Legislature(1995 - 1996)
03/14/1995 02:08 PM House HES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
March 14, 1995
2:08 p.m.
MEMBERS PRESENT
Representative Cynthia Toohey, Co-Chair
Representative Con Bunde, Co-Chair
Representative Al Vezey
Representative Gary Davis
Representative Norman Rokeberg
Representative Caren Robinson
Representative Tom Brice
MEMBERS ABSENT
None
COMMITTEE CALENDAR
* HB 230: "An Act making appropriations to the Department of
Education for support of kindergarten, primary, and
secondary education and for community schools programs
for fiscal year 1996 and fiscal year 1997; making
appropriations from the constitutional budget reserve
fund under art. IX, sec. 17(c), Constitution of the
State of Alaska; and providing for an effective date."
HEARD AND HELD
* HB 228: "An Act reducing payment levels for the program of aid
to families with dependent children and the adult
public assistance program."
HEARD AND HELD
(* First public hearing)
WITNESS REGISTER
REPRESENTATIVE MARK HANLEY
Alaska State Legislature
Room 507, State Capitol
Juneau, AK 99801
Telephone: (907) 465-4939
POSITION STATEMENT: Testified in favor of HB 230.
DICK SWARNER, Executive Director of Business Management
Kenai Peninsula Borough School District
148 N. Binkley
Soldotna, AK 99669
Telephone: (907) 262-5846
POSITION STATEMENT: Testified against HB 230 via teleconference.
ROBERT DOYLE, Finance Director
Matanuska-Susitna Borough School District
1900 Porcupine Trail
Wasilla, AK 99654
Telephone: (907) 376-3172
POSITION STATEMENT: Testified against HB 230 via teleconference.
ALICE WALSH, PTA President
Cottonwood Creek Elementary School
5240 Shenum Drive
Wasilla, AK 99654
Telephone: (907) 376-6719
POSITION STATEMENT: Testified against HB 230.
PAM McCAUL, Parent, PTA President, former PTA Vice-president
High School Varsity Coach
361 Gastman
Wasilla, AK 9964
Telephone: (907) 376-3550
POSITION STATEMENT: Testified against HB 230.
MELINDA BROOKS, Member
Matanuska-Susitna Budget Committee
P.O. Box 873796
Wasilla, AK 99687
Telephone: (907) 376-3860
POSITION STATEMENT: Testified against HB 230.
CAROL KANE, Educator
1000 Woodcrest Circle
Wasilla, AK 99654
Telephone: (907) 376-2467
POSITION STATEMENT: Testified against HB 230.
LARRY HEALY, Educator
Matanuska-Susitna School District
1320 Ivy Circle
Wasilla, AK 99654
Telephone: (907) 373-0165
POSITION STATEMENT: Testified against HB 230.
LINDA STOLL, Parent
P.O. Box 875555
Wasilla, AK 99687
Telephone: (907) 746-5555
POSITION STATEMENT: Testified against HB 230.
KEITH EVANS, Superintendent
Dillingham City Schools
P.O. Box 170
Dillingham, AK 99576
Telephone: (907) 842-5223
POSITION STATEMENT: Testified against HB 230.
BRUCE BACHEN, President
Sitka School Board
713 Sirstad St.
Sitka, AK 99835
Telephone: (907) 747-6850
POSITION STATEMENT: Testified against HB 230.
CAROL MEARS, Legislative Chair
Fairbanks District Council PTA
P.O. Box 9
Fairbanks, AK 99725
Telephone: (907) 479-3247
POSITION STATEMENT: Testified against HB 230.
JOHN TONGEN, President
Alaska Association of School Business Officials
P.O. Box 1896
Valdez, AK 99686
Telephone: (907) 835-4924
POSITION STATEMENT: Testified against HB 230.
LELAND DISHMAN, Superintendent
Yupiit School District
P.O. Box 100
Akiachak, AK 99551
Telephone: (907) 825-4428
POSITION STATEMENT: Testified against HB 230.
GARY CHRISTENSEN, Director of Business Affairs
North Slope School District
P.O. Box 169
Barrow, AK 99723
Telephone: (907) 852-5311
POSITION STATEMENT: Testified against HB 230.
BOB VAN SLYKE, Superintendent
Juneau School District
10014 Crazy Horse Drive
Juneau, AK 99801
Telephone: (907) 463-1700
POSITION STATEMENT: Testified against HB 230.
JIM NORDLUND, Director
Division of Public Assistance
Department of Health and Social Services
350 Main Street, Suite 309
Juneau, AK 99801
Telephone: (907) 465-3347
POSITION STATEMENT: Testified against HB 228.
ANGIE SALERNO, Executive Director
National Association of Social Workers, Alaska Chapter
1727 Wickersham Drive
Anchorage, AK 99507
Telephone: (907) 563-4502
POSITION STATEMENT: Testified against HB 228.
CURTIS LOMAS, Program Officer
Welfare Reform Program, Div. of Public Assistance
Department of Health and Social Services
350 Main Street, Room 317
Juneau, AK 99801
Telephone: (907) 465-3347
POSITION STATEMENT: Testified against HB 228.
PREVIOUS ACTION
BILL: HB 230
SHORT TITLE: APPROP: FY 96 & FY 97 EDUCATION PROGRAMS
SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES
JRN-DATE JRN-PG ACTION
03/03/95 566 (H) READ THE FIRST TIME - REFERRAL(S)
03/03/95 566 (H) HES, FINANCE
03/14/95 (H) HES AT 02:00 PM CAPITOL 106
BILL: HB 228
SHORT TITLE: REDUCTION IN PUBLIC ASSISTANCE PAYMENTS
SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES
JRN-DATE JRN-PG ACTION
03/03/95 565 (H) READ THE FIRST TIME - REFERRAL(S)
03/03/95 565 (H) HES, FINANCE
03/14/95 (H) HES AT 02:00 PM CAPITOL 106
ACTION NARRATIVE
TAPE 95-19, SIDE A
Number 000
CO-CHAIR CON BUNDE called the meeting of the House Health,
Education and Social Services standing committee to order at 2:08
p.m. Present at the call to order were Representatives Bunde,
Toohey, Robinson, Brice, and Vezey. He announced that a quorum was
present, read the calendar, and stated that the meeting was on
teleconference. He asked that testimony be limited to two minutes
due to the large number of sites on teleconference.
HHES - 03/14/95
HB 230 - APPROP: FY 96 & FY 97 EDUCATION PROGRAMS
Number 080
REPRESENTATIVE MARK HANLEY said one of the reasons he is testifying
in favor of a bill sponsored by the HESS committee is because this
bill fits into Representative Hanley's overall plan submitted
earlier. He asked if HESS Committee members had a copy of the
press release that was distributed. This press release explains
that 75 percent of the spending in the state's budget occurs in
three areas: Education, health and social services, and employee
salaries and benefits.
Number 113
REPRESENTATIVE HANLEY said trying to make significant reductions to
the budget while not touching 75 percent of the budget makes it
very difficult to significantly reduce the budget. The state is
trying to close the $500 million fiscal gap, which is one of the
major problems Representative Hanley perceives the state is
presently facing.
REPRESENTATIVE HANLEY said a bill was discussed that would flat-
fund education as part of an attempt to help school districts plan
for their budgets. This bill addresses two concurrent years, to
fund both this year and next year. Basically, Section 1 of the
bill is the same as Section 2. Section 1 goes into effect for
fiscal year (FY) 1996, and Section 2 takes effect for FY 97.
Number 174
REPRESENTATIVE HANLEY asked HESS Committee members to notice that
dollar amounts are essentially the same as in the current year's
budget. Single-site schools are included as they were for the
current year. Therefore, the same dollar amount will be flowing
through the formula. This is not to say that everyone will get the
same dollar amount. This is because as students increase, the
formula readjusts the allocations within the foundation formula.
Therefore, school districts will receive varying amounts of money.
