be able to support the board to fully comply with
statute for the next four years if the sunset was extended.
Ms. Robb replied affirmatively.
Co-Chair Edgmon MOVED to REPORT CSSB 55(FIN) out of
committee with individual recommendations and the
accompanying fiscal note.
There being NO OBJECTION, it was so ordered.
CSSB 55(FIN) was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN2 (CED).
HOUSE BILL NO. 193
"An Act relating to funding for Internet services for
school districts; and providing for an effective
date."
2:26:55 PM
REPRESENTATIVE BRYCE EDGMON, CO-CHAIR, HOUSE FINANCE
COMMITTEE, SPONSOR, reviewed that the bill that would allow
for improved internet services for schools qualifying for
the federal E-rate across the state. The E-rate program
flowed down through the federal Communication Commission
Universal Services Fund to the state broadband programs.
The federal matching rate for Alaska was $8 to $9 for every
state dollar put forward. He explained the program got its
start in Alaska with the state Broadband Assistance [Grant]
(BAG) program put into law in 2014 to implement a speed of
10 megabytes [megabits] per second. For context, he
referenced individuals in the Capitol Building who could
not access their internet recently. He had been told their
current speed was about 5 megabytes per second. He asked
members to imagine how slow 10 megabits would be. He
relayed that in 2020 the legislature upped the 10 megabits
per second threshold to 25 megabits per second. The bill
proposed to increase the number to 10 megabytes.
Co-Chair Edgmon asked committee members to keep in mind
that the committee heard a bill setting up the Alaska
Broadband Office, the advisory committee, and establishing
the framework in statute to open opportunities for a
massive amount of incoming federal money to provide high
speed, affordable, and equitable broadband services to all
user groups across the state. The current bill before the
committee addressed the numerous schools hampered by slow
internet without the ability to do videoconferencing,
standardized testing, basic emails and coursework. The bill
proposed to increase the threshold from 25 megabits per
second to 100 megabits per second. He was told there would
be a bill from the other body possibly coming to the
committee soon. The intent of the current hearing was to
explain the big picture to the committee.
2:30:47 PM
Representative Coulombe stated that she had chaired the
Department of Education and Early Development subcommittee
and it was obvious the upgrade needed to take place. She
noted schools were really struggling. She observed that a
backup document primarily showed GCI and ACS [as service
providers]. She asked if Starlink could be used with the
grants or if the BAG program was limited to certain
providers.
LAIB ALLENSWORTH, STAFF, REPRESENTATIVE BRYCE EDGMON,
replied that the contracts were individually bid upon by
school districts and districts were able to choose their
provider. He was not certain about Starlink's involvement
and whether it had the capacity to provide the level of
service provided for a school district.
Co-Chair Edgmon added that the program would provide the
flexibility to work with GCI or ACS and to ensure the 100
megabits per second threshold included download speeds (the
signal coming to the school) and upload speeds (the signal
leaving the school). He stated that perhaps in some cases
Starlink could provide the service, but there were other
instances where GCI and ACS would provide the service.
Representative Hannan was startled to learn the specific
download rate was set in statute. She reasoned that the
statute would need to be updated every couple of years
because no one decreased in speed needs. She recalled as a
teacher when there had been mandatory state testing
conducted online, but schools had been unable to plug their
students in on the same day or time. She supported and
believed faster internet and a grant program were needed.
She asked if there was a mechanism to avoid having to make
a statutory change every two to four years. She wondered if
the adjustment could be made via regulation and grants in
the budgetary process.
Co-Chair Edgmon replied that ideally there would be
fiberoptic cable available in the next several years in the
middle and final mile capacity to schools far and wide. He
remarked there was a fiscal note attached to the bill that
was eyepopping in number, but it was a number that built in
all of the schools qualifying for the program if they could
get infrastructure in place. He considered the current E-
rate program as a bridge program so that going into the
future there should not have to be numerous iterations of
the bill going forward. He thought it could be the case for
some small schools that could not take advantage of the
federal funding coming in through the federal
Infrastructure Investment and Jobs Act (IIJA).
2:34:45 PM
Co-Chair Foster noted that Representative Stapp had joined
the meeting.
Representative Galvin stated the topic was relatively new
to her, although she was familiar with E-rate and its
importance to rural Alaska. She believed the legislation
referred to more than 20 school districts. She presumed
they were school districts that had historically used and
needed extra support for internet. She asked if her
statement was accurate.
