Legislature(1993 - 1994)
02/11/1994 03:00 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE February 11, 1994 3:00 p.m. MEMBERS PRESENT Rep. Cynthia Toohey, Co-Chair Rep. Con Bunde, Co-Chair Rep. Gary Davis, Vice Chair Rep. Al Vezey Rep. Pete Kott Rep. Harley Olberg Rep. Bettye Davis Rep. Irene Nicholia MEMBERS ABSENT Rep. Tom Brice (excused) OTHER LEGISLATORS PRESENT Rep. Mark Hanley COMMITTEE CALENDAR HB 84: "An Act implementing certain recommendations of Alaska 2000 to improve the state's education system; and providing for an effective date." PASSED WITH INDIVIDUAL RECOMMENDATIONS *HB 409: "An Act relating to the maximum amount of assistance that may be granted under the adult public assistance program and the program for aid to families with dependent children; proposing a special demonstration project within the program of aid to families with dependent children and directing the Department of Health and Social Services to seek waivers from the federal government to implement the project; and providing for an effective date." HEARD AND HELD (* First public hearing.) WITNESS REGISTER TERRY CRAMER, Attorney Division of Legal Services Legislative Affairs Agency 130 Seward St., Ste. 409 Juneau, Alaska 99801-2105 Phone: (907) 465-2450 Position Statement: Answered legal questions on CSHB 84 VERNON MARSHALL, Executive Director National Education Association/Alaska 114 Second St. Juneau, Alaska 99801 Phone: (907) 586-3090 Position Statement: Testified in opposition to CSHB 84 SHEILA PETERSON Special Assistant to Commissioner Covey Department of Education 801 10th St., Ste. 200 Juneau, Alaska 99801 Phone: (907) 465-2803 Position Statement: Answered questions on CSHB 84 JAN HANSEN, Director Division of Public Assistance Department of Health and Social Services P.O. Box 110640 Juneau, Alaska 99811-0640 Phone: (907) 465-3347 Position Statement: Testified in support of HB 409 PUDGE KLEINKAUF 4201 MacInnes Anchorage, Alaska 99508 Phone: (907) 561-7113 Position Statement: Testified on HB 409 PREVIOUS ACTION BILL: HB 84 SHORT TITLE: IMPLEMENT ALASKA 2000 RECOMMENDATIONS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-PG ACTION 01/22/93 135 (H) READ THE FIRST TIME/REFERRAL(S) 01/22/93 135 (H) HES, JUDICIARY, FINANCE 01/22/93 135 (H) -FISCAL NOTE (DOE) 1/22/93 01/22/93 136 (H) GOVERNOR'S TRANSMITTAL LETTER 02/18/93 (H) HES AT 03:00 PM CAPITOL 106 02/18/93 (H) MINUTE(HES) 02/18/93 (H) MINUTE(HES) 04/05/93 (H) HES AT 03:00 PM CAPITOL 106 04/06/93 (H) HES AT 03:00 PM CAPITOL 106 04/06/93 (H) MINUTE(HES) 01/26/94 (H) HES AT 03:00 PM CAPITOL 106 01/26/94 (H) MINUTE(HES) 01/31/94 (H) HES AT 03:00 PM CAPITOL 106 01/31/94 (H) MINUTE(HES) 02/04/94 (H) HES AT 03:00 PM CAPITOL 106 02/08/94 (H) HES AT 03:00 PM CAPITOL 106 02/08/94 (H) MINUTE(HES) 02/11/94 (H) HES AT 03:00 PM CAPITOL 106 BILL: HB 409 SHORT TITLE: AFDC DEMO PROJECT AND DECREASE SPONSOR(S): REPRESENTATIVE(S) HANLEY,Therriault JRN-DATE JRN-PG ACTION 01/28/94 2176 (H) READ THE FIRST TIME/REFERRAL(S) 01/28/94 2177 (H) HES, FINANCE 02/11/94 (H) HES AT 03:00 PM CAPITOL 106 ACTION NARRATIVE TAPE 94-16, SIDE A Number 000 CHAIR BUNDE called the meeting to order at 3:05 p.m., noted members present and announced the calendar. He brought CSHB 84 to the table. HB 84 - IMPLEMENT AK 2000 RECOMMENDATIONS CHAIR BUNDE stated that Terry Cramer, from the Division of Legal Services, was available for questions and referred to the committee substitute (CS) version 8-GH1033/X (version X) of CSHB 84 and indicated that it would be the working draft. REP. G. DAVIS explained that the CS was the result of his proposed amendments from the committee's last meeting and a subsequent meeting with Chair Bunde. He said his initial concern was the initiation of a tenure review committee that would include teachers and administrators. He said the CS proposed a committee of no less than three and no more than five members. (Due to operator error, approximately 15 minutes of testimony was erased. For continuity, the tape numbers will not indicate the erasure. There is a prolonged pause on the tape indicating the lost testimony. Transcription for the lost testimony has been recreated with notes from the meeting. There will be no tape numbers used for this particular time.) REP. G. DAVIS indicated that in Section 7, line 21, a teacher may apply for tenure when the teacher has been offered a fourth consecutive full-year contract with the same school district. He also said that the section allowing for public comment was removed and that a parent could always personally address an administrator. (Rep. Nicholia and Rep. Kott arrived at 3:13 p.m.) REP. VEZEY asked Ms. Terry Cramer to explain the catalog revision system for subparagraphs. Number 100 TERRY CRAMER, Attorney, Division of Legal Services, Legislative Affairs Agency, explained that the old system