REPRESENTATIVE HANLEY explained that if all schools had the exact
same number of students in the school district, they would all get
the same dollar amount. However, some will have more, and some
will have less. That will change the allocations. The money is
out of the constitutional budget reserve, largely because two year
funding cannot totally be paid for out of the general fund.
REPRESENTATIVE HANLEY said some people are concerned about flat-
funding. Essentially, with projected increases in next year's
budget, this may mean about a $60,000 instructional unit. That is
about accurate with projections concerning increased student
numbers.
Number 257
REPRESENTATIVE HANLEY said this is a base-level funding, and
districts do have an ability to plan. This is important. He
suggested that, if the price of oil drops $3.00 per barrel, people
may want to consider this as a base-level of funding. If the price
of oil drops, legislators next year may be back and they would not
be suggesting flat funding. They would be forced to consider
reductions in budgets. Right now, however, the dollars per barrel
prices are relatively stable.
REPRESENTATIVE HANLEY suspects there will be more money available
in the future, for those people who want to add more money to the
budget. There will be opportunities in the future. Whether
suggestions to add money are adopted or not is an option. This
bill does at least give all districts what Representative Hanley
feels is a base level. They can plan for two years. It will not
be easy, but closing the fiscal gap is not going to be easy on
anyone.
REPRESENTATIVE HANLEY said as budget caps are released, there are
going to be a lot of other programs around the state experiencing
reductions. There will also be many other people who are concerned
about their budgets. However, Representative Hanley would like to
remind everyone that the state is facing a $550 million deficit.
If anyone has suggestions as to how the state can reach its goal of
$70 million below last year and still increase funding, whether
this is in education or any other area, Representative Hanley is
more than willing to listen.
REPRESENTATIVE HANLEY said full finance will also be reallocating
money within the different budgets if it is appropriate. This bill
is part of the plan, and it is important that this issue be moved
forward and discussion is initiated. Representative Hanley had to
go back to the Finance Committee meeting, however, he would try to
return to the HESS Committee meeting later.
Number 380
CO-CHAIR BUNDE said Representative Hanley is the Co-Chair of the
Finance Committee. He was asked to speak before the HESS Committee
because the Finance Committee is assisting in the coming year's
budget construction. He has access to all the factors that impact
the state's budget and the education budget.
CO-CHAIR BUNDE announced that he did not plan to move HB 230 out of
committee today. Public testimony is being taken, and HB 230 will
be addressed again in the future.
CO-CHAIR BUNDE announced that Representative Rokeberg and
Representative Davis arrived at the meeting at 2:12 p.m.
Number 484
DICK SWARNER, Executive Director of Business Management, Kenai
Peninsula Borough School District (KPBSD), testified via
teleconference that the KPBSD is opposed to HB 230. The district,
over the years, has experienced growth. The district also
continues to grow. This bill would be detrimental to a district
such as his that is growing so fast.
MR. SWARNER asked to share some facts with the committee. The
KPBSD appreciates and understands the state's finance problems.
The district believes education should share the responsibility of
trying to bring the state budget into balance. However, HB 230
goes too far in that the bill asks the KPBSD to absorb inflation
and an increased number of students. The district has been doing
that for a number of years, and things are getting difficult "in
the trenches."
MR. SWARNER said over the last ten years, the district's total
budget has gone up 29.8 percent. Enrollment has increased 28
percent. Cost per pupil, over a ten-year period, has only
increased 1.44 percent.
Number 612
MR. SWARNER said the Consumer Price Index (CPI) in Anchorage has
increased 35.5 percent. The local taxes in Mr. Swarner's district
have increased 48.1 percent, and the state foundation funding has
only increased 24.3 percent. Mr. Swarner said education is one of
the basic services mandated by the state Constitution. The
legislature needs to trim things back, and it is going to have to
do what has been done in the school districts--it must prioritize
services.
MR. SWARNER thought the optional state programs need to be
eliminated before basic services are eliminated. That is the
situation the state is getting into now. In order for the KPBSD to
balance its budget for the current year, it is looking into making
reductions. They must try to do the same things this year with
$2.3 million less for next year. That number figures in the
increased number of pupils without absorbing that cost.
Number 703
CO-CHAIR BUNDE reiterated the state is facing a $500 million
challenge. Mr. Swarner had said the state should eliminate some
options. Co-Chair Bunde asked if there were options in the schools
that could be eliminated, such as the athletic program or band. He
also asked what other options should be eliminated from the state
budget before education is addressed.
MR. SWARNER said since he is in education, he follows politics to
a certain degree. Everybody says they are fed up with the federal
government. But there are a lot of things in the district's budget
that are mandated. To date, Mr. Swarner has not seen any change in
those mandates. Districts are mandated with Occupational Health
and Safety Administration (OSHA) laws, special education laws, sex
equity training, alcohol training, Environmental Protection Agency
(EPA) rules and Department of Environmental Conservation (DEC)
rules.
Number 781
MR. SWARNER said none of these mandates are going away. Still, the
legislature is asking the districts to run their budgets with less
money and still contend with the mandates. Mr. Swarner said some
of the mandates need to disappear to give the districts the
latitude to operate in a more efficient manner.
CO-CHAIR BUNDE hoped the legislature has the option of addressing
the unfunded federal mandates. Of course, those items must be
addressed in an arena other than the HESS Committee. However, Co-
Chair Bunde shares this goal with Mr. Swarner.
Number 820
REPRESENTATIVE GARY DAVIS asked about the proposed extra foundation
units for the Kenai School District. He asked how many additional
units were being anticipated.
MR. SWARNER said that 20 additional units are being anticipated.
CO-CHAIR BUNDE asked if that meant 20 additional classrooms, and
Mr. Swarner answered when all the numbers are worked through the
formula and special education, bilingual assistance and other
mandates are included, as well as the increased enrollment, there
are 20 additional instructional units over the current year's
figure.
Number 892
ROBERT DOYLE, Finance Director, Matanuska-Susitna (Mat-Su) Borough
School District, supported all Mr. Swarner's comments and concerns
with HB 230. Mr. Doyle explained there is a projected increase in
student enrollment next year for his district as well. Currently,
enrollment was 11,880. Last year, enrollment was 11,300, and next
year, projected enrollment is 12,378. In two years, that is an
increase of 1,000 children.
MR. DOYLE said the total budget this year did not increase from
last year. The district held the line and tried to work more
efficiently with a lot less money. It is unfair to ask the
district to do that again with 500 more children. There are 500
total classrooms in the district. If the enrollment increase
cannot be funded, the net effect would be the increase in every
class size by one. That costs a little over $1 million.
Number 965
MR. DOYLE said the cumulative effects need to be carefully weighed
by the state. There are federal cuts being discussed, and there
are local tax concerns. The cumulative effects between the cuts on
the local level, the state level and the federal level can impact
the children in many ways.
MR. DOYLE said 80 percent of his district's budget is tied up in
personnel. The district has already gone to self-insurance
programs, and has considered, but not passed many other significant
reforms. The district is trying to do things more efficiently to
same money. The district is cutting things that are not directly
in the classroom and that do not affect the children.
Number 1000
MR. DOYLE said that the efficient use of existing budgets can be
jeopardized by unfunded mandates. Mr. Doyle said he is not new to
the state of Alaska. He moved to Alaska in 1968 and graduated from
East Anchorage High School. At that time there was no oil money in
the state, and many of the school programs that may be faced with
cuts, such as band and athletics, were in place. Class size was
significantly smaller and many school programs were offered.
MR. DOYLE said today, students who travel for extracurricular
activities must sleep on gym floors, travel by bus and bring their
own meals. When Mr. Doyle attended school, students flew on
planes, stayed on hotels and ate meals paid for by the school. Mr.
Doyle again reminded HESS Committee members that there was no oil
revenue money then.