Co-Chair Edgmon replied affirmatively. He explained that
much of the internet had been satellite driven or through
microwave transmission and perhaps fiberoptic in some
smaller instances for online school. He elaborated that
fiberoptic cable was finding its way down the Yukon-
Kuskokwim (YK) region in the next couple of years. He added
that Quintillion line was being laid around the state up
north and in Co-Chair Foster's region. He remarked that it
would be fiber optic driven and a lot of schools would be
able to enjoy the same amount of broadband that schools in
urban Alaska provide. He had been told recently that the
broadband used in the Capitol Building was several hundred
megabytes per second. The bill talked about getting a
school (e.g., Nome-Beltz High School with 500 plus
students) to maybe 100 megabytes. He stated there was still
a lot of catching up to do. He was optimistic because
hopefully in the future it would not be as funding source
challenged as it was in the past.
2:36:52 PM
Representative Galvin surmised the bill aimed to ensure the
minimum speed was met in the school districts and that
funding was available.
Co-Chair Edgmon answered, "To qualify through the E-rate
program." He added there may be other means that schools
used. He explained they were talking about a lot of schools
across the state. He relayed that his staff could provide
an exact number.
Representative Galvin underscored the importance of the
issue. She knew that many districts would like to
participate in opportunities for online learning, but after
signing up they did not have the bandwidth to make it
happen. She appreciated providing a bit more equity for all
of Alaska's students.
Co-Chair Foster noted Co-Chair Johnson had joined the
meeting.
Representative Cronk looked at the fiscal note and asked if
the installation of fiber optic would eliminate or decrease
the need for the funds in the note.
Co-Chair Edgmon answered that the number [in the fiscal
note] projected outward as if every school qualified for
the federal E-rate program and had the infrastructure to
participate in the delivery of service. He relayed that a
provider had cautioned earlier in the day that it would
take time. The number was at the ceiling of what could be
out there. In the meantime, fiber optic cable was going
through the Dillingham region and extended up through the
YK region and Bethel area. He remarked it would take some
of the schools off the list that would otherwise be
competing for the federal E-rate money.
2:39:01 PM
Co-Chair Edgmon thanked the committee for hearing the bill.
He stressed the importance of the issue and hoped and
looked forward to an additional hearing perhaps of the
Senate bill.
HB 193 was HEARD and HELD in committee for further
consideration.
2:39:49 PM
AT EASE
2:42:45 PM
RECONVENED
HOUSE BILL NO. 89
"An Act relating to the day care assistance program
and the child care grant program; and providing for an
effective date."
2:42:53 PM
REPRESENTATIVE JULIE COULOMBE, SPONSOR, thanked the
committee for hearing the bill. She introduced the bill
with prepared remarks:
HB 89 strengthens the childcare system in a number of
ways. It expands the number of families who can
utilize daycare vouchers and aligns the subsidy level
to reflect the actual cost of daycare. It makes
childcare expenditures and cash or equivalent accepted
by daycare facilities and payments to employees for
the purpose of offsetting childcare costs eligible for
tax credits. It increases the maximum individual tax
credit limit, develops a sliding fee scale to make
grants less generous for higher income families and
lower income families and provides grants for the
highest performing and highest quality childcare
facilities.
Representative Coulombe explained that at the outset the
bill did two things including the commission of a study to
find out the actual cost of daycare. She explained that
currently there was a market survey, which was basically
rates providers were currently charging; however, it was
not working because daycares were going under. She
explained it was not enough to keep daycares in business.
The department was conducting a survey to identify the
actual cost of care. The bill would adjust the amount up in
consideration of vouchers. Second, the bill would expand
the opportunity for families of different income levels to
access care. She shared that when she had first started as
a legislator, she had heard from many people in the private
sector who were struggling with workforce and one of the
largest problems was daycare. She elaborated that she
managed numerous people in her line of work and the lack of
childcare caused employees to miss work, arrive late, and
leave early. She considered the bill as a support for
families and workforce. She requested her staff to provide
a brief presentation.
DANIEL ROBBINS, STAFF, REPRESENTATIVE JULIE COULOMBE,
provided a PowerPoint presentation titled "HB 89 Child
Care" (copy on file). He began on slide 2 and discussed
that the bill aimed to fix the lack of affordable, quality
childcare. The lack of childcare worsened labor shortages,
endangered children, undermined families' economic
security, and decreased workforce participation. He relayed
that the solution was to strengthen the childcare sector to
improve access for families and help parents return to the
workforce (slide 3).