used sequential letters and the new system uses a selection of random letters to protect confidentiality of the amenders. REP. VEZEY suggested the use of a computer random numbering system. CHAIR BUNDE opened the meeting to public testimony on CSHB 84. Number 120 VERNON MARSHALL, Executive Director, National Education Association/Alaska (NEA/AK), testified in opposition to CSHB 84. He stated that, although he has concerns pertaining to peer review within the legislation, the NEA/AK could support the tenure amendment. He said the CS would strengthen the evaluation of probationary teachers by providing for the creation of a nontenured teacher evaluation program. He said the system would be "bargained" since the process would be the only meaningful way teachers can impact decision making. MR. MARSHALL suggested that there be individual improvement plans for probationary teachers, requiring two formal observations and two evaluation sessions. He said that under the evaluation process there would be a preobservation and evaluation conference, a visit by the evaluator to the teacher's instruction site, and a post observation conference to discuss the instructional content observed. Resulting from the evaluation, an individual improvement plan would be developed by the administrator and the teacher. MR. MARSHALL stated that he was opposed to peer evaluation. He felt that good teachers would be taken out of the classroom much too often to attend to the demands of a tenure review committee. He said that the teacher who is out of the classroom longer than six weeks is no longer a peer because of the different sociological pressures of an observer role. MR. MARSHALL also felt that there were inherent procedural problems with the CS. He said there would be problems if a nontenured teacher applies for tenure in the month of May, explaining that the school year ends at that time and he questioned how the review committee would handle such applications. He also stressed the concern that the superintendent does no more than forward the recommendations and materials to the school board and the local tenure review committee. He also asked if a meeting was held by the tenure review committee upon receipt of the materials to consider the tenure application. Number 150 MR. MARSHALL said, as he understood the proposal, the recommendations of the review committee would then go to the school board. The school board would either accept or reject the recommendations. He inquired as to the length of time of the entire process. He also questioned why a teacher, under the proposed legislation, would not be allowed an opportunity to appear before the tenure review committee when his/her application and materials were being discussed. He asked if the reasons for denial of tenure were subject to any standards of burden on the review committee or school board to show reasonable cause. He asked if a nontenured teacher could be excluded from the confidential deliberations of the review committee. He felt there were no clear rights of appeal for the teachers who are denied tenure through the proposed legislation. (See Attachment 1 for a hand-out from Vernon Marshall of Alaska Administrative Code pertaining to the purpose, scope, method, and use of evaluation for professionals.) Number 167 MR. MARSHALL stated again that the goal was to improve the nontenured teaching staff. He said that he would support in-service. He further stated that if there was an evaluation plan for probationary teachers, he would support extending the tenure period an additional year. He felt if after the third year the teacher still had not achieved the specified standards, then they should seek employment elsewhere. Number 338 CHAIR BUNDE said that tenure is not granted until the first teaching day of the beginning of a teacher's third contract. He stated that applications should be submitted by teachers before the end of the school year and that the school board would have the summer to determine the result of the review committee. Number 366 MR. MARSHALL said there may be individuals who apply for tenure before the end of the school year that are not going to be granted tenure but would not know that until the beginning of the next school year. Number 391 CHAIR BUNDE said that as tenure is structured now, teachers do not officially receive tenure until the first teaching day of the third year. Number 407 REP. G. DAVIS stated the CS was a compilation of most all concerns of those who have followed and participated in the process, including NEA/AK. He felt that most of Mr. Vernon's concerns could be addressed. Number 459 CHAIR BUNDE asked Ms. Cramer if it is possible to make a "quick fix" change to page 6, line 12, indicating that the person who served as reviewer for a teacher who received two consecutive years of unsatisfactory