MR. DOYLE said he is concerned that legislators are only looking at
the expenditure side of the budget, and they are not studying
revenue generation. If cuts have to be made, they should be made
equitably across all districts. However, for Mr. Doyle's district,
the cut on the foundation unit would amount to about $1.2 million.
There is also going to be a $250,000 cut on the district's
transportation budget. Mr. Doyle is not exactly sure how the
nutritional services budget is going to be perceived.
Number 1070
MR. DOYLE said when those are added all up with the contemplated
cuts at the local level, schools are not going to be the same next
year.
CO-CHAIR BUNDE shared Mr. Doyle's frustration, and he knows that
both Kenai-Soldotna and the Matanuska-Susitna Borough School
Districts have been doing an extraordinary job of stretching
dollars and running efficient programs. However, as Mr. Doyle
pointed out, when funding is reduced it must be spread across the
board in an equitable fashion. It seems ironic that some of the
more efficient districts are asked to do more with less, however,
the legislature cannot hold certain groups harmless.
CO-CHAIR BUNDE said he was in Anchorage in 1968 as well. He worked
for the school system and remembers that there were only 150,000
people in Anchorage at that time. That probably made a significant
difference. In addition, Alaskans paid an income tax at that time.
Co-Chair Bunde still thought it was a pretty good place to live.
Number 1138
REPRESENTATIVE NORMAN ROKEBERG recalled that Mr. Doyle's district
spends 80 percent of its budget on personnel.
MR. DOYLE said 82 percent includes all salaries and benefits. The
district is totally self-insured, it does not buy health insurance.
The district spends about $4,500 per employee to guarantee all
their health insurance coverage. Mr. Doyle offered to mail the
HESS Committee members a budget package. This would include all
the facts and figures reviewed by their Citizen's Advisory
Committee.
REPRESENTATIVE ROKEBERG explained the reason he asked is because he
has heard many different figures. He has heard that Anchorage
spends about 87 percent on personnel, and that other districts in
the state spend upwards of 90 percent. He commended Mr. Doyle's
district for its efficiency.
CO-CHAIR BUNDE thanked Mr. Doyle and asked him to please send the
district's budget information. Co-Chair Bunde also announced that
more sites were now on teleconference.
Number 1208
ALICE WALSH, PTA president, Cottonwood Creek Elementary School,
testified via teleconference. She read a statement prepared by
Marie Burton, principal of Cottonwood Creek Elementary School:
"The Matanuksa-Susitna Community cannot afford a reduction in
funding in our schools. It would directly reflect on the
quality of education that our children receive. Many of our
students need to be served with fewer resources in an already
dangerously overcrowded system. HB 230 is an irresponsible
and inconveniently timed action. If the framers of this bill
were truly dedicated to serving the community they represent,
they should have sought appropriate input from the citizens of
the communities that HB 230 directly reflects on.
"A reduction in our funds for our schools will be an obstacle
that this economically limited community cannot endure. Our
schools struggle not only with providing a quality education
with already limited funds, but also with the violent and
destructive social problems of our community as well.
"In addition, I find it very disturbing that when the four
biggest school districts are on spring break, the opportunity
is taken to sidestep the very people you represent."
Number 1279
CO-CHAIR BUNDE asked Ms. Walsh to pass the message onto the
principal that the timing of this hearing had nothing to do with
spring break. The legislative process simply allowed for the bill
to be heard at this time. Co-Chair Bunde then addressed the idea
that the HESS Committee members have not consulted the people most
directly affected by HB 230. For the past three years, all
committee members have been hearing from people throughout the
state, "Cut the budget, get the spending in line."
CO-CHAIR BUNDE said 65 percent of the people in this state do not
have children in school. Those people have a right to be heard
also.
Number 1304
PAM McCAUL, parent, PTA president and former vice-president, high
school varsity coach, testified via teleconference that her varsity
team is totally unfunded by anyone other than their own resources.
They have no support from the school, other than the principal and
vice-principal who stand behind the team. She read a prepared
statement:
"As a parent volunteer putting in at least 25 hours a week and
an untold amount of my own pocket money, I work as a PTA
president and vice-president, and I am here to tell the makers
of HB 230 they have gone too far. To ignore everyone that
this cut reflects on is underhanded and under the table. It is
truly falling (indisc.).
"As a group you decided that you deserved a raise of $150 to
$200 per day in per diem. Now you cut school children $200 a
year. How do you justify this? I see it this way: Every day
a school child gets to fund a legislator for a day. I, as an
adult taxpayer, find that reprehensible. If this is how
Juneau is going to represent the school children of Alaska,
their future, and spend my tax dollars, we need to make some
drastic changes.
Obviously, your priorities do not lie in educating the future
or in operating above the board. It lies in your own pocket,
and obviously the 65 percent who do not have children in
school. Take a good close look at HB 230, it will come back
to haunt you all. Your yes votes will be noted. I will
follow this closely and I will bring it up publicly whenever
I am given an opportunity. Thank you."
Number 1385
CO-CHAIR BUNDE observed that he did not think her perceptions match
his own or are necessarily accurate. He felt this was true
particularly in reference to Ms. McCaul's tax dollars. Co-Chair
Bunde did not think the average citizen pays much in state taxes in
this state.
Number 1401
MELINDA BROOKS, Mat-Su District Budget Committee member, testified
via teleconference. She did not know how the district can afford
this kind of cut. They are already in terrible, terrible financial
difficulty. She agrees with Co-Chair Bunde that Alaska residents
do not pay enough taxes. She thinks it is about time that is
changed.
CO-CHAIR BUNDE does not think that cuts can be absorbed without
harm. He agrees with most people who testify on that.
Number 1455
CAROL KANE, taxpayer, property owner, educator and Alaska resident
testified via teleconference. She thanked HESS Committee members
for the opportunity to speak and for their efforts. She and her
husband value the quality of life in Alaska and have decided to
spend the rest of their lives here. She has had the opportunity to
have a leadership role in education through professional
organizations at the local, state and national level. She is proud
to be an Alaskan educator.
MS. KANE believes that Alaska provides exemplary educational
programs for students regardless of where they live, or their
ethnic origin. Educators today have met and will strive to meet
the challenges in the future presented by society. Ms. Kane said
teachers have accepted full responsibility to provide curricular
and co-curricular programs which will enable students to become
productive citizens of the 21st century.
Number 1497
MS. KANE added that out of necessity, and because educators are
empathetic caregivers, they provide family life support by
escalating proportions. She is alarmed to realize the current
language proposed in HB 230 would result in a reduction in the
funding level for FY 96 and FY 97.
MS. KANE said for FY 96, the current level of funding should be no
less than the currently funded level for FY 95. The education of
students in this state must not be held hostage because funding has
not been allocated to meet constitutional obligations. To allow
adequate planning and assessment, Ms. Kane proposed that the state
look at options to determine how education will be funded after the
next fiscal year and in the future.
MS. KANE said the current funding allocation, with high emphasis on
property owners, must be revisited. Because the people she
represents educate all children, it would seem equitable that a
combination of revenue resources be utilized to come up with a more
fair and appropriate funding formula.
MS. KANE said she does not believe in a free ride. In Alaska
people must pay their dues by generating new funding and
reallocating that which is already utilized in revenues.
Number 1551
MS. KANE proposed that revenue sources might include a combination
of the following based on percentage allocations for a full
education formula: A percentage from federal resources, a
percentage from an education tax to be paid by every citizen
(senior citizens exempt at 60 years), a percentage from the
permanent fund to be paid by every citizen (no exemptions for
senior citizens, and a percentage from property taxes to be paid by
all property owners (not personal property).
MS. KANE said where possible, education appropriations would go
directly to the school district and not through the borough
political structure. The state should provide a funding structure
for a two year budget appropriation for every district. This would
eliminate the annual "knee jerk" panic that encompasses the public,
educators, and legislators. The expanded two year funding
allocation would allow for better planning and an improved
educational community.