Mr. Robbins detailed that the bill strengthened the
childcare system in a number of ways (slide 4):
• Expands the number of families who can utilize daycare
vouchers
• Aligns the subsidy level to reflect the actual cost of
care
• Incentivizes tax breaks for employers to donate to
daycare facilities
• Increases the maximum tax credit
• Eliminates sudden drop-off of subsidies for higher
income families
• Provides grants to the highest performing/quality
daycare facilities
2:47:03 PM
Mr. Robbins reviewed that Alaska's childcare was in crisis
as a result of low wages, labor shortages, and a declining
number of childcare providers (slide 5). The graph on slide
6 showed that during the height of the COVID-19 pandemic,
there was a large dip in the number of childcare workers.
While the number had rebounded, it had not returned to its
level prior to the pandemic. He moved to slide 7 and
discussed that childcare subsidies were inadequate and did
not reflect the actual cost of care. He stated it was a
problem because it impacted lower income families and
middle class families. He explained that subsidies were
inadequate. He detailed that providers lost money when
offering care to lower income families and consequently
they were raising rates on middle class families, which in
turn forced additional families out of the workforce to
stay home and care for children.
Mr. Robbins addressed who was eligible for subsidies on
slide 8. Currently, the eligibility threshold was 85
percent of the state median income ($60,144 in Alaska for
one earner with one child). The threshold left most of the
middle class without affordable care and resulted in labor
shortages in every industry in Alaska. The bill raised the
eligibility threshold to 105 percent of the state median
income ($73,920 in Alaska for one earner with one child).
He stated the department would scale subsidy level based on
need. He explained that the expanded number of families who
could afford care would result in more Alaskans going back
to work.
2:49:32 PM
Mr. Robbins discussed the subsidy rate calculation on slide
9. The subsidy rate was currently based on a market survey;
however, it underestimated the cost of care, which put
providers in greater financial risk and resulted in lower
income families not being able to obtain adequate
subsidies. The situation resulted in increased rates for
middle income families, which priced families out of care.
The bill aligned subsidy rates with actual cost of care,
which improved provider financial stability and
affordability for the middle class.
He turned to slide 10 and explained that a family with a
household income of $60,000 per year should not spend more
than $4,200 per year on childcare costs. Currently those
families were spending $6,600. He moved to slide 11 and
discussed that parents had reported that childcare issues
had caused them to go from full-time to part-time
employment and had prevented them from accepting jobs. He
shared that Missouri had proposed a tax credit to daycare
facilities for making capital improvements (slide 12).
North Dakota was spending over $70 million per year on its
childcare program aiming to make childcare affordable and
improve availability and quality (slide 13).
2:51:15 PM
Mr. Robbins provided a recap on slide 14. The solution was
to expand the number of families who were eligible for
childcare subsidies under the Child Care Program Office,
which would help more parents afford childcare and get back
to work.
Representative Coulombe relayed there was an issue with the
phone system and the committee may have to wait to ask the
department questions.
Representative Josephson stated that the Senate had $15
million for block grants. He asked if the funding was for
the program in the bill or something different.
Representative Coulombe replied that the [Senate] funding
was for childcare block grants to help subsidize childcare
centers. She clarified that HB 89 addressed vouchers
parents applied for that also went to childcare centers.
She stated that daycare centers were a terrible business
model for profit. The facilities would never be able to
charge what it actually cost to provide the service;
therefore, they would always be subsidized. She explained
that the grants [referenced by Representative Josephson]
and the vouchers helped make a difference. She added that
some of the items in the bill had come as amendments
throughout the committee process (e.g., the tax credits).
She was open to other things. She reiterated that the
vouchers and daycare grants ultimately ended up at the
childcare center, but the [childcare grants] were more
direct from the department to the centers.
2:53:57 PM
Representative Josephson looked at slide 13 and asked if
Mr. Robbins had stated that North Dakota invested $70
million per year or $7 million per year.
Mr. Robbins replied, "$70 million."
Representative Josephson remarked that North Dakota had
just a few thousand more residents than Alaska.