evaluations may not be a member of the tenure review committee for the same teacher's reapplication. Number 491 MS. CRAMER said that it could be fixed and indicated that she would change page 6, line 20. Number 524 CHAIR BUNDE asked if the change was clear to the committee. Number 526 REP. VEZEY said that "there was nothing in the statute that prohibits the local tenure review committee from being different from the committee that does the review." He felt that the legislation was very permissive. Number 537 CHAIR BUNDE agreed and indicated that a diligent effort was made to make the statute permissive. He said the reviewer is not defined. He said that what was being addressed was not having the same reviewer on the review committee that had already reviewed a deficient teacher. Number 556 REP. G. DAVIS said it would be best to be specific by adding the additional language. Number 572 MS. CRAMER asked if there would be a problem if a person who had found a teacher's performance satisfactory serving in review of that same teacher again. Number 575 CHAIR BUNDE said that would not apply. REP. VEZEY asserted that many of the suggestions Mr. Marshall proposed are not prohibited by the statute. He felt the proposal should remain as is. Number 613 REP. OLBERG asked if the changes taking place would be offered as an amendment. Number 617 CHAIR BUNDE said yes. Number 616 REP. OLBERG stated that he would like to be the first person to object. Number 624 CHAIR BUNDE asked Rep. Olberg to speak to the objection. Number 636 MS. CRAMER, after some discussion, explained the new language by saying that on page 6, line 18, a sentence would be inserted after the period that would read: "A person who served as reviewer of the performance of a tenured teacher and who found the teacher's performance unsatisfactory, may not serve on the local tenure review committee that reviews that teacher's performance." Number 649 CHAIR BUNDE asked if the language was clear to the committee. Number 651 REP. TOOHEY made a motion to adopt CSHB 84 (version X) as a working draft. Number 657 CHAIR BUNDE asked for objections. Hearing no objections, CSHB 84 was adopted as a working draft. Number 661 REP. TOOHEY made a motion to adopt the amendment. Number 662 CHAIR BUNDE noted Rep. Olberg's objection that was made earlier and asked for further discussion. Number 666 REP. OLBERG stated that "this is micro-management at its worst... assuming that tenure review committees are a good idea and I don't think they are. We harp about local control and municipalities having options and then we tell people how to run their school districts. I think it's inappropriate and I'm tired of it. I'm tired of the entire process." Number 681 CHAIR BUNDE called for the vote. Rep. Cynthia Toohey Yea Rep. Con Bunde Yea Rep. Gary Davis Yea Rep. Al Vezey Yea Rep. Pete Kott Nay Rep. Harley Olberg Nay Rep. Bettye Davis Yea Rep. Irene Nicholia Yea Rep. Tom Brice Excused Number 706 CHAIR BUNDE stated that the amendment for CSHB 84 was adopted. Number 712 REP. B. DAVIS asked what Chair Bunde's intent for the bill was. She further stated that she did not want it to pass out of committee because she felt there was opportunity for more work to be done on the bill. Number 725 CHAIR BUNDE stated that it was his intention to move the bill out of committee and asked if Rep. B. Davis would be able to craft an amendment at that time. Number 728 REP. B. DAVIS passed out copies of her amendment and said that her version would eliminate tenure review committees. She said that she has done research to obtain information from other school districts in the country that have tenure review committees as proposed in CSHB 84 and found none. She felt more time was needed to consider the proposal and for the school districts to have an opportunity to respond to the proposed legislation. She said that in conversations she has had with local school districts they indicated their disapproval of the tenure process, citing that it was cumbersome. Rep. B. Davis felt that teachers who were having problems should be allowed to teach into the third year and have evaluations again that year. TAPE 94-16, SIDE B Number 000 REP. B. DAVIS she felt that the school board should determine if the teacher should be tenured. She ask for comments on her proposed amendment and reiterated her desire that CSHB 84 not move out of committee. Number 024 CHAIR BUNDE said, "I see a major... two major premise changes. Of course, one eliminating the peer review part and that's an area where we as reasonable people will disagree." There was also a proposed change in the two year tenure process. He felt that the outcome of the proposed amendment would be very similar to the tenure system as it stands currently and from the information he has received from parents, PTA and school