Number 1596
MS. KANE said she is willing to work with a committee to review
this funding dilemma and hopefully develop a new formula that would
result in long-term stability. Collectively, the people of the
state can provide what Alaska's children need today for tomorrow's
work force.
CO-CHAIR BUNDE thanked Ms. Kane for the constructive suggestions,
and asked if she would fax them to the HESS Committee members.
Number 1620
LARRY HEALY, Educator, Mat-Su School District, testified via
teleconference. He said his wife is also employed by the district.
Therefore, "on one hand" his opinion may slightly biased. On the
other hand, he is a taxpayer and he has been in Alaska for 18
years. He is closer to a senior citizen than he is to a middle-
aged man, and he does not have any children in school. However, he
does believe that people such as himself have an obligation to
Alaska's young for an education.
MR. HEALY said he does not mind paying his share of the property
tax, income tax, or other ways the state can raise revenue.
Number 1653
MR. HEALY asked to briefly describe the situation in Mat-Su to the
HESS Committee members. For the past four years, he has seen the
Mat-Su school district downsize the number of employees. That can
be understood in terms of the number of employees per students. As
the HESS Committee members are aware, the Mat-Su school district's
enrollment is increasing.
MR. HEALY added that the district has cut out a number of
significant education programs due to the budget plans. One
example of the cuts has been limits on maintenance programs in the
schools. Maintenance has been delayed in critical areas. The
district has reduced some of the foreign language programs, etc.
At the same time, there has been an increase in students, and the
numbers show Mat-Su is the fastest growing school district in the
state.
MR. HEALY said the district has an obligation to parents who are
bringing students to the district. On the other hand, the
district's students have an increasing number of needs. The
students today are far different than the students of years past.
Number 1707
MR. HEALY continued by saying the district needs to help its
teachers meet those needs. There are a number of approaches that
need to be studied, all of which are going to take time, effort and
money to maintain the quality of services and the quality of life
for the people in the valley.
MR. HEALY said he, like Ms. Kane, supports the mechanisms that she
described to generate revenue and deal with the budget. However,
he hopes the legislature would solve this problem, especially in
terms of the needs of the children and the society, by dealing with
it as more of a responsibility rather than a budget problem. Mr.
Healy noted, however, that he does realize there is a budget
problem.
Number 1740
REPRESENTATIVE ROKEBERG asked Mr. Healy to what the district
attributes this 4 percent to 5 percent growth in student population
in the Mat-Su Valley. He asked if there was some sort of economic
activity occurring to cause this population growth.
MR. HEALY answered that it is a mystery to many people. The Mat-Su
Valley, however, has a good reputation as a school district. In
addition, there is a four-lane highway leading to Anchorage that
has given people the ability to acquire housing at a reduced cost
in the Mat-Su valley. There is a large commuting population and
that seems to be increasing.
Number 1768
MR. HEALY said there is also a large population of slope workers in
the Mat-Su Valley. This is where the slope workers look for
housing because this is closer to the streams and wilderness they
like to visit when they are off the slope.
MR. HEALY did not know if there was any increase in industry or
business in the valley. There is an increase in tourism, and there
are probably some other areas that are growing that Mr. Healy does
not know about. He added that many small businesses are coming to
the valley. He asked Ms. Kane if she had any ideas about the
population growth.
Number 1798
MS. KANE added that in talking to local realtors and business
people she has met, she has found the quality of the Mat-Su schools
are definitely an attraction, and are a reason people are moving to
the valley. The valley provides an opportunity for people to work
in the Anchorage area and still enjoy a rural lifestyle.
MS. KANE said there is a real effort on the part of the business
community to attract businesses to come to this area, and also to
increase tourism. The valley is beautiful, and there are a lot of
dedicated people who are trying to provide services to the
community.
Number 1841
MR. HEALY said one of the areas studied in demographics is the
continual increase in low income and free/reduced lunch
applications over the past three years. The numbers have gone from
about 22 percent to 30 percent.
CO-CHAIR BUNDE encouraged the schools to poll all the new people
moving to an area and ask how many of them are interested in paying
taxes to support the school system. It would be very helpful to
the legislature. Co-Chair Bunde said the thrust of Representative
Rokeberg's comment was that the legislators have two imminent
challenges: To cut spending and to generate revenue. Resource
development is one of the ways to generate revenue. Co-Chair Bunde
said support from the community is very helpful.
MS. KANE added that during public hearings on the school district
budget, people came forward to say they are willing to pay taxes to
support the schools.
CO-CHAIR BUNDE said he would see if people who do not have children
in school have opinions on the subject.
Number 1887
REPRESENTATIVE TOM BRICE had a comment on growth in the Mat-Su. A
lot of that does have to do with renewed interest in agriculture.
LINDA STOLL, parent, testified via teleconference. She said one of
her children graduated from a Mat-Su high school last year, and
another child will graduate this year. She is very relieved they
are done with their public education. They have both been accepted
at good colleges, and thanks to the high quality of their high
school experience, they are attending college partially funded by
scholarships. These scholarships are both athletic and academic.
MS. STOLL has a daughter who is just entering high school, and she
fears that if HB 230 should pass, her daughter will not have the
same opportunities her siblings have had. She feels her daughter's
education will not be of the same high quality that her other
children were able to receive.
Number 1930
MS. STOLL added that limiting classes and limiting extracurricular
activities, which passage of this bill will encourage, will all
have the effect of limiting her daughter's future. This is an
unacceptable choice for her daughter and for all students.
MS. STOLL continued by saying that with devastating cuts planned at
the national level for many programs that deal with children, the
state's decision to further jeopardize educational opportunity
cannot be made. If budget cuts must be borne, she asked that the
cuts not be borne by the state's youngest and most vulnerable
citizens.
Number 1950
CO-CHAIR BUNDE reminded Ms. Stoll and all people on teleconference
that suggestions on programs the state can do without are very
helpful.
KEITH EVANS, Superintendent, Dillingham City Schools, testified via
teleconference. He said the school is a single-site school of
about 500 students. The school's ability to absorb a great many
cuts that seem to be coming its way is very limited. This bill
would appear to make additional cuts to the school. Mr. Evans does
not perceive that his school is going to have a big increase in
enrollment--the increase will be minor. However, certainly the
funds available to the Dillingham district will diminish due to the
effects of HB 230.
MR. EVANS strongly supported Ms. Kane's statements concerning
funding. He said his district is looking at already cutting about
$250,000 for next year's budget. The district has already looked
at the city to combine their business offices and maintenance
support in an effort to be more sufficient.
MR. EVANS said the district has been forced to not support student
activities and athletics. About $90,000 is now being raised by
local community groups and interested citizens. If the federal
government cuts the lunch program, Dillingham's program will go out
the window because it cannot absorb $29,000 in cuts.
Number 2010
MR. EVANS said his district is very concerned about existing with
the basic programs, and more cuts will be quite devastating for his
district.
CO-CHAIR BUNDE noted that HB 230 does include funding for single-
site schools. Another bill which addresses more efficient spending
has provisions for consolidating or closing some of the small
schools. Co-Chair Bunde said Mr. Evans should study that issue,
however, he does not have to comment on that subject today.
Written comment would certainly be welcome.
Number 2042
BRUCE BACHEN, President, Sitka School Board (SSB), testified via
teleconference. He said his district spends the least amount of
money per student. His district tries to do the most with the
least. He has been through about five budget cycles, and he must
tell the HESS Committee members what it is like right now compared
to the last few years.
MR. BACHEN said the SSB held a total of about 12 hours of hearings
with the public. These hearings were attended by about 150 people.
This attendance is by far the largest the SSB had ever experienced.
Mr. Bachen said there is a real sense of frustration. Cuts have
been made and people have had enough. This year, the public
demanded that the SSB produce a needs-based budget. The outcome of
that was somewhat surprising to everyone.
MR. BACHEN said the new budget showed that the SSB is about ten
percent below what it needs to be to have what people are
demanding. Some of the cost increases are coming from special
education, and this was mandated by the state. If a student needs
special education, they receive an Individual Educational Program,
and the district is obligated to pay for those services. The state
pays about 55 cents on the dollar, and the district pays the rest.