Representative Galvin looked at the bullet point on slide 4
that read "incentivizes tax breaks or employers to donate
to daycare facilities." She asked if it meant tax breaks
would be given to those donating to daycare. She asked if
it was similar to the University system where donating
businesses received a tax break.
Mr. Robbins answered that it was similar. The bill would
give tax breaks for businesses donating to daycare centers.
Representative Galvin asked for verification that the bill
would give tax breaks to incentivize donations.
Mr. Robbins agreed.
Representative Galvin looked at slide 8 and remarked that
the bill would increase the number of families with access
to childcare. She asked if there was available data
indicating what the expansion would look like.
Mr. Robbins replied that the Child Care Program Office did
not provide hard numbers indicating the number of families
the bill would help.
Representative Galvin echoed comments made by
Representative Josephson. She remarked that over $70
million was invested in North Dakota. She elaborated that
the issue had been present in Alaska for decades. She
highlighted that investing in a child's early years with
high quality early learning standards resulted in a much
higher workforce. She thanked the sponsor for calling the
committee's attention to North Dakota.
2:58:02 PM
Representative Ortiz thanked the sponsor for the
legislation. He looked at the bottom bullet on slide 4
specifying that the bill would provide grants to the
highest performing/quality daycare facilities. He asked who
determined which facilities were the highest performing.
Mr. Robbins replied that there were quality standards. He
detailed there were different levels [of quality] and the
number was displayed at each daycare facility. He believed
the maximum level was 5 and there were no facilities in
Alaska exceeding level 3. He stated the goal would be to
get to higher levels by providing grants.
Representative Coulombe elaborated that the item referenced
by Representative Ortiz was an amendment that came later
[in a prior committee of referral]. She explained the
amendment aimed to incentivize a higher quality of care.
She relayed there was currently a rating scale of 1 to 5
and each daycare had a licensed childcare rating. She did
not want to make the requirement yet; therefore, the bill
included an option for the department that a daycare
facility rated 3 or higher could get additional funding for
performance. Part of the performance included interaction,
educational opportunities, the number of adults per child,
nutrition, and one other item. She stated it was a pretty
standardized system and she was amenable to the amendment
because it did not implement anything new and would use the
existing structure to incentivize childcare centers doing a
great job. Unfortunately, there was not currently a daycare
center above level 3. The goal was to incentivize
facilities to get a level 5 rating.
Representative Ortiz asked if there was someone from the
department visiting the various daycare centers around
Alaska determining that thus far, no one had exceeded a
level 3. She remarked that the department would likely be
able to provide more details.
3:01:10 PM
HEATHER CARPENTER, HEALTH CARE POLICY ADVISOR, DEPARTMENT
OF HEALTH, responded to the question by Representative
Ortiz. She highlighted that the department had plans to
dive into metrics around the grant portion of childcare and
the subsidizing of high quality care facilities. She noted
that unfortunately the program expert was unavailable
during the current meeting. She elaborated that one of the
reasons the governor had created a taskforce to look at
childcare was to task the department with determining how
to stabilize the sector and to consider what needed to be
looked at when considering how to reimburse things like
quality. She reminded the committee that childcare licenses
ranged from small providers in a home with a couple of
children to large facilities serving numerous children. She
noted the department wanted to account for the different
types of facilities when applying quality metrics. She
remarked that it was never a simple answer and childcare
was an incredibly complicated sector when thinking about
levers and options to consider.
Representative Ortiz discussed the concept of offering tax
credits. He remarked it assumed that childcare providers
were paying some tax. He asked if even the smaller
providers were paying a tax they may qualify for a credit
for. Alternatively, he asked if only corporate centers that
paid corporate taxes would get the credit.
Mr. Robbins answered that the tax credits were for
businesses providing any kind of assistance to daycare
facilities for things such as capital improvements.
Representative Coulombe responded that it was a corporate
tax. For example, the amendment was intended to apply to a
business like ConocoPhillips for having a childcare center
in the building or helping their families pay for their
childcare. She was not aware of any related taxes for small
businesses.
Representative Ortiz surmised that smaller providers would
not benefit from the tax credit portion of the bill.
Representative Coulombe agreed. She stated her
understanding there would not be a significant number of
opportunities for the particular benefit. She stated it was
also on a case by case basis and depended on the daycare
center. She believed the amendment was focused on larger
corporations.