boards, that system is not working. He reminded the committee that HB 84 was addressed last session, a HESS Committee meeting was held on it in September, and also the past two weeks have been spent reviewing it. Number 083 REP. VEZEY made a motion to pass CSHB 84 as amended. Number 087 REP. B. DAVIS stated her objection. Number 091 CHAIR BUNDE asked Rep. B. Davis to move her amendment. Number 093 REP. B. DAVIS stated that she would make a motion and that the committee could take whatever action they deemed necessary. She further stated that when the vote for moving CSHB 84 out of committee comes up, she would object. Number 107 CHAIR BUNDE stated that Rep. B. Davis has moved to adopt Amendment 1 to CSHB 84 (version X) as amended. Number 127 REP. OLBERG objected. Number 131 CHAIR BUNDE asked for a roll call to adopt the proposed amendment to CSHB 84 as amended. Rep. Pete Kott Nay Rep. Harley Olberg Nay Rep. Bettye Davis Yea Rep. Irene Nicholia Yea Rep. Tom Brice Excused Rep. Cynthia Toohey Nay Rep. Con Bunde Nay Rep. Gary Davis Nay Rep. Al Vezey Nay CHAIR BUNDE, with two yea votes and six nay votes, stated that the amendment failed. Number 171 REP. VEZEY made a motion to move CSHB 84 as amended out of committee with individual recommendations. Number 178 REP. B. DAVIS objected. She felt that not only had there been a subcommittee meeting on the bill that many people were not made aware of, but also the information made available to her in days prior indicated that the meeting was going to facilitate further discussion on CSHB 84, not to pass it out of committee. She said, "I believe that my rights have been violated." She stated that she is a reasonable person and tries to work with everyone. She then said, "for you (Chair Bunde) to make the comment that reasonable people want to have a review committee, as if I am unreasonable, is unconscionable. And, I reject it, and I resent it." Number 222 CHAIR BUNDE stated that it was not his intention to indicate that Rep. Bettye Davis was unreasonable and stated for the record that Rep. Bettye Davis has been a "helpful and reasonable member of this committee." He also asserted that he felt he had not rushed the legislation through the committee and that the CS as amended would better suit his intentions. Number 267 REP. B. DAVIS contended that she has had nothing on file from her public opinion messages or any telephone calls that indicated support for the concepts outlined in CSHB 84. She said that it would be helpful to her if Chair Bunde could provide her with any information that would indicate differently. She felt that the CS was not the majority desire of the people. Number 304 CHAIR BUNDE said that he would be happy to discuss the issue personally at a later time. Number 309 REP. OLBERG said that he heard Chair Bunde state "that there was room for reasonable people to disagree, meaning you (Rep. B. Davis and Chair Bunde) as two reasonable people are disagreeing." Number 325 REP. NICHOLIA asked if there was a new fiscal note for CSHB 84. Number 328 CHAIR BUNDE stated that the fiscal note would be $4000 and would need to be adopted with the CS. Number 344 REP. B. DAVIS asked what the $4000 was for. Number 334 CHAIR BUNDE referred to Sheila Peterson for that answer. Number 340 SHEILA PETERSON, Special Assistant to Commissioner Covey, Department of Education (DOE), responded by saying that the $4000 would promulgate regulations to implement the legislation. It would introduce regulations for the tenure reform, as well as the fund for school improvement allocating $2000 for each. Number 359 CHAIR BUNDE asked for further discussion. Being none, Chair Bunde indicated the previous motion made by Rep. Vezey to move CSHB 84 out of committee with individual recommendations, and there was a subsequent objection. He asked for a roll call. Number 373 REP. NICHOLIA asked if the committee would receive a copy of the fiscal note before CSHB 84 is moved out of committee, or if the legislation would be moved without the new fiscal note attached. Number 377 CHAIR BUNDE stated that CSHB 84 would be moved without a copy of the fiscal note and that it would be attached before it moves to the next committee of referral. He asked again for roll to be taken. Rep. Con Bunde Yea Rep. Gary Davis Yea Rep. Al Vezey Yea Rep. Pete Kott Nay Rep. Harley Olberg Yea Rep. Bettye Davis Nay Rep. Irene Nicholia Nay Rep. Tom Brice Excused Rep. Cynthia Toohey Yea CHAIR BUNDE, with five yea votes and three nay votes, stated that CSHB 84 as amended was so moved. Number 413 CHAIR BUNDE brought HB 409 to the table. HB 409 - AFDC DEMO PROJECT AND DECREASE CHAIR BUNDE turned the gavel over to Rep. Toohey to chair the remainder of the meeting. Number 421 CHAIR TOOHEY stated that Rep. Mark Hanley would be testifying as prime sponsor of HB 409, and that sites in Fairbanks