MR. BACHEN said therefore, what is going on with increasing special
education demands is that funding for other programs is being taken
away.
Number 2106
MR. BACHEN said the Sitka School District (SSD) is about $1.1
million short, and HB 230 would further exacerbate the problems of
the SSD, and decrease funding further by about $300,000. Mr.
Bachen thinks the caps need to be studied. That is another problem
coming for Sitka in terms of what the population wants to spend on
education. Mr. Bachen said the SSD is against HB 230 the way it is
currently written. He is in support of the Governor's position.
The SSD recognizes the state is growing, and he asks that funding
be kept comparable to where it has been on a per student basis.
Number 2134
CO-CHAIR BUNDE observed that the Governor's budget will cut $8
million (best case scenario) from a $500 million deficit. Co-Chair
Bunde said he does not need modern math to tell him the state would
be broke before the deficit could be addressed if that route was
taken.
Number 2149
CAROL MEARS, Legislative Chair, Fairbanks District Council PTA,
testified via teleconference. She thanked the HESS Committee
members for the chance to speak. She also said she is totally
against any cuts in the foundation formula. She continued that
Alaska's children have been feeling the pain of cuts through this
formula for years. Inflation has been putting the squeeze on the
spending power of the dollar.
MS. MEARS said, "Shame on you folks for even considering squeezing
more out of their education." Every year, there are more and more
cuts to school district operating budgets. These cuts are in
everything from administration, to teachers, to programs and
supplies. These cuts directly affect the education of Alaska's
children.
MS. MEARS said the cuts being considered would mean the equivalent
of cutting an additional 30 teachers in the Fairbanks North Star
Borough School District. Raise the Pupil-Teacher ratio (PTR) or
cut all librarians, nurses and counselors. Cut the entire
vocational education program or cut band, orchestra and general
music. These are the kinds of decisions that HB 230 would force
her school district to make.
Number 2184
MS. MEARS said the district is already having to whittle away at
these programs. The district has been very responsible in setting
class size as a priority, cutting administration where it can.
This year's proposal includes cutting an assistant superintendent,
a central office secretary, a personnel director, a principal, and
1.5 administrative interns.
MS. MEARS said administration in her district is lean and is
becoming less effective to the point that it will directly affect
the children in the classroom. On top of this, the legislators are
saying there should be no extra funding for these students. It is
the state's responsibility to fund education for all Alaska's
children. Children of new residents qualify as children of Alaska,
too. It would be grossly negligent to not recognize that.
MS. MEARS said Fairbanks is looking at growth in the student
population due to mining operations. Freezing supplemental funding
will be detrimental to the education of all the children. She
again shamed the HESS Committee members for considering further
cuts. She thanked the members for the opportunity to speak, but
added that they should "pick on somebody your own size."
Number 2230
CO-CHAIR BUNDE asked Ms. Mears to remember that HESS Committee
members are trying to do a job, and education is the largest single
expenditure in the state. The committee is perfectly willing to
accept suggestions on other programs to cut so education might be
left alone.
Number 2250
JOHN TONGEN, President, Alaska Association of School Business
Officials, testified via teleconference. He said in the 1987-88
school year, the current foundation funding program was established
with an instructional unit value of $60,000. If, at that time, an
inflation-proofing mechanism was implemented, similar to what
occurs with the permanent fund, the current instructional unit
would be worth an excess of $76,000. Of course, that did not
occur.
MR. TONGEN said in fact, the opposite occurred. The purchasing
power for the current instructional unit (IU) is worth less than
$50,000. The Alaska educational dollar continues to erode away.
The state has an obligation to provide basic services, and
education is a basic service. That is where the priorities for the
dollar should be. Mr. Tongen thanked the HESS Committee members
for the opportunity to provide input.
TAPE 95-19, SIDE B
Number 000
CO-CHAIR BUNDE noted that if the foundation formula was $68,000 the
state would be bankrupt today.
Number 044
LELAND DISHMAN, Superintendent, Yupiit School District, testified
via teleconference from Akiachak. He said he had to chuckle at the
folks who didn't know where all the kids were coming from in Mat-
Su, but he suggested they find a 10th grade biology book and find
out.
MR. DISHMAN said since 1990, his district's enrollment has
increased about 23 percent. He said the purchasing power has
eroded, and the migrant education program has decimated many of the
district's programs. He said he thinks people voted wrong on the
national level this year, but he hopes that mistake was not
repeated at the local level.
Number 097
MR. DISHMAN wished he could say he pays taxes to help pay for
education. Someone paid for his education in Tennessee by paying
property taxes. His family was too poor to pay any taxes, however.
He is glad, therefore, to pay his share to educate the upcoming
group.
MR. DISHMAN thought most of that 65 percent of people without
children, to which Co-Chair Bunde referred, did have an opportunity
to go to school. More than likely, someone paid for their
education. Those people would probably not be too bitter about
reciprocating.
MR. DISHMAN asked the HESS Committee members to look long and hard
at reducing the foundation units. He said that Ms. Kane made some
good points, and so did Mr. Tongen. It is almost impossible to
deliver anywhere close to the services previously provided by the
schools on today's budgets.
Number 158
MR. DISHMAN said in rural Alaska, they are strapped with tremendous
costs and distance. It costs a great deal for anything bought, and
then the products must be flown to Akiachak. Consolidation is
always a good idea as long as it is the other guy. He suggested
that the Anchorage legislator who would like to see the
consolidation of small rural schools consider consolidation of the
legislators from Anchorage. Mr. Dishman can see no reason why so
many are needed, although perhaps they are. Mr. Dishman said that
it would be great if they can justify their positions.
MR. DISHMAN asked the HESS Committee members to look long and hard
at this bill, to study income tax possibilities and other revenue
sources, and to remember that most of the wealth in the state of
Alaska comes from rural Alaska. Most of the wealth comes from
Prudhoe Bay, the forest and the rivers throughout rural Alaska.
The rural folks have generously shared their wealth with everyone
in the state for many years. Mr. Dishman thinks perhaps that the
rural folks have been too generous. Most of the people in
Anchorage think the wealth belongs to them.
MR. DISHMAN repeated his request for the HESS Committee members to
study the bill long and hard, and to remember the children. They
are Alaska's future. He asked them to remember all children, not
just those in Anchorage, Juneau and Mat-Su. No child's education
should be placed ahead of another child's.
Number 248
CO-CHAIR BUNDE noted that legislators who are not from Anchorage
seemed to be in agreement with the idea of consolidating the
Anchorage legislature. He also noted that there are 21 schools in
Alaska with 12 or fewer students. Each of those schools costs
$160,000. The 21 legislators from Anchorage do not cost $160,000
a piece.
Number 280
GARY CHRISTENSEN, Director of Business Affairs, North Slope School
District, testified via teleconference. He wanted to echo a few of
the topics that had been previously mentioned. The foundation
program, for the last eight years, has had the unit value of
$60,000 to $61,000. It has not been inflation-proofed. The
district has, in effect, lost a substantial amount of purchasing
power. That has squeezed out any excesses that may have existed in
the school district budgets across the state.
MR. CHRISTENSEN asked HESS Committee members to keep that in mind.
He also asked them to consider that there is really not much more
to be squeezed out.
Number 396
BOB VAN SLYKE, Superintendent, Juneau School District, thanked the
HESS Committee members for the opportunity to speak. He said
budget constraints are not new to the district. Last year the
district had to cut the operating budget or maintain the current
level of funding. This resulted in the district cutting back on
the maintenance level from about $2.5 million. As a result, the
district has 40 fewer teachers this year for about the same number
of students as the previous year.
MR. VAN SLYKE has had to increase class sizes to an average of 27
students per teacher at the elementary level, 26 to 1 at the middle
school level and 27 to 1 at the high school level. When one
calculates into the equation, preparation time that is traditional
for secondary school teachers, the district is running 32 and 33 to
1 as an average class size in the middle and high schools.