3:04:41 PM
Co-Chair Edgmon thanked Representative Coulombe for
bringing the bill forward. He viewed the bill as one of the
more innovative pieces of legislation that would come
forward during the current session. He underscored that
Alaska had significant outmigration challenges, especially
with younger people and younger families. He believed the
bill and taskforce could help with that outflow. He had
heard from statewide associations that wages in childcare
centers were in the $12 to $13 per hour range. He stressed
the providers could not compete when it was possible to get
a job at Walmart paying $18 to $20 an hour. He referenced a
Hunt Institute summit on February 5 in Juneau that half the
committee had attended. He relayed that the summit had
talked about how Virginia, Mississippi, and North Dakota
were making childcare assistance an integral part of their
workforce development. He hoped the bill received swift
consideration.
Representative Coulombe thanked Co-Chair Edgmon for his
comments. She shared there had been someone representing
the Kenai private sector economic community at a recent
House Ways and Means Committee meeting. The individual had
stated there were three things government needed to solve:
daycare, transportation, and housing. She stated that she
heard from individuals across the private sector all
reporting that daycare was an issue. She recognized that
there were issues with the public sector too. She
considered it to be a workforce and pro-family issue. She
thought it fit with the governor's efforts to make Alaska a
pro-family, pro-life state.
Co-Chair Foster recognized Representative Zach Fields in
the audience.
Representative Hannan thanked Representative Coulombe for
taking on the issue. She recalled in the early 1990s when
high tech companies and hospitals were competing for a
limited work pool by offering childcare on their work
premises. She referenced the tax incentive in the bill for
corporations and asked if Representative Coulombe had heard
from corporations that the bill would incentivize them to
open on-premises facilities for their workforce.
Representative Coulombe answered that she had not talked
with corporations personally. She had spoken with many
businesses and believed they would jump at the chance to
help people get steadier daycare.
Representative Hannan noted there was a legal memo in the
bill packet about changing the rates. She referred to
Representative Coulombe's reference to the current market
survey method versus the actual cost of care [being used to
determine rates]. She recalled that when she was first
elected there had been an inadequate response to the market
survey but the rate had been set for two years. She asked
if the bill would get the state into a problem with federal
subsidies if the state changed from a market survey. She
stated her understanding the market survey was mandated
based on respondents and not the actual cost of care. She
asked if the cost of care study was in place or if it was
something the bill dictated the department to do.
3:09:49 PM
Ms. Carpenter replied that the department had worked with
the entire Juneau delegation on the issue. She noted it had
been one of the first issues she had worked on when she
started with the Department of Health (DOH). She stated
there were two methodologies the federal Administration for
Children and Families (ACF) allowed the state to use
including the market rate survey and the actual cost of
care. She elaborated that the intention (facilitated by the
work of the task force and commissioner) was to determine
whether the department could set up a cost of care analysis
and the methodology would have to be approved by the
federal government. The intention was to continue with the
market rate survey during the cost of care analysis to
ensure the department was looking at the rates and bringing
them more up to date. The plan was to determine whether
using the cost of care methodology was the better way to
pay for care. She referenced the legal memo by Legislative
Legal Services about increasing the threshold paid. She
detailed that ACF capped payment for care at 85 percent of
the state median income. She explained it meant that under
the bill anything between 86 percent to 105 percent of
state median income would have to be covered by general
funds.
Representative Hannan asked if that was reflected in the
bill's fiscal note. Alternatively, she wondered if the
fiscal note reflected the cost of the study to determine
how many people would be in the new gap area.
Ms. Carpenter answered that the fiscal note did not
currently include what it would cost. She explained that
the fiscal note system did not allow the department to add
an indeterminate on the front page of the grants line. The
note showed the cost of positions the department would
need. The page noted the indeterminate cost. The department
did not know the number of families that would enroll,
which made estimating the cost difficult. She shared that
as of February there were 2,739 children currently
receiving subsidies through the Childcare Program Office.
She detailed that 96 of the 2,739 (or 3 percent) were
served at the highest rate (75 percent to 85 percent of
state median income). She explained that the higher a
family's income, the higher their copay. She elaborated
that a parent stayed home with the kids in some families.
The department did not know if the change would be enough
to incentivize. She added that currently, nothing in the
bill directed DOH to decrease copays made by families. The
copay was on a sliding scale and the legislature could
direct the department to look at the lever. She thought it
warranted a conversation about whether a copay was
affordable when a family was making more money.