and Anchorage would be participating by teleconference and indicated there were no witnesses in Juneau. Number 447 REP. MARK HANLEY, Prime Sponsor of HB 409, stated that he introduced the bill and was willing to look to all suggestions pertaining to areas of demonstration and implementation. He said the intent of the proposal was to "look at ways to reform our welfare system." He felt the best way to reduce welfare costs was to reduce the amount of people receiving assistance as opposed to reducing payments made to recipients. He stressed the need for a systematic change that would decrease the number of recipients. REP. HANLEY explained that a program would be created to allow people to work or perform community service to continue to receive benefits. He felt that people who are working are more likely to obtain a full time job. He cited benefits for the recipient as being an increase in income disregards and an increase in the amount of assets allowed. Also as incentive to continue working, the recipient would be allowed to keep one-third of earnings for two years as opposed to current law which allows the recipient to retain one-third for four months and then after that period no more than $30. He also mentioned that state payments would be lower. REP. HANLEY asserted that HB 409 is a demonstration project. A control group and a comparison group would be created and the state would do the research for the federal government. He mentioned that the Clinton Administration was in the process of researching the demonstration projects throughout the U.S. and there were several states that have implemented such projects. He expressed interest in the results of their demonstration projects. Number 586 CHAIR TOOHEY recommended that there be open communication to keep people aware of the workgroup times. She then stated there would be a subcommittee meeting the following day, February 12, at 1:00 p.m. to further discuss HB 409. Number 512 REP. G. DAVIS asked if there were specific geographic sites chosen to participate in the control group, citing the Kenai Peninsula as one that had been mentioned previously. Number 628 REP. HANLEY replied that the areas suggested by the Department of Health and Social Services (DHSS) were Anchorage, Mat-Su, and a rural community. He said it was not his intent to force the project on a rural community. He did mention that the areas could be changed. Number 560 REP. BUNDE asked if there was a general time frame for the implementation of the concepts contained in HB 409. Number 578 REP. HANLEY asserted that he wanted legislation passed this year. He also said he wanted to incorporate any feasible amendments and also some new ideas he had just been made aware of. Number 594 REP. VEZEY asked Rep. Hanley for an overview of the fiscal note. Number 700 REP. HANLEY said that contained in HB 409 was a ratable reduction. He said there was an initial cost to the program because of administrative costs and the requirements for providing transportation for childcare. He further stated that there were costs for monitoring the control and test groups. He said his intent was not to introduce legislation that would cost money, and he wanted to provide a way to pay for it. REP. HANLEY referred to the net expenditures in the general fund displayed in the fiscal note. In comparison to the fiscal years 1996 and 1997, he indicated a decrease in expenditures for the last year due to the projected reduction of recipients of Aid to Families with Dependent Children (AFDC) payments. Number 751 REP. VEZEY asked if there would be no impact on AFDC payments in fiscal year (FY) 95. He stated that there were one dollar differences in several categories and wondered if the decrease was due to inflationary growth of the program. Number 772 REP. HANLEY asked Jan Hansen if the rate of reduction was included in the fiscal note. Number 773 JAN HANSEN, Director, Division of Public Assistance, Department of Health and Social Services, replied that the rate of reduction was included in the fiscal note. She said the cost of the project was on the top of the chart, indicating $451,200, and the bottom of the chart displayed the net savings from the ratable reduction. She indicated that, in fact, there was a net savings to the state in general funds for the first year. She said the savings was the result of the ratable reduction generating a reduction of $829,500 and the cost for the first year would be $451,200, indicating a net gain in the general fund. MS. HANSEN stated there are no savings for the project in the first year because of the time it would take for a waiver to be developed, for its approval, and for the computer programming involved for a project of such magnitude. Number 814 REP. VEZEY said that he misunderstood and said, "I thought we were changing 47.25.320 to