Number 464
MR. VAN SLYKE said the district has pared everything it can from
its budget. It has very few people now, relative to total staff,
that are untenured. If the district is to survive additional
constraints in terms of revenue, the district is going to be "in a
world of hurt."
MR. VAN SLYKE said as it is, commitments for the coming year in
terms of increases in health insurance costs and normal increases
in operations, the district has had to look at ways to slash the
budget by an additional $1.5 million for this year.
MR. VAN SLYKE added that now, if the district is faced with losing
another $500,000 from state funds based on HB 230, plus the
accompanying reduced capability of the city and borough to provide
the district with funds by another $100,000, the district is going
to have to cut another $600,000 from the budget. The only place
the district has to make those cuts is in those few remaining
untenured teachers. This will further increase class size.
MR. VAN SLYKE said the district has run out of room. The district
is in collective bargaining, and it is trying to do the best it can
in that regard. Mr. Van Slyke asked the HESS Committee members to
look carefully at what is being proposed.
Number 570
CO-CHAIR BUNDE assured Mr. Van Slyke that HESS Committee members
are looking very carefully at the bill. Co-Chair Bunde said he has
a great deal of sympathy with all those that testified, and the
challenges they are facing as individual school districts. As
tragic as these stories are, they do not diminish the challenge the
state is facing. Co-Chair Bunde said the purpose of a hearing is
to work together to come up with the least onerous way to address
the challenges that face the state as a whole.
CO-CHAIR BUNDE said everyone is going to be impacted negatively in
some fashion, and the HESS Committee members want to make the
impact as painless as possible.
MR. VAN SLYKE said that the adults will survive, but it is not a
good deal for the children. That is the concern of the district.
Number 630
REPRESENTATIVE ROKEBERG recalled that Mr. Van Slyke indicated last
year the district had a $2.5 million cutback, and this year it is
experiencing another $1.5 million decrease. He asked if that was
correct, and what had caused that. Representative Rokeberg thought
that the state had been increasing, not decreasing funding the last
two years.
MR. VAN SLYKE said the state has not increased the funding for his
district in the last two years. The district had an increase in FY
93 to a $61,000 IU. However, revenue has been relatively flat, but
costs have continued to increase. It would have taken $2.5 million
last year to have a maintenance level operation. Therefore,
operations had to be slashed by that amount to stay within the
revenue.
MR. VAN SLYKE continued that in the coming year, given the costs
that are built in, the district would need an additional $1.5
million immediately to have a maintenance level operation. In
other words, if a district does not have enough money for a
maintenance level operation, cuts must be made.
Number 699
REPRESENTATIVE ROKEBERG asked if that was to say the state was
responsible for the district's personnel, bargaining and other
contracts; and if every time teacher and personnel salaries are
raised, the state is responsible for paying for those raises?
MR. VAN SLYKE said the district is doing the best it can, but it is
not all just bargaining. There are other costs that have gone up
as well.
REPRESENTATIVE ROKEBERG said that he was from the private sector,
and it seems like everybody in the public sector feels they have a
right to cost-adjusted, inflatable dollars. That just doesn't
happen in the private sector, and it seems like that is an attitude
in the public sector.
Number 732
MR. VAN SLYKE said the district is doing the best it can to hold
the line. There are some things that he would be glad to comment
on if the district was not right in the middle of bargaining.
However, the intent of the district, should it get some monetary
relief, is to reduce class size. The district will do everything
it can to avoid increasing class size further.
REPRESENTATIVE ROKEBERG said that there are many people in the
private sector who have been actually cutting wages and salaries
for the last few years.
MR. VAN SLYKE said again there are things he cannot comment on
because the district is in the middle of bargaining.
CO-CHAIR BUNDE hoped the message that less money is available is
not lost on the other side of the bargaining table.
Number 777
CO-CHAIR TOOHEY did not want to belabor the point, but she said
everyone realizes that 87 percent of the school budget is in
teacher salaries and benefits, and this is not acceptable.
However, knowing that the state faces a $550 million gap, she asked
Mr. Van Slyke to realize that this is not the last of the cuts.
She wanted to make it clear that this is painful for everyone.
Everyone will survive.
MR. VAN SLYKE hoped the district could have some time to work this
out.
CO-CHAIR TOOHEY said she would love to provide that time, but
everyone has known this was coming for the last ten years. The
state is at the edge of the cliff right now, and the state must
make cuts. It has no choice.
MR. VAN SLYKE said there are disagreements on that point. Some
people see that the state has choices, or people would not be
testifying.
Number 833
REPRESENTATIVE ROKEBERG said he has heard figures anecdotally about
the Juneau district's personnel share.
MR. VAN SLYKE said that all personnel, not just teachers, comprise
91 percent of the budget.
CO-CHAIR BUNDE closed the public hearing on HB 230. It will be
heard again on Thursday. An at-ease was taken at 3:15 p.m.
Number 885
CO-CHAIR BUNDE called the meeting back to order at 3:25 p.m.
HHES - 03/14/95
HB 228 - REDUCTION IN PUBLIC ASSISTANCE PAYMENTS
Number 899
JIM NORDLUND, Director, Division of Public Assistance, Department
of Health and Social Services (DHSS), acknowledged that he was once
a representative of Representative Rokeberg's district. He
recognized that he and Representative Rokeberg had a good contest,
of which Representative Rokeberg was the victor. Mr. Nordlund
wished Representative Rokeberg much success in his job.
MR. NORDLUND said in his new capacity he does not see himself as
partisan or competitive in what takes place in the legislature,
rather, his job is to work with both legislative parties to move
welfare reform forward. This is going to be a big issue.
Number 933
MR. NORDLUND said that he would like to testify on HB 228. This
bill is known as the ratable reduction for Assistance to Families
with Dependent Children (AFDC) and Adult Public Assistance (APA).
While the Administration does not have a written position statement
on this bill, he can say with a great deal of confidence that the
Administration is opposed to this measure. Mr. Nordlund
understands the commitment behind the bill, and he does not think
it is not a mean-spirited measure on the part of the bill's
sponsors.
MR. NORDLUND understands the motivation of the bill is one of
trying to reduce the state budget. However, there are other ways
of reducing the state budget in terms of welfare payments than
reducing benefit levels. The approach of the Knowles
Administration is one of reducing the caseload. The calculations
are made a little differently, but basically the bottom line could
be the same. Less money will be spent on welfare payments.
Number 1012
MR. NORDLUND said his office is promoting caseload reduction by
finding work for people, particularly in private sector jobs, and
getting them off the welfare rolls. The Governor's blueprint for
welfare reform is riddled with ideas about moving people from
welfare to work. Combined with caseload reduction through jobs,
Mr. Nordlund's division will continue to be vigilant to insure
benefit payments are accurate. There is always a little bit of
error that causes additional benefits to be paid out that should
not be.
MR. NORDLUND said his office will also continue to be vigilant
concerning misuse and fraud that takes place within the system.
This is not a budget hearing, but his office has put a budget
before the House Finance Committee which shows that the requested
AFDC budget is being reduced this year. This is due to the
continued efforts to move people into jobs, to make sure payments
are accurate, and to insure there is no fraud.
Number 1072
MR. NORDLUND mentioned that his staff has been working with the
HESS Committee members to make sure that what the HESS Committee
plans to do with the bill in terms of benefit reductions are
accurate. There were some problems with that. A staff member
would testify when the committee came to discussion of that part of
the bill. There are federal limits concerning how much payments
can be reduced. In some cases, the bill went too far in the
original draft. Mr. Nordlund understands that is the reason for
the Committee Substitute (CS).
MR. NORDLUND commented on the cuts to APA. The Adult Public
Assistance program is assistance that goes to blind, aged and
disabled adults. Those are people who cannot reasonably find work.