3:13:47 PM
Representative Hannan thought one of the downsides of the
fiscal note was that it did not show the lost economic cost
to Alaska due to inadequate childcare. She appreciated the
efforts on the bill. She remarked that it would not be a
single fiscal note. She highlighted that the cost of
providing more childcare would create an economic wheel
that would result in more working Alaskans and more
revenue. She stated it would benefit everyone.
Co-Chair Foster stated the information would be interesting
to see in the fiscal note, but hard to quantify.
Representative Tomaszewski referred to the individuals
currently covered (those up to 85 percent of the state
median income). He believed Ms. Carpenter had stated there
were about 2,700 individuals. He asked how much it
currently cost in general funds and federal funds.
Ms. Carpenter did not have the number on hand. She
clarified that the funding was all federal and paid for
with a block grant.
Representative Tomaszewski asked for verification that
anything from 85 percent to 105 percent [of the state
median income] would be paid for with state general funds.
Ms. Carpenter agreed.
Representative Tomaszewski asked Ms. Carpenter to review a
chart in members' packets.
Ms. Carpenter noted that Representative Tomaszewski was
referring to a chart showing what a family's copay would be
based on their income and number of individuals in the
house ["Family Income and Contribution Schedule" revised on
February 21, 2022 (copy on file)]. She explained that
individuals at the lowest of state median income would have
a 1 percent copay. At that lowest rate, the copay for a
two-person household (one parent and one child) would be
$1. She elaborated that a two-person household earning
$5,012 per month would pay 9 percent of its income towards
the copay ($451 per month). She explained that when the
department worked with a daycare enrolled with the
Childcare Program Office, the department took out the copay
the parent should pay and paid the rate directly to the
childcare facility. She noted that what the department
helped pay for the family was separate from the grant
program contemplated in the legislation.
3:17:31 PM
Representative Stapp thanked Representative Coulombe for a
bill aimed at tackling a challenging issue. He had a couple
of concerns with some of the sections in the bill. He
considered the long-term fiscal impact, specifically the
tripling of the existing tax credit. He noted the bill
stated that after 2030 there would be a five-year rolling
inflation adjustment indexed to the Consumer Price Index
(CPI) for all urban consumers for urban Alaska. He noted
the CPI was very different for Fairbanks and Juneau than it
was for Anchorage, which made it difficult to calculate a
long-term fiscal note. He did not know how it was possible
to project the cost with the inclusion of the specific
provision. He asked for comment.
Ms. Carpenter responded that the section was not overseen
by the department.
Representative Coulombe replied that the topic came up in
one of the prior committees during a hearing on the bill.
She asked if Representative Stapp was referring to page 7.
Representative Stapp replied that he was referring to
repeating language on pages 3, 6, 9, 12, 15, 18, and 21. He
referenced lines 11 to 16.
Representative Coulombe asked if Representative Stapp's
concern was the connection to inflation.
Representative Stapp agreed and stated that the provision
effectively put increases on autopilot in perpetuity.
Representative Coulombe replied that the provision was
connected to the amount in place in the past. She believed
the concern was valid and she would follow up on the
question.
Co-Chair Foster moved to invited testimony.
3:21:05 PM
JEN GRIFFIS, PUBLIC POLICY MANAGER, THREAD, ANCHORAGE (via
teleconference), thanked the committee for the opportunity
to testify on the current challenges facing childcare and
families and to discuss how the bill could help address
some of the challenges. She explained that thread was a
statewide nonprofit that had been serving the childcare
sector in Alaska for over 35 years. The organization
provided direct services to families, early educators, and
childcare programs throughout the state. She read from
prepared remarks (copy on file):
As you have heard through the session, childcare has
been struggling. While this is not a new struggle - it
has always been challenging to find and afford quality
childcare - it is a struggle that is increasing as
early educators continue to leave the workforce and
childcare programs continue to close. This continued
decline in childcare availability is having a
significant impact on the workforce challenges in
other sectors and broader economic impacts as well.
Historically, the gap between availability within all
early education settings (pre-k, Head Start and
childcare) and the need in Alaska has been about 20%.
Since the pandemic, the challenges facing the
childcare sector have increased, primarily related to
attracting and retaining workforce. We are working to
update our data regarding the current gap in early
education, but the self-reporting we are hearing from
various programs and communities across the state
indicate some are experiencing declines in their
enrolled capacity as high as 40% due to workforce
shortages. This has resulted in classroom and program
closures further restricting the supply of available
childcare.