where the maximum that a person could receive for a dependent child, living with a non-needy relative, was $451 as opposed to $452." Number 822 MS. HANSEN agreed with those figures and said that was why the savings in the first year was actually the total savings from the ratable reduction, indicated as $829,500. She said the administrative cost of the project was $451,200 and she estimated the savings to the state at approximately $375,000. Number 838 REP. VEZEY asked if the reduction of federal receipts would in reality cause a positive fiscal note. Number 841 MS. HANSEN stated that "because AFDC is both a federal and a state program, the $829,500 represents the state's share of the AFDC. In a ratable reduction, when we reduce it, we would save state GF (general fund) and we wouldn't be spending federal. And so, the savings here is by ratable reduction, if we don't even consider the project... there would be a savings of state general fund from both AFDC and adult public assistance combined." She said that the figures were derived from fiscal notes #7 and #8. MS. HANSEN stated that in fiscal note #7, under the FY 95 column, the ratable reduction would reduce AFDC expenditures by $1,160,000. He said the reduction represents $526,600 federal, $526,700 general fund, and $106,700 in permanent fund dividend. She further stated that anytime the payments to AFDC are reduced, the federal receipts, general fund and permanent fund are reduced also. Number 860 MS. HANSEN said the remaining figure of $829,500 is derived from fiscal note #8, which is the state general fund share of the adult public assistance ratable reduction. She said, "it's not half and half on the sheet, federal, because adult public assistance is 100% GF, so there isn't any federal. So, when we add the GF reduction to adult public assistance from this ratable, it is 302.8 ($302,800). When you add that to the 526 ($526,00) that's the 829 ($829,00) general fund savings." Number 908 REP. VEZEY asked, if the hold harmless clause was to be repealed, would it then not be applicable to the fiscal note? Number 919 MS. HANSEN stated that if the permanent fund hold harmless was repealed, the general fund cost would increase, not the general fund savings because it is paid out of the permanent fund itself, and one-twelfth of the AFDC budget comes out of permanent fund hold harmless. Number 939 REP. VEZEY said there are no bottom lines in any of the columns. Number 943 MS. HANSEN agreed and said that a bottom line could be put on the chart for each year and the total project. Number 951 REP. VEZEY said it was unusual for the annual operating costs to decrease as indicated in FY 99. Number 957 MS. HANSEN stated that entitlement has been mixed with operating costs. She said the savings in FY 99 indicate the reduction of AFDC recipients. REP. VEZEY said that was opposed to the program not being in place. MS. HANSEN agreed. Number 968 REP. VEZEY said that figure would total $3 million in FY 99, while the program is increasing at $40 or $50 million a year. Number 972 MS. HANSEN said that she was not implying that the AFDC program overall would have a lower budget in FY 99 than it has today, but the savings would be generated over and above what the estimated cost would be if there was no project. She further stated that the program would continue to cost more because increased case loads are projected. Number 988 CHAIR TOOHEY asked how many people would be in the program and if during the project would there be people dropping out and people being added on. Number 995 REP. HANLEY replied that the boundaries of the project will determine the amount of people participating. Number 005 MS. HANSEN said Anchorage and Mat-Su were two test areas that case load sizes and cost estimates were based on for the fiscal notes. She said that approximately 1000 people would go into work while still on AFDC, explaining that the jobs available to the recipients do not provide enough income to support a family above the poverty level. She further stated that 1000 families would be working while receiving reduced AFDC payments because of their earnings. The number of families leaving the project would be low because the jobs available would not support their families above the poverty level. Number 037 REP. VEZEY said that the mindset is that the average person receives public assistance for approximately two years and indicated that the demonstration project is projecting over five years. He asked Ms. Hansen to address that discrepancy. Number 046 MS. HANSEN replied that in actuality it is not the same 1000 people. She said in FY 96 there would be an additional 571 clients working who currently are not working. In Fy 97, it is projected as an additional 977 clients working. Number 072 REP. VEZEY stated that as he understood the response, the