They are, by definition, the truly needy. They are the most needy
in the state. The APA cuts in this bill are particularly
troublesome to Mr. Nordlund for that reason.
Number 1126
MR. NORDLUND noted that the sponsor statement contains some wording
he would like to correct. The statement says, "Health and Social
Services, along with education and state employee benefits and
salaries have traditionally been left out of budget reductions."
In terms of social services cuts, HB 67, which passed several years
ago, was a budget reduction to both AFDC and APA.
MR. NORDLUND's office has calculated that the savings for the
upcoming fiscal year, FY 96, due to the passage of that bill, will
be about $15 million. This saves payments that would otherwise be
made if that law had not gone into effect. There definitely have
been budget reductions in welfare payments in the past legislature.
Number 1188
CO-CHAIR BUNDE thanked Mr. Nordlund for his vigorous pursuit of
fraud. One of the problems with welfare reform is public
confidence in the system. Pursuing potential fraud raises the
public's confidence and makes them more comfortable with the
program.
REPRESENTATIVE DAVIS said it was nice to see Mr. Nordlund and
wished him good luck in his current position. It is the
understanding of Representative Davis that the Knowles
Administration currently agrees with the disparity in the state's
basic AFDC payments compared to the next level of spending in the
United States, as seen in Connecticut.
Number 1230
MR. NORDLUND said the Administration has not taken a position on
the level of benefits in Alaska versus any other state. Mr.
Nordlund knows that Alaska is ranked very high in terms of payment
amounts, if not the highest. The position of the Administration is
that need must be studied. It is an attitude of "we don't care how
they do it on the Outside." There are needy people in the state,
and it must be determined what is an adequate amount of money to
support those people.
MR. NORDLUND passed out a sheet which contained the results of an
analysis of the APA program. The sheet showed in a typical case,
how much recipients get in APA, how much they get in food stamps,
and how much they get in federal Supplemental Security Income
(SSI), which is a complement to APA. By making some assumptions
about what recipients pay in rent, utilities and food, Mr.
Nordlund's office determined that a typical recipient family then
has $46 left over each month. This $46 would be for
transportation, clothing, household and personal care items.
Number 1290
MR. NORDLUND said therefore, Alaska might be high compared to other
states, but certainly Alaska's recipients are not living "high off
the hog" on the assistance paid by Alaska. Mr. Nordlund personally
thinks the assistance is adequate, but not too much.
CO-CHAIR TOOHEY asked if the chart showed APA, and if the chart
assumed it was a family of two.
MR. NORDLUND said the analysis was based on a household consisting
of a single disabled individual residing in a one-bedroom. The
analysis also was based on a nonsubsidized housing unit in
Anchorage. A different chart shows what the figures would be like
in a subsidized housing unit. In addition, the same sort of
analysis is going to be done for AFDC.
Number 1350
ANGIE SALERNO, Executive Director, National Association of Social
Workers, testified via teleconference. She spoke in opposition to
HB 228. She sees this bill as short-sighted social and fiscal
policy. This bill is justified by sponsors and supporters as
necessary because the state is facing a budget crisis. They also
feel a budget gap must be closed. While this is true, and everyone
understands that state spending must be brought more closely to
state income, it is not true the place to start is with programs
that serve poor families and individuals who are elderly or
disabled.
MS. SALERNO said such statements are misleading at best. Every
dollar cut from these programs result in the loss of a federal
dollar. Both of these dollars are then lost to the Alaska economy.
In return for this false economy, more citizens lose the
opportunity for decent productive lives. In addition, the goal of
the AFDC program is undermined. Poor families will be less able to
care for their families.
Number 1403
MS. SALERNO said cutting the social welfare budget is bad business
for Alaska. She thanked Director Nordlund for offering a spirit of
cooperation and hope for real answers to reform, and for offering
some figures on the reality of living off welfare. Ms. Salerno
added that welfare has already taken cuts in the last legislative
session. Ms. Salerno offered to answer any questions.
REPRESENTATIVE DAVIS said that Ms. Salerno made the statement that
welfare was not the place to start cutting the deficit.
Representative Davis said the legislature has not started with
welfare. Seventy-five percent of the state's budget relates to
wages, welfare and education. As indicated, with the exception of
the $24 a month basic cut from welfare two years ago, all of the
other cuts that have been addressed in the last four or five years
have come from the remaining 25 percent of the general funds.
REPRESENTATIVE DAVIS said welfare is not the place to start, it is
just the fact that areas that have not been addressed in the past
are now being placed on the table for study. Representative Davis
appreciates the problems, concerns and the different degrees of
values that are placed on the legislature's attempts. The HESS
Committee members will be considering all those.
Number 1492
MS. SALERNO said she agreed that everyone has to take cuts. She
suggested the state not think about any more cuts. The state
should think about enhancing revenues. She said many people are
not afraid of the word taxes. People are not taxed highly in this
state. She said the permanent fund could be capped. There are
options. She said cuts are going to damage the state. That day,
HESS Committee members had already considered HB 230, in which
education may be cut, and now welfare. She asked that the HESS
Committee members think about what kind of state they want in the
end.
CO-CHAIR BUNDE observed that the decisions are not personally hard
to make. The problem lies in finding the majority of people who
agree on a course of action.
Number 1543
REPRESENTATIVE ROBINSON asked someone to explain last year's cuts.
She wanted to know how much they were and other information.
CO-CHAIR BUNDE said the cuts took place two years ago.
CURTIS LOMAS, Program Officer, Division of Public Assistance, said
he did not come with a detailed analysis to speak to Representative
Robinson's question, but he can certainly characterize the cuts for
her. The cuts occurred in October 1993 as a result of legislation
that was sponsored by Governor Hickel. The legislation went
through a lot of debate and the cuts originally proposed were
substantially larger.
MR. LOMAS said the benefit reduction in AFDC payments was roughly
4 percent. That is the closest he can come to an estimate off the
top of his head. The cuts were not the same in every category, but
the cuts netted out to approximately a 4 percent decrease. The
benefit reductions in APA were roughly on the order of 3.5 percent.
Number 1600
CO-CHAIR BUNDE suggested that more specific details and accurate
numbers could be provided by Ms. Lomas later.
MR. LOMAS said the other piece of that bill was that the statutory
automatic Cost of Living Allowance (COLA) increases that had
previously been awarded annually became subject to the budgetary
discretion of the legislature and have not been awarded since.
CO-CHAIR TOOHEY said the reduction came to about $12 to $15 every
month.
CO-CHAIR BUNDE said he has heard up to $24, but he is sure that
depends on the inflation factor.
MR. LOMAS said typically, previous cuts amounted to about $27 for
an AFDC family of three. If they had no other income, their
assistance went down about $27 per month.
Number 1645
CO-CHAIR BUNDE asked Mr. Lomas to address the fact that the
original version of HB 228 is not in compliance with federal law.
Therefore, there is a blank CS in the bill packets. He said the
HESS Committee members are not asking Mr. Lomas to support the
bill, they are just asking him to speak on the need for a CS.
MR. LOMAS said he discussed the problems identified with the
committee staff for a few days, and the CS results from those
discussions. The staff also asked Mr. Lomas to talk with the
drafter in Legislative Legal. Two fundamental changes occurred.
The first is that the provision in the original bill on line 10 of
page 1, which referred to effective dates has been changed.
MR. LOMAS said the original bill language would have had the
reductions go into effect on July 1 or the effective date of the
legislation, whichever is earlier. Both the Attorney General's
office and Legislative Legal opined that is illegal. That is
making the law go into effect before the law goes into effect.
That provision has been eliminated, and the changes would go into
effect as of the effective date of the Act.
Number 1705
MR. LOMAS said the other change was on line 12 of page 1 of the
original version of the bill. The amount listed there is $451.00.
That provision came up against the 1988 federal floor. There is a
provision in federal law that requires states to maintain their
benefit level to a family without an income at the level in effect
as of May 1988 or face denial of approval for a Medicaid state
plan.