Federal stabilization funds during the pandemic
provided support to childcare providers. These funds
were delivered in three phases, with the most recent
phase, Phase 3, being distributed in April. Data on
the impact of the Phase 2 funds has been gathered and
will be shared soon, but the preliminary analysis
demonstrates that the $50 million in stabilization
funds that went directly to childcare providers and
programs kept childcare businesses open that would
have otherwise closed. But we also know that
investment alone was not enough to keep all programs
open or all early educators in the field.
While thread is advocating for additional direct
support for both early educators and childcare
programs during this coming fiscal year, we also
believe that creating a more stable childcare sector
will require shifts in the current policies around
Alaska's childcare assistance programs. House Bill 89
addresses two of these policy shifts - increasing
eligibility for the childcare assistance program and
including a cost of care model in the determination of
provider reimbursements.
Currently, the income eligibility limit for
participating in childcare assistance is 85% of state
median income. Increasing this eligibility limit would
allow more families to participate in the childcare
assistance program reducing their childcare costs.
This change has the potential to increase workforce
participation across multiple sectors. Additionally,
Additionally, childcare providers are currently
reimbursed at rates set by a market price survey that
is based on the amount providers charge for care, not
what it actually costs childcare programs to provide
quality care. When systems base childcare policies,
including childcare reimbursement rates, on a market
price survey that does not consider the true cost of
care it creates an unstable foundation for the
childcare system, a foundation that - as we've
witnessed - will struggle to weather economic and
societal pressures. Including cost of care analysis in
policy and fiscal planning for childcare provides a
foundation for a more stable system.
thread believes stabilizing Alaska's childcare system
and supporting Alaska's workforce requires policies
that reduce costs for parents and increase support for
childcare providers. These policies are the foundation
of HB89. We appreciate the sponsor for bringing this
bill forward and continuing the conversation around
childcare policy. While we were not able to testify
before the committee today due to other commitments,
if members have questions or need additional
information as they consider this bill please don't
hesitate to reach out. Thank you for your continued
support for Alaska's children and families.
Co-Chair Foster recognized Representatives Jennie
Armstrong, Justin Ruffridge, and Jesse Sumner in the room.
He thanked Ms. Griffis for her testimony.
Representative Coulombe provided closing remarks on the
bill. She thanked the committee for listening to the bill.
She relayed that she had heard from some individuals who
were concerned about government taking over childcare. She
detailed that those concerned individuals believed parents
should be staying home with their children. She agreed it
was the optimal situation, but things had changed and were
very different than when she had raised her kids. She
shared that when she had raised her kids there had been
enough stay-at-home moms to help each other out. She
reported that her street was now empty during the day
because everyone was at work. She clarified she was not
intending to build a bunch of government run daycares. She
was aiming to tackle the problems of daycare and she was
open to creative ideas. She believed some communities had
mom-and-pop daycares taking care of kids. She noted that
the committee had passed an amendment by Representative
Galvin to help fund some smaller daycares. She stated the
bill was a working document and she was open to ideas for
improvement. She wanted the bill to be the best possible
and to meet the most needs. She noted that was where the
tax credits had come from. The goal was to come up with a
creative solution involving partnership with the private
sector, helping small daycares, subsidizing larger
daycares, and ensuring quality service. She relayed that
the bill focused on a serious issue that needed to be
addressed.
HB 89 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed amendment deadlines for various
bills including HB 178, HB 112, SB 77, and SB 81.
Co-Chair Foster relayed that he would recess the meeting
until the following day at 8:00 a.m.
Representative Hannan asked when Co-Chair Foster may know
if the 8:00 a.m. meeting would happen.
Co-Chair Foster answered that hopefully they would know by
5:00 p.m. that afternoon.
Representative Ortiz asked about the amendment deadlines
for the following day.
Co-Chair Foster reread the amendment deadlines for four
bills.
Co-Chair Foster RECESSED the meeting until the following
morning at 8:00 a.m. [note: the meeting never reconvened].
ADJOURNED
3:31:58 PM
The meeting was adjourned at 3:31 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 89 Presentation v.3.pdf |
HFIN 5/11/2023 1:30:00 PM |
HB 89 |