figure 1000 indicated additional people that would go beyond the "normal rotation." Number 078 MS. HANSEN agreed and said that currently 850 households in the Anchorage and Mat-Su areas have earnings. In addition to the 850, it is projected that there will be another 571 households within the demonstration project with earnings. Number 090 REP. VEZEY asked what the amount of monthly checks would be. Number 107 MS. HANSEN answered that she was not sure of the volume in terms of the ratable reduction. She said that currently there were 12,600 families on AFDC. Number 113 REP. VEZEY said that was "about 150,000 family weeks a year... which works out to be about ten bucks a family month." REP. HANLEY agreed and said that $11 is listed on the chart. CHAIR TOOHEY asked for teleconference testimony. Number 125 PUDGE KLEINKAUF, Concerned Citizen, testified on HB 409. She reminded the committee that last session AFDC payments were cut and at the same time the state passed the largest capital construction bill in the history of the state. She said that HB 409 would continue to penalize the 25,000 children receiving AFDC by giving them a ratable reduction for the second year in a row. TAPE 94-17, SIDE A Number 000 MS. KLEINKAUF stated that Section 3 would reduce benefits for adult public assistance by 1.7% above last years cut. She felt that the committee and state did not realize that with the proposed legislation the poor families and children would be paying for the demonstration project. MS. KLEINKAUF said that waivers cost money and that the state should not penalize public assistance recipients in order to pay the cost of waivers needed for the project. She cautioned the committee that there could be constitutional problems raised by the use of waivers that would treat AFDC children differently than other groups. She reminded the committee of the already established JOBS program, and that the program could be used to implement some of the concepts in HB 409. MS. KLEINKAUF said that the state should offer tax incentives to businesses to hire welfare recipients, therefore eliminating them from welfare rolls. Number 390 REP. BUNDE inquired as to whether Alaska has the highest welfare payments in the nation, and if the ratable reduction took place, would they still be the highest payments. He also asked if Alaska's cost of living was still considerably higher than the rest of the nation. Number 431 REP. HANLEY said Alaska does have the highest payments and there was a 25% adjustable factor in both AFDC and adult public assistance. In regards to Ms. Kleinkauf's statements, he believed there would be no constitutional problems. He said the JOBS training program focuses on people who are least likely to obtain work and therefore are trained extensively. MS. HANSEN felt that by doing the demonstration project, there would be more support for it in the long run. Number 537 MS. KLEINKAUF stated that most people are strongly in support of Section 5 that allows for waivers, and the problem area was in Section 6 with the workfare concept. She felt that DHSS should take some responsibility in hiring welfare recipients off the rolls. She also explained that women would be better able to get off the rolls if the state was more strict with child support payments. Number 607 CHAIR TOOHEY asked for further teleconference testimony. There was none. Number 648 REP. VEZEY asked what the methodology to the monthly payments pertaining to dependent children living with a non- needy relative. Number 669 MS. HANSEN answered that the department was asked to come up with a figure that would equate to the cost of the project in the most expensive year, which was a 1.7% ratable reduction. Number 728 REP. B. DAVIS stated that she was supportive of waivers. She said, with all the work that needs to be done, it would be impossible to implement the statute within FY 95. She conveyed her opposition to what she felt was asking the poorest of Alaskans to pay for the project through ratable reductions. She stressed the enforcement of child support payments to alleviate the welfare rolls. She felt that job availability was more important than job training. Number 820 MS. HANSEN thanked Rep. Hanley for taking the initiative with the proposed legislation. She reminded the committee that the waiver would allow for a demonstration project, which means that not everyone can be a part of the control group. She referred to Governor Hickel's position paper on welfare reform and said that the position paper cited factors, that are in the demonstration waiver, as areas that need to be changed federally so that the state can also change them. Number 893 CHAIR TOOHEY asked for further testimony or questions. There were none. Seeing no further business before the committee, CHAIR TOOHEY ADJOURNED the meeting at 4:55 p.m.