MR. LOMAS said recently, the state of California put benefit cuts
into effect that are below that level. California was then
required by the federal courts to restore benefits to the previous
level.
Number 1746
MR. LOMAS said there were some changes to AFDC benefit levels. The
changes to one and two affected 1993 and the same piece of
legislation that was being previously referred to. Also, Mr. Lomas
made some technical changes to the standards to bring Alaska's
program in compliance with other federal law requirements. The
federal law had been pressuring the agency for years to change the
way the standards were structured in two areas.
MR. LOMAS said the first area was that of families that included
only eligible children, and no eligible adults. Those are normally
families in which a child or children are living with a relative
who is not a parent. Under those circumstances, the caretaker and
adult is not required to be needy in his or her own right. Only
the children's needs are covered.
MR. LOMAS said for years, Alaska had paid one child in that
situation twice as much as two children, and then incremented for
each additional child at a much smaller amount. It was the same
increment that was used in families which included an adult for
each additional child.
Number 1795
MR. LOMAS said the federal government had problems with Alaska
paying more for the first child than for each additional child. So
the change in the standards in 1993 had the increment for the
second child in families that had no needy adult the same as the
increment for each additional child in other families. In order to
not violate the federal floor when making that change, the payment
for a family of one needy child increased. This was because the
state could not reduce the payment for a family of two children
below the amount paid in 1988.
MR. LOMAS said as a result, the standard was changed to what can be
seen in the original version of the statute--to $452 for one child.
The increment that was put in place at that time was $102 for each
additional child. This brought the total payment for two children
living with a non-needy relative to $554. The federal floor is
$550. That is the amount paid for two children in that situation
in 1988. In effect, the original version of the bill would bring
the payment for two children down to $451 plus $87, which is a
total of $538, which is below the 1988 floor.
Number 1855
MR. LOMAS continued that in order to bring payment levels down to
the minimum allowable under the maintenance of effort provision,
which Mr. Lomas understood was the will of the committee, it is
necessary to increase the amount of payment for one child to $463
so the $87 increment for the second child does not violate the 1988
floor of $550.
MR. LOMAS said that is the shortest way to explain those changes.
In effect, this is a problem that occurred back in 1993, and this
is a fallout from that. The impact is relatively minor. The
overall impact of the reductions in the original version of the
bill on the assistance payments budget component was 7.1 percent in
total payments. The impact of the CS version is 7.0 percent.
Therefore, the practical impact of the changes is relatively minor.
MR. LOMAS said these cases that actually would receive an increase
of $11 a month, account for 1.5 percent of all the children on
AFDC.
Number 1950
REPRESENTATIVE BRICE asked what the average benefit is for AFDC and
APA recipients. It needs to be made clear that there is a big
difference between maximum benefit being discussed here and the
average benefit paid out.
MR. LOMAS said the average benefit under current law for 1996 is
projected at $788. That includes all variations in family size and
type. This legislation would bring that down to $733. There will
be an average reduction of $55 per month.
REPRESENTATIVE BRICE said in Section 1 on page 2, lines 7 or 8, the
words "or a single person household that does not consist of a
dependent child" are being taken out. This bill is taking these
words out of statute.
MR. LOMAS said he can see how people might object to that language
being in there, and that might lead people to believe that is to
cover people who are not parents. Mr. Lomas said the reason the
language is in there is because federal law requires that in very
specific circumstances the state has to pay AFDC benefits to an
individual who does not have a child who is included in the AFDC
case. That is if the only child in the home meets all the
requirements of being a dependent child for AFDC purposes, but
instead receives SSI benefits because the child is disabled.
MR. LOMAS continued that in those circumstances, the AFDC grant
includes only the needs of the adult caretaker because the child's
needs are met through the SSI program.
Number 1999
REPRESENTATIVE BRICE said therefore, basically those children are
no longer eligible to receive any type of benefit by striking that
language.
MR. LOMAS said as he reads the remaining language, what is left
sets the maximum standard for various categories of individuals.
It does not prohibit the department from making payments to men or
women whose only child receives SSI assistance. It merely
eliminates the specificity of the standard. In practical effect,
in order to continue to comply with federal law, Mr. Lomas thinks
the state will continue to make payments to those individuals and
use the state's regulatory authority to do so.
Number 2030
CO-CHAIR BUNDE moved to adopt the CS, but announced it is not the
Chair's intention to move the bill today. The bill would be
addressed again on Thursday.
REPRESENTATIVE ROKEBERG said he has not read the bill in-depth, and
he is having trouble identifying where the APA line item is. He
asked if the amount was not being specified.
CO-CHAIR BUNDE read, "to comply with federal requirements, reduce
the maximum state contribution..."
REPRESENTATIVE ROKEBERG asked if that was a variable amount of APA.
CO-CHAIR TOOHEY moved that CSHB 228 be adopted.
CO-CHAIR BUNDE asked that the motion be held for just a minute, and
asked Mr. Lomas to address Representative Rokeberg's concerns.
Number 2083
MR. LOMAS said the language basically effects a 10 percent
reduction in APA payments whether it is the maximum level or
someone is receiving benefits below the maximum level because the
amount of benefits is calculated by subtracting the income from the
maximum level.
REPRESENTATIVE ROKEBERG asked if there was a variable of factors
present. In an individual case, there are going to be variations.
CO-CHAIR BUNDE said there is a motion before the committee to adopt
the CS for HB 228. There were no objections and the CS was
adopted. He asked for further discussion.
Number 2112
REPRESENTATIVE BRICE asked how the need standard in the state is
affected by all the discussion about reduction of this benefit and
that benefit. There should not be any effect on the need standard.
Representative Brice asked about the process necessary to increase
the need standard.
MR. LOMAS said the need standard is set in regulation. What was
done when the level maximums were reduced in 1993, is that the
needs standard was maintained at the current level. This was
largely because if the needs standard is reduced, there are going
to be some people receiving very small grants who lose their
eligibility for a payment, and thereby lose their eligibility for
Medicaid coverage.
MR. LOMAS said the legislature expressed, in 1993, a will to reduce
the benefit payment level without causing anyone to lose
eligibility. Based on that, the same needs standards were kept in
regulation. That applies both to AFDC and APA.
TAPE 95-20, SIDE A
Number 000
CO-CHAIR BUNDE reminded the HESS Committee members and the audience
that the bill was being held until Thursday.
REPRESENTATIVE ROKEBERG asked about the bills that are coming
forward on the permanent fund dividend and hold harmless issues.
He asked if Mr. Nordlund and Mr. Lomas will be involved in
testifying on those issues.
MR. NORDLUND said those bills affect his division. Some of those
bills were actually winding their way through the legislative
process before Mr. Nordlund was hired to his current position. Mr.
Lomas is the primary testifier on those topics.
REPRESENTATIVE ROKEBERG asked for the record if anyone had
requested Mr. Lomas provide some sort of impact flow charts that
could be readily discernible to legislators to show the effects of
the various aspects of the proposed legislation on the general
fund. He asked if such charts were being worked on.
MR. LOMAS said there has been several requests for such charts.
Other bills have held up that work, but that is something his
office hopes to have out in the next week or so. Some information
has been developed for the Senate Finance Committee. There are
additional pieces to be developed that should be available.
Number 122
CO-CHAIR BUNDE observed that these bills are in a state of flux,
and perhaps addressing them in the Finance Committee might be the
best place so Mr. Lomas does not do work that is perhaps not
necessary.
REPRESENTATIVE ROKEBERG asked if those bills were going to be heard
before the HESS Committee.
CO-CHAIR BUNDE said those bills are well beyond the HESS Committee.
CO-CHAIR TOOHEY said probably, Representative Hanley has already
requested such numbers.
Number 174
ADJOURNMENT
CO-CHAIR BUNDE adjourned the meeting at 3:58 p.m.
| Document Name | Date/Time | Subjects |
|---|