Legislature(2019 - 2020)GRUENBERG 120
03/26/2019 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB96 | |
| HB71 | |
| HB31 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 96 | TELECONFERENCED | |
| + | HB 71 | TELECONFERENCED | |
| *+ | HB 31 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 26, 2019
3:04 p.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Jonathan Kreiss-Tomkins, Co-Chair
Representative Gabrielle LeDoux
Representative Andi Story
Representative Adam Wool
Representative Sarah Vance
Representative Laddie Shaw
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 96
"An Act relating to Alaska Pioneers' Home and Alaska Veterans'
Home rates and services."
- HEARD & HELD
HOUSE BILL NO. 71
"An Act relating to hiring for positions in state service based
on substitution of military work experience or training for
required civilian work experience or training."
- HEARD & HELD
HOUSE BILL NO. 31
"An Act making a special appropriation to the Alaska permanent
fund; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 96
SHORT TITLE: PIONEERS' HOME AND VETERANS' HOME RATES
SPONSOR(s): REPRESENTATIVE(s) FIELDS
03/15/19 (H) READ THE FIRST TIME - REFERRALS
03/15/19 (H) STA, HSS
03/26/19 (H) STA AT 3:00 PM GRUENBERG 120
BILL: HB 71
SHORT TITLE: STATE PERSONNEL ACT: VETERANS' EXPERIENCE
SPONSOR(s): REPRESENTATIVE(s) STORY
02/25/19 (H) READ THE FIRST TIME - REFERRALS
02/25/19 (H) MLV, STA
03/12/19 (H) MLV AT 2:00 PM GRUENBERG 120
03/12/19 (H) Heard & Held
03/12/19 (H) MINUTE(MLV)
03/14/19 (H) MLV AT 2:00 PM GRUENBERG 120
03/14/19 (H) Moved HB 71 Out of Committee
03/14/19 (H) MINUTE(MLV)
03/19/19 (H) MLV AT 2:00 PM GRUENBERG 120
03/19/19 (H) Moved HB 71 Out of Committee
03/19/19 (H) MINUTE(MLV)
03/20/19 (H) MLV RPT 4DP
03/20/19 (H) DP: TARR, JACKSON, RAUSCHER, LEDOUX
03/26/19 (H) STA AT 3:00 PM GRUENBERG 120
BILL: HB 31
SHORT TITLE: APPROP: EARNINGS RESERVE TO PERM FUND
SPONSOR(s): REPRESENTATIVE(s) KREISS-TOMKINS
02/20/19 (H) PREFILE RELEASED 1/11/19
02/20/19 (H) READ THE FIRST TIME - REFERRALS
02/20/19 (H) STA, FIN
03/26/19 (H) STA AT 3:00 PM GRUENBERG 120
WITNESS REGISTER
CLINTON LASLEY, Director
Division of Alaska Pioneer Homes (DAPH)
Department of Health and Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
96.
GREG SMITH, Staff
Representative Andi Story
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions on behalf of
Representative Story, prime sponsor of HB 71.
KEVIN MCGOWAN, Staff
Representative Jonathan Kreiss-Tomkins
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Co-presented HB 31 on behalf of
Representative Kreiss-Tomkins, prime sponsor, with the use of a
PowerPoint presentation.
ANGELA RODELL, Chief Executive Officer
Alaska Permanent Fund Corporation (APFC)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
31.
ALEXI PAINTER, Fiscal Analyst
Legislative Finance Division
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
31.
ACTION NARRATIVE
3:04:55 PM
CO-CHAIR JONATHAN KREISS-TOMKINS called the House State Affairs
Standing Committee meeting to order at 3:04 p.m.
Representatives LeDoux, Story, Vance, Shaw, Fields, and Kreiss-
Tomkins were present at the call to order. Representative Wool
arrived as the meeting was in progress.
HB 96-PIONEERS' HOME AND VETERANS' HOME RATES
3:05:54 PM
CO-CHAIR KREISS-TOMKINS announced that the first order of
business would be HOUSE BILL NO. 96, "An Act relating to Alaska
Pioneers' Home and Alaska Veterans' Home rates and services."
3:06:21 PM
CO-CHAIR FIELDS, as prime sponsor of HB 96, relayed that the
proposed legislation would establish predictable rate increases
pegged to inflation to improve the financial stability of Alaska
Pioneer Homes (APH) while providing certainty and affordability
to the residents. He stated that APH are uniquely Alaskan;
they've existed since 1913 when the first home opened in Sitka
to serve the new incorporated territory. He said that the
newest home was built in Juneau in 1988; in 2007 the Palmer
Pioneer Home became certified by the U.S. Department of Veterans
Affairs (VA) to become the Alaska Veterans & Pioneers Home
(AVPH). There are also Pioneer Homes in Sitka, Anchorage,
Fairbanks, and Ketchikan; together, APH have always served
Alaska seniors as they age in The Last Frontier. He offered
that given the frontier nature of the state, APH have provided
key places for seniors to age in place near their families. He
continued by saying that APH create important space for family
members to age in place safely, in their home communities, and
close to the communities that Alaska elders helped build. The
APH are statutorily established and operated through the
Department of Health and Social Services (DHSS) and for
generations, the legislature has provided very modest general
fund (GF) support to keep them affordable for elders and to
ensure that elders can age here in Alaska instead of moving to
the Lower 48.
CO-CHAIR FIELDS relayed that [Governor Michael J. Dunleavy] has
proposed two significant policy changes that would undo the
State of Alaska's historic commitment to APH: 1) an $18 million
undesignated fund cut - a 53 percent reduction, and 2) very
large rate increases for residents - up to $15,000 per month -
proposed by DHSS. Co-Chair Fields maintained that it is
important to recognize that the two policy proposals exist in
tandem with one another; under the governor's direction, APH
have been mandated to shift in the direction of being self-
supporting. Co-Chair Fields emphasized that he considers this
shift to be unsustainable, and it fails to keep the faith with
Alaska elders that has been supported by legislators for many
generations. He relayed that these proposals have shocked and
concerned many caregivers, family members, and residents of the
homes. He has heard about these concerns directly from those at
the Anchorage Pioneer Home.
CO-CHAIR FIELDS offered that fortunately the House Health &
Social Services Finance Subcommittee has restored $20 million in
funds - half in GF and half through the ability to bill Medicaid
- effectively negating the need for the massive rate increases.
He stated that as DHSS has played a part in keeping APH
affordable through the budget, the legislature must do its part
in terms of legislation to provide sustainable and predictable
price increases rather than massive price increases. He offered
his concern that without HB 96, there could be a "death spiral"
for APH, in which the majority of APH residents who are private
payers would be incentivized to seek lower cost facilities in
the Lower 48. He asserted that the socio-economic mix in APH is
an important part of the institution; it is important that a
significant percentage of residents be able to pay their own way
as they always have and as most of them do today.
3:10:38 PM
REPRESENTATIVE FIELDS opined, "I think we can do better. The
legislature always has done better than this. We've always
supported the Pioneer Homes ..." He stressed that the proposed
legislation would provide predictable, fair rate increases
linked to the consumer price index (CPI). He said that there
are about two dozen [Alaska] statutes that link to CPI; it is a
common measure for trying to establish predictable rate
increases so that the cost of a given program does not grow over
time without necessary adjustments.
CO-CHAIR FIELDS related that the prices of APH have changed
about four times over the past decade; the proposed legislation
would increase rates at a faster pace than seen in the past
decade. He said that the rate increases have been sporadic and
uneven; and HB 96 would establish a more predictable process.
CO-CHAIR FIELDS concluded by recognizing the hard work and
public service of APH employees. He shared that the age of APH
residents has increased dramatically; the average age is
currently 87; many have dementia-related disorders; therefore,
the work of the employees has become more difficult in recent
years. The employees do incredible work under incredibly
difficult circumstances. He mentioned that the employees are
very innovative; they have started a new dementia care training
program for certified nursing assistants (CNAs); it is the first
of its kind in the state and serves as a model for the private
sector. He asked for legislative support for APH recognizing
not just the contribution of the elders, but the incredible work
of APH employees to honor elders.
3:12:29 PM
REPRESENTATIVE LEDOUX asked to know the portion of APH fees paid
by Medicare.
REPRESENTATIVE FIELDS responded that the overall payer source
breakdown for residents is as follows: 51 percent private pay;
20 percent Medicaid waiver; and 29 percent of residents have
some sort of payment assistance. He relayed that another
innovation by DHSS and the Division of Alaska Pioneer Homes
(DAPH) in the past few years has been identifying opportunities
to have Medicaid pay a growing share of APH bills. He stated
that there are different levels of care in APH: individuals for
whom Medicaid pays a significant portion of the bills tend to be
in the third level of care [Level III] - higher need and higher
acuity care. Level I and II - lower levels of care - tend to be
in the "self-pay" group.
REPRESENTATIVE LEDOUX asked whether there was any way to
formulate a program so that the state is not charging the
private pay residents more, but those getting Medicaid
assistance, because there is a federal match.
REPRESENTATIVE FIELDS stated that a Medicaid waiver is granted
for residential long-term care; it is referred to as a 1915(c)
[Home- and Community-Based Services (HCBS) waiver under Section
1915 of the Social Security Act]; it pays a daily rate of $162.
He expressed his concern that the proposed rate increases [by
the administration] greatly exceed what the state would receive
through a Medicaid waiver. He agreed that the state should
pursue rate increases that are designed to maximize federal
revenue. He offered that the proposed rate increases are so
steep that they do not correspond to what Medicaid can pay.
Comparing the rate of $15,000 per month with the $162-per-day
Medicaid 1915(c) waiver rate reveals a huge gap which most
likely would not be paid. At that rate the life savings of most
residents would be liquidated very quickly. He maintained that
it is pointless to have such a high advertised rate, knowing
that most people would not be able to pay it and Medicaid would
not pay it. He emphasized that the state should maximize
federal revenue, and the theoretical high rates are not
strategically designed to maximize federal revenue. He shared
that the current monthly rate for Level III is $6,700.
REPRESENTATIVE LEDOUX asked how people pay for Providence
[Health & Services Alaska] Extended Care.
REPRESENTATIVE FIELDS answered that in order to be eligible for
certain Medicaid programs, one must effectively liquidate most
of one's savings and place the remainder in a Miller [qualifying
income] Trust. He stated that essentially one cannot have too
much in assets to qualify; and there are different Medicaid
rates for different types of care. He noted that a Pioneer Home
is an assisted living facility, which is different from a
skilled nursing facility; the two have different rates. He said
that the reality is that APH provide a very high level of care
among assisted living facilities - much higher than one would
find in a home-based Medicaid waiver setting. For that reason,
Agnew::Beck [Consulting] has recommended that Alaska establish a
new daily rate for higher acuity assisted living facilities,
recognizing that facilities like APH should be able to bill at a
higher rate than the average home-based Medicaid provider. He
maintained that it is a logical recommendation but one that has
been overlooked in the rate increase proposals.
3:17:58 PM
CO-CHAIR KREISS-TOMKINS asked for a definition of higher acuity.
REPRESENTATIVE FIELDS responded that higher acuity refers to a
greater need for services. He explained that there are three
levels of care: 1) The lowest level is for people who want to
age in APH but live independently. They are a shrinking
percentage. 2) People in Levels II and III may have dementia-
related disorders or be in a wheel chair. They are a growing
percentage. Higher acuity represents higher intensity care, and
these residents pay higher rates under the existing payment
structure.
REPRESENTATIVE LEDOUX asked for an explanation of Medicaid
waiver.
REPRESENTATIVE FIELDS explained that Medicaid waiver is obtained
by an individual to pay for living in a long-term care assisted
living setting. He added that there are different Medicaid
waivers for different services. There are Medicaid waivers for
personal care services; these services are different from
residential supported living, which is what APH are.
REPRESENTATIVE LEDOUX asked, "A waiver from what?"
REPRESENTATIVE FIELDS replied that it is a waiver for an
individual to receive Medicaid (indisc.) to pay for long-term
care.
REPRESENTATIVE SHAW asked for the percentage of APH residents
who pay the full rate.
REPRESENTATIVE FIELDS responded that 51 percent are self-pay
residents.
REPRESENTATIVE SHAW offered his understanding that the AVPH in
Palmer is split into three [payment] sources: the VA pays a
portion; the state pays a portion; and the individual pays a
portion.
CO-CHAIR FIELDS concurred and added that 49 percent of residents
are private pay; the other half pay through a mix of public
sources, with the VA contributing the greatest share.
REPRESENTATIVE WOOL asked for confirmation that Medicare is
medical insurance for those over 65 but does not pay for long-
term care.
REPRESENTATIVE FIELDS expressed his understanding that Medicare
pays for healthcare and does not pay for assisted living, hence,
the need for a Medicaid waiver.
3:21:40 PM
REPRESENTATIVE STORY expressed that the rate increases proposed
- 138 percent - is extreme and poses challenges for seniors and
their families to plan; however, the rates have been low and the
cost of care needs adjustment. She asked whether the rates
should be adjusted before being subjected to the CPI formula.
REPRESENTATIVE FIELDS replied that he would welcome an amendment
to address that issue. He suggested applying inflation rates or
CPI healthcare inflation rates to the [APH] cost of care from a
decade ago and using that as a starting point. He said that he
also would be open to more levels of care; there is research
that supports doing so. He said that he agrees that rates
should be predictable and transparent, and APH should be
competitive and affordable for Alaska elders.
CO-CHAIR KREISS-TOMKINS noted that Section 5 of HB 96 [page 3,
starting on line 19] codifies the three levels of care in
statute. He asked whether the three levels of care are
currently in statute or exist in regulation only.
CO-CHAIR FIELDS answered that the three levels are currently in
regulation. He reiterated that he is open to discussion and
amendments.
REPRESENTATIVE VANCE asked what the actual costs of care are for
the three levels - the costs incurred by the homes.
REPRESENTATIVE FIELDS responded that the cost of care for Level
I services is $3,623 and the monthly rate is $2,588; for Level
II, the cost of care ranges from $6,569 to $11,185; for Level
III, the cost of care ranges from 11,185 to $13,333. He stated
that DHSS has proposed added a new level - Level V - with a
proposed rate of $15,000. He referred to Representative
LeDoux's question regarding maximizing federal revenue and
stated that the residential supported living [Medicaid] waiver
rate is $162 per day or about $4,881 per month. He added that
currently many individuals at the higher levels of care are in
the Medicaid waiver population.
3:26:57 PM
REPRESENTATIVE VANCE asked what the costs would be when based
upon the proposed daily rates under HB 96.
REPRESENTATIVE FIELDS responded that the rates for APH residents
would correspond to what DHSS believes to be the cost. He added
that the governor has made a policy decision that APH should
follow a self-sustaining model.
REPRESENTATIVE VANCE asked how HB 96 would change that outcome.
REPRESENTATIVE FIELDS replied that the proposed legislation
would set rate increases to correspond to inflation, thereby
limiting them. Under HB 96, residents would pay more than
currently but significantly less than under the governor's
proposal.
REPRESENTATIVE VANCE asked for confirmation that residents would
pay less than the actual cost.
CO-CHAIR FIELDS answered, yes.
REPRESENTATIVE VANCE referred to the fiscal note (FN)
[Identifier: HB096-DHSS-PH-3-22-2019, OMB Component Number:
2671] analysis [page 2] which read:
Under this legislation, the State will continue to
subsidize the cost of services to all residents,
including those with private pay ability.
REPRESENTATIVE VANCE asked how it would be determined who is in
greatest need for access to APH.
REPRESENTATIVE FIELDS explained that statute states that APH
rates need not reflect the cost of care; this is due to the
longstanding legislative decision to keep APH affordable.
Statute also states that residents will not be evicted for
inability to pay. The APH accept residents based on a
transparent and fair waitlist process and admit residents
regardless of ability to pay. When wait-listed residents are
accepted, they have a limited length of time to accept the
offer, move into the home, and work with staff on a payment
plan. Payment may be through self-pay or payment assistance.
3:30:07 PM
REPRESENTATIVE LEDOUX asked whether there are facilities outside
of APH that have long-term care. She mentioned the Providence
Extended Care facility near Boniface Parkway. She asked to know
the rates for that facility.
REPRESENTATIVE FIELDS referred to a recent presentation by DHSS
providing cost comparisons to the House Health & Social Services
[Finance Subcommittee]. He stated that costs at a private care
facility vary significantly depending on whether the facility is
assisted living or skilled nursing. He said that DHSS relayed
that in Seattle, the average cost at an assisted living facility
is $5,720 per month; the average cost at a skilled nursing
facility is more than twice that amount. In Portland, the
average cost at an assisted living facility is just under $5,000
per month; the average cost at a skilled nursing facility is
nearly twice that amount. In Anchorage, the average cost at an
assisted living facility is about $6,000 per month; the average
cost at a skilled nursing facility is in excess of $20,000.
CO-CHAIR FIELDS continued by posing the question: If people
were not in APH, would they be in an assisted living facility or
in a skilled nursing facility? He expressed his concern that
Alaska would have prices for APH that were so high that self-
paying assisted living residents would have no choice but to go
to private assisted living facilities and those facilities would
most likely be in the Lower 48 because of the limited private
sector options in Alaska. He acknowledged that Anchorage has
ample in-home care, but not facilities providing care comparable
to APH.
REPRESENTATIVE LEDOUX asked whether Marlow Manor [an assisted
living facility in Anchorage] and Providence [Health & Services
Alaska] accept residents under the Medicaid rates.
REPRESENTATIVE FIELDS replied that he does not know the payer
mix at Marlow Manor or Prestige Care [and Rehabilitation Center
of Anchorage].
REPRESENTATIVE LEDOUX suggested that virtually no one would have
the ability to pay $20,000 per month and speculated that they
would be under Medicaid rates.
REPRESENTATIVE FIELDS concurred that almost no one could pay
$15,000 per month, and Medicaid is a standard payer for long-
term care. He reiterated that he does not know the rates of the
private facilities mentioned.
REPRESENTATIVE LEDOUX offered that the disadvantage of Medicaid
is the necessity to liquidate one's assets. She suggested that
liquidating assets by being in long-term care affects the heirs
more than the residents.
CO-CHAIR FIELDS stated that he doesn't have a concern with an
Alaskan using his/her entire savings to provide for his/her
long-term care in APH. His concern is the massive "sticker
shock" - $15,000 per month - and the uncertainty of a rate
structure that is fundamentally unpayable; the only safeguard
against eviction is the statute, which could be revoked by the
legislature at any time; and the rate is three times the
Medicaid waiver rate.
3:35:13 PM
REPRESENTATIVE WOOL asked whether the governor's budget is the
impetus for introducing HB 96 or the need to implement
consistent and regular rate increases for APH. He mentioned the
rates increases - 8.5 percent in 2016 and 5 percent in 2009. He
asked to know what was wrong with the current system [of rate
increases], regardless of the governor's budget proposal.
REPRESENTATIVE FIELDS maintained that it would be advantageous
under any circumstance to have a predictable and sustainable
path for rate increases; however, with the budget proposal
paired with a regulatory proposal there is more urgency. He
offered that even if the legislature rejected the governor's
budget proposal, it would be within the regulatory power of DHSS
to raise rates dramatically. He offered his concern regarding
"driving out" the private payers, who have been an important
population in APH.
REPRESENTATIVE WOOL asked if the private pay rate is
artificially high to compensate for the lower Medicaid
reimbursement rate. He gave as an example: the true cost of
care is $10,000 per month and Medicaid reimbursement is $5,000.
He asked if state subsidies provide the balance.
3:37:32 PM
CLINTON LASLEY, Director, Division of Alaska Pioneer Homes
(DAPH), stated that APH rates have been set by regulation for
many years. He relayed that over a 15-year period there have
been four rate increases totaling 15 percent; during that same
time inflation was 35 percent. He stated that he put forward a
proposal in the governor's budget for a rate increase to be
reflective of the true cost to DAPH to provide services,
understanding statute clearly defines that a resident cannot be
evicted due to inability to pay and the payment assistance
program is in place to protect those who can't pay. Under the
current system, Alaska is subsidizing every individual who is in
APH regardless of need. He said that his proposal is to
establish a true need-based system so that individuals who need
assistance would receive it and individuals who can pay more
would pay what they can. In response to Representative Vance,
who asked the true cost of providing these services, he referred
to slide 14 of the PowerPoint presentation from the Office of
Management & Budget (OMB), included in the committee packet,
which states that the cost of Level I services is $3,623; the
cost of Level III services is $13,333.
MR. LASLEY offered that the $15,000 rate is for a subsection of
the population for whom the state is currently not providing
services. He referred to an Agnew::Beck study funded by the
Alaska Mental Health Trust Authority (AMHTA) [Staffing Plan and
Cost Impact Analysis for the Alaska Pioneer Homes, 11/29/18]
that explores the best way to serve community needs and the
level of care needs in the community and determines the staffing
structure. The study determined that there is a subsection of
the population - those with dementia and complex behaviors - who
are currently not being served in assisted living or many
nursing home settings and who inappropriately are being place in
emergency departments or the Alaska Psychiatric Institute (API).
He relayed that DAPH is currently building a complex behavior
neighborhood in the Anchorage Pioneer Home with capital budget
funding received in 2018. He maintained that the $15,000 per
month represents the rate for this subsection of the population
needing the highest level of care.
MR. LASLEY stated that DHSS put forward a regulatory package -
currently being reviewed by the Department of Law (DOL) - that
would establish rates reflecting the true cost of services.
Within the package is a proposal to tie future rate increases to
Social Security Administration (SSA) rate increases, which is
currently being used for individuals receiving payment
assistance. He summarized by saying that currently everyone in
APH is being subsidized by the state - regardless of payer
source - because of the artificially low rates.
REPRESENTATIVE WOOL asked for confirmation that everyone in APH
receiving Level I services is paying less than the actual cost
of $3,623 regardless of ability to pay.
MR. LASLEY responded, "You're correct." He added that for an
individual in APH who is receiving Lovel I services, it costs
the state $3,623 to provide those services, but the individual
only pays $2,588 - the advertised rate.
3:42:41 PM
REPRESENTATIVE WOOL referred to Mr. Lasley's statement that DAPH
would not evict a resident who was unable to pay the actual cost
of $13,333. He asked about an applicant who doesn't have the
ability to pay the $13,333; the state wouldn't subsidize the
care of that individual; and SSA, Medicaid, and Medicare doesn't
cover the cost. He asked, "Are those people just left out?"
MR. LASLEY replied that statute is clear that someone living in
the state who is 65 years of age or older can move into APH if
he/she is a resident of the state for at least one year and has
a medical need to be in APH. The DAPH does not ask about one's
ability to pay when put on the waitlist initially. When
individuals become ready to move into APH, they put themselves
on the activate waitlist; the state does not ask them about
their ability to pay. As rooms become available, DAPH contacts
individuals on the waitlist, asks them to move into a home, but
does not ask about ability to pay. It is only after an
individual accepts a room at APH that DAPH discusses the
person's finances, what he/she can pay, need for state
assistance, and qualification for Medicaid waiver. He
maintained that DAPH's challenge is that rates have not been
reflective of the true cost of care: therefore, DHSS has
proposed to show in regulation the true cost of providing
services - knowing that the payment assistance program exists.
Additional funds were added to the payment assistance program
budget to ensure that every individual who wanted or needed to
live at APH and could not pay for the services would be
subsidized by the state.
REPRESENTATIVE WOOL offered his understanding that currently
people are accepted into APH regardless of the ability to pay;
DHSS proposes charging the true rate; the change under HB 96 is
that someone who has the ability to pay through depleting
his/her assets will pay the full rate until they are out of
money, at which time they would be eligible for state subsidies.
He maintained that under the proposed legislation, the state
would get the full rate for a longer period than currently.
MR. LASLEY responded, "This is correct." He explained that
currently every resident is being subsidized regardless of need.
Under the DHSS proposed plan, by regulation, rates would be
raised, and the resident would use his/her resources to pay
whatever he/she could, based on the payment assistance program.
He gave an example: A resident moves into the home and can pay
the $13,333 rate for six months. Once he/she needs state
payment assistance, DHSS would process the individual through
the payment assistance program. The rules are set in statute
defining an individual's income, limited allowable resources,
and allowable deductions such as for taxes and insurance
premiums. The remainder is subsidized by the state. He
acknowledged that Representative Wool's analysis was correct: a
resident would pay what he/she can of the true cost of providing
services; at the time he/she needs assistance, he/she would be
qualified for the program. In this way [the payment assistance
program] truly would be a need-based system.
3:47:29 PM
CO-CHAIR KREISS-TOMKINS referred to the waitlist and activation
on the waitlist and asked, "How many people are presently on
that waitlist, and of all the people presently on the waitlist,
how many of them have activated themselves saying, 'I want a
room as soon as it becomes available.'?"
MR. LASLEY replied that there are about 5,500 people currently
on the inactive waitlist. These are people who have put
themselves on the list to move into a home at a future date.
Just over 200 individuals are ready to move into a home within
30 days, therefore, have activated themselves.
REPRESENTATIVE SHAW asked how the rate increases would affect
long-term care insurance.
MR. LASLEY responded that currently there are a group of
individuals with long-term care insurance that pays to APH. The
department has discovered that because it is not charging the
full amount for care, insurance is not paying the most it can
pay under the plan. He stated that a rate increase would not
affect the long-term care insurance.
REPRESENTATIVE SHAW asked whether long-term care insurance has a
limit.
MR. LASLEY answered that each insurance program has a limit as
far as maximum payout.
REPRESENTATIVE LEDOUX asked whether there must be a medical need
[for acceptance into APH] beside an age requirement. She
suggested that a surviving spouse might not feel comfortable
living on her own and asked whether that would constitute a
medical need.
MR. LASLEY relayed that under statute an individual must be [at
least] 65 years of age. The APH looks for individuals who are
not safe living at home or who cannot take care of themselves on
their own. He suggested that a person who forgets to turn off
the stove could fall into that category.
3:50:46 PM
REPRESENTATIVE WOOL asked how the state subsidy is allocated and
the mechanism for funding the state subsidy. He asked whether
that fund was secure.
MR. LASLEY answered that historically the payment assistance
program has been funded through GF and GF / Mental Health. He
added that the statute that states that APH neither accepts
individuals based on their ability to pay nor evicts individuals
due to their inability to pay is what secures the payment
assistance program.
REPRESENTATIVE WOOL asked whether the funding is separate from
the funding for APH itself. He asked about the fund's
availability to continue to pay the costs of care and make up
the difference between what Medicaid pays and the costs. He
mentioned that HB 96 was introduced due to a concern that rates
are exceeding people's ability to pay.
MR. LASLEY responded that the current payment assistance has
been paid out of the APH component of GF. He stated that under
the governor's proposal, there would be a separate unique
component developed - the payment assistance component. He
maintained that the purpose of developing this component is to
truly identify the amount that needs to be subsidized by the
state. Initially when the $15 million was put into the fund,
OMB and DHSS did not know what would be needed for state subsidy
because it was paid from GF. Individuals have never been asked
about their ability to pay. Under the proposed DHSS
regulations, DHSS would identify exactly what the needs of
individuals are for state subsidy and draw down that state
subsidy component by the amount needed. He gave an example: If
someone could pay $10,000 and needed $3,333 in subsidy, DHSS
would draw that amount down from the [payment assistance]
component and truly be able to identify what individuals need
for subsidy and not subsidize individuals merely because the
rates are low.
REPRESENTATIVE WOOL expressed his understanding that currently
every resident is subsidized because APH is not charging the
actual rate; under the proposal, the true rate would be charged,
and if a person cannot pay, it would be subsidized through the
new subsidy program. He asked whether there was ever more of a
residency requirement [for APH] beyond the current requirement
of one year.
MR. LASLEY answered that there was a requirement for longer
residency, but he does not know when it was changed to one year.
He clarified that under the proposal, the payment assistance
program would be intact as previously, and the difference would
be that DHSS would account for it in a separate component. He
stated that it is not a new program; the governor's proposal is
for the rates to reflect what it truly costs to provide
services, and to truly account for it.
3:55:49 PM
REPRESENTATIVE VANCE expressed her understanding as follows: If
the state raises the rates to reflect actual costs, it could
maximize its draw from insurance and federal funds, account for
the amount truly needed in the state budget and help the people
who truly need [the care]. She added that there is a clear
increase in the aging population in Alaska, and Alaska needs
many more private care facilities for seniors; however, with APH
subsidizing senior care, there is little incentive for people to
move into private facilities. She maintained that if the costs
of each were competitive and both were able to draw on the
insurance and federal funds, then APH truly could be need-based
- for people who cannot pay. She asked for confirmation that
she has accurately stated the motivation behind the governor's
proposal.
MR. LASLEY responded that when he introduced the proposal to
raise rates to reflect the cost of providing services, it was
not an easy decision - knowing that it would cause angst among
people living in the homes or planning to live in the homes. He
stated that the payment assistance program provides security.
He said that the APH system was developed to be a true need-
based system and serve individuals who need assistance and do
not have the ability to pay for care in the private sector. He
voiced that currently DAPH, by keeping its rates artificially
low, is competing with the private sector, and state government
should never compete with the private sector. He considered how
to raise rates - incrementally or one time. He mentioned that
the 8.5 percent rate increase in 2016 caused many issues for
residents. He said that his proposal was to raise rates to what
it costs to provide services rather than raise them multiple
times and to avoid competing with the private sector.
REPRESENTATIVE VANCE asked whether under the governor's
proposal, the rates for residents currently in the homes would
be "grandfathered" in and new residents would be subject to the
new rates.
MR. LASLEY answered, no. The current proposal is to increase
rates for every individual; he is unsure if DAPH could charge
varying rates for the same service. He reiterated that the rate
increase was for every individual; however, if assistance is
needed, the payment assistance component could be used or an
individual needing the highest level of care could draw down
his/her assets and qualify for a Medicaid waiver. He maintained
that the proposal represents a multitiered approach: higher APH
rates, Medicaid waiver reimbursement rates, and accounting for
individuals who need assistance.
4:00:28 PM
REPRESENTATIVE STORY related that the intent of APH was for
Alaska to take care of its seniors at the point they need the
care, and the state would help provide that care. She
maintained this has been the state's policy for a long time; the
governor's proposal represents a major shift in policy; the
change is a drastic and sudden change; and seniors and their
families have planned with the current rates in mind. She
relayed the percent increases listed in the table on slide 14,
entitled "Current vs. Proposed Monthly Rates," for the various
level of care categories: 40 percent, 40 percent, 138 percent,
65 percent, and 96 percent. She opined that the increases are
large. She expressed her desire to see more gradual increases
to allow people to plan and anticipate the costs. She
understands DAPH's viewpoint; however, it is a difficult
situation. Alaska does not have many places for seniors. It
would be unfortunate if they had to leave and not be by their
families. She asked whether DAPH has considered proposing a
more moderate increase.
MR. LASLEY answered yes, and that DAPH looked at multiple
different approaches. The beauty of the regulatory process is
that it is posted for 60 days for public comment and the rate
would be determined by the DHSS. He acknowledged that the true
cost of providing services does present "sticker shock"; there
is not easy way to rightsize DAPH. He mentioned that increasing
rates over a three-year period would require a regulation change
every year, public testimony every year, and a decision made
every year. He stated that DHSS advanced the proposal to have a
one-time rate increase, rightsize DAPH, and put a methodology in
place to propose future rate increases based on SSA benefits,
thereby avoiding multiple hard conversations but knowing that
the payment assistance program exists to protect all Alaskans 65
and older. He said that the governor and the administration is
committed to following the statute prohibiting any resident from
being evicted and ensuring that funds would be available.
REPRESENTATIVE WOOL mentioned the sticker shock, resident
expectations, and the possibility of a person needing to
liquidate all his/her assets. He referred to the possibility of
different rates for new residents versus someone grandfathered
in. He acknowledged that even though no one will be evicted,
the proposal causes residents stress.
MR. LASLEY agreed that it is a tough conversation to have. He
stated that for individuals moving into APH, it is their last
home, and they have been moving in at higher ages. He mentioned
that some come in at the lowest level of care and within a month
they have advanced to the higher level of care costing $6,700.
He said that it is a hard transition as individuals age in
place; the average age in the home is 87; over 50 percent are at
the highest level of care; most individuals expend their
resources at a rapid rate. If individuals at the higher level
of care meet resource and medical need requirements, they would
qualify for the Medicaid waiver. He mentioned the Miller Trust,
a qualifying income trust, into which an individual can put
resources, and those funds would pay the state what it had
subsidized through the Medicaid Waiver program.
CO-CHAIR KREISS-TOMKINS stated HB 96 would be held over.
4:08:52 PM
The committee took an at-ease from 4:09 p.m. to 4:14 p.m.
[During the at-ease, Co-Chair Kreiss-Tomkins passed the gavel to
Co-Chair Fields.]
HB 71-STATE PERSONNEL ACT: VETERANS' EXPERIENCE
4:14:20 PM
CO-CHAIR FIELDS announced that the next order of business would
be HOUSE BILL NO. 71, "An Act relating to hiring for positions
in state service based on substitution of military work
experience or training for required civilian work experience or
training."
4:14:43 PM
REPRESENTATIVE STORY, prime sponsor of HB 71, relayed that the
proposed legislation would allow work experience gained in the
military to be used when applying for jobs with the State of
Alaska. She paraphrased from the sponsor statement, included in
the committee packet, which read:
Members of the military bravely serve our nation and
protect our nation's values around the world. The
rigors of the battlefield can be immense, yet the
transition back to civilian life often proves to be
another battle. In a 2012 survey, two-thirds of
veterans named finding a job as the greatest challenge
in transition from military to civilian life.
House Bill 71 attempts to ease this transition by
allowing veterans, former prisoners of war or members
of the national guard to substitute documented
military experience for published minimum
qualifications for state classified positions.
Numerous states, including Alaska, provide veterans
hiring benefits and employment preferences; House Bill
71 would provide additional support to our veterans by
allowing their previous military work experience to
carry over into the civilian world.
Allowing the use of military experience for state job
qualifications is currently allowed in Alaska's
personnel policy. House Bill 71 would enshrine this
current practice into law, ensuring those who have
sacrificed for our nation will have better access to
employment irrespective of changes in administrations.
REPRESENTATIVE STORY added that in the 15 years that she served
on the [Juneau] School District Board of Education, there were
five leadership changes. Even though the board had policies and
practices, leadership changes often disrupted following them;
the proposed legislation would put the practices into statute.
She continued by saying that an additional benefit would be
raising awareness among veterans that their military experience
can be used when applying for state jobs. State hiring
personnel would know to count military work experience when
evaluating veterans and other members of the military for state
positions.
REPRESENTATIVE STORY mentioned that the proposed legislation was
introduced during the Thirtieth Alaska State Legislature, 2017-
2018, by former Representative Justin Parish and passed the
House unanimously. She expressed her belief that HB 71 is
worthwhile legislation, has value, and should be enacted into
law.
4:17:51 PM
REPRESENTATIVE VANCE asked for an example of how HB 71 would
benefit the workforce beyond the practices currently in place.
4:18:10 PM
GREG SMITH, Staff, Representative Andi Story, Alaska State
Legislature, on behalf of Representative Story, prime sponsor
of HB 71, stated that the first step for applicants for state
employment is demonstrating that they meet minimum
qualifications, such as holding a [General Education Development
(GED) - High School Equivalency Certificate], a college diploma,
a commercial driver's license (CDL), or a nursing degree. The
proposed legislation would allow experience gained in the
military to be used to meet those minimum qualifications. He
gave an example: for a procurement specialist the minimum
qualifications include a year of procurement experience, writing
or approving solicitations, explaining contracting requirements,
and developing or proving product specifications. He reiterated
that the proposed legislation would enshrine in statute that
such experience in the military would count toward the minimum
qualifications for a state position.
REPRESENTATIVE VANCE asked for the reason the practice needs to
be enshrined in statute when it is in the standard operating
procedure (SOP).
MR. SMITH stated that statute is more fixed than policy; changes
in administration cause policies to change. He reiterated that
there is an awareness component; veterans and those involved in
the hiring process would know for certain that the military
experience counts when applying for state positions.
REPRESENTATIVE SHAW gave examples in which veterans could use
their work experience to transition into a position: "Troops to
Teachers" is a program allowing an individual with 20 years of
military service, who is at the conclusion of a degree program,
to enter a classroom, initiate student teaching, finish his/her
degree, and become a teacher. In the military there are
individuals in the Supply Corps or under the Judge Advocate
program who are lawyers or legal assistants. He maintained that
there are many positions in the military with vast amounts of
experience that could transition easily into a state position.
He asserted that the value that veterans bring to the state
workforce is huge; this practice being enshrined in statute
rather than policy, would make a difference and would allow it
to exist in perpetuity.
REPRESENTATIVE FIELDS offered that as a practical reality, the
Department of Defense (DoD) has substantially invested in
personnel to assist with transitioning military service members;
with the practice put into statute, DoD staff who work with
those finishing their service in Alaska would be able to
reference statute as a clear indicator of the great opportunity
to enter state service. He stated that there are also private
sector transition programs; some unions promote the Helmet to
Hardhats program. He said that the advantage of the statutory
language under the proposed legislation is that it would make it
easier for the state to benefit from a veteran's service and
previous experience by welcoming him/her to its workforce.
4:23:08 PM
REPRESENTATIVE WOOL mentioned that regulations are enshrined and
followed; they are not tenuous.
REPRESENTATIVE STORY responded that there have been reported
incidences in which policy was not followed and using military
experience for employment became difficult. She offered that
the bill was introduced to put the practice into statute to
ensure the policy would be followed.
CO-CHAIR FIELDS stated that HB 71 would be held over.
4:24:40 PM
The committee took an at-ease from 4:25 p.m. to 4:26 p.m.
HB 31-APPROP: EARNINGS RESERVE TO PERM FUND
4:26:06 PM
CO-CHAIR FIELDS announced that the final order of business would
be HOUSE BILL NO. 31, "An Act making a special appropriation to
the Alaska permanent fund; and providing for an effective date."
4:26:08 PM
CO-CHAIR KREISS-TOMKINS, as prime sponsor, relayed that HB 31 is
identical to an amendment to the operating budget [introduced
during the Thirtieth Alaska State Legislature, 2017-2018] with
ten co-sponsors from both caucuses and both political parties;
however, it was never put to a vote on the House floor. He
maintained that the impetus for the amendment is greater
currently than last year.
CO-CHAIR KREISS-TOMKINS relayed that he joined the Alaska State
Legislature in 2013; that year was the first in some time that
Alaska had a budget deficit. In the ensuing years, the state
had a multibillion-dollar deficit, cut spending slightly, did
not raise revenues, and spent down $14 billion in savings. He
referred to a PowerPoint presentation on HB 31, slide 1,
entitled "If the deficits continue, the CBR is most likely
gone." The chart on the slide demonstrates by bar graph the
decline in the funds over the years, 2014-2019. He expressed
that these actions have been immensely frustrating to him,
especially considering the earning potential of the $14 billion.
He maintained that regardless of one's views on permanent fund
dividends (PFD) payments and level of state services, Alaska
would be in a better position if it had invested that amount.
CO-CHAIR KREISS-TOMKINS stated that there is still a budget
deficit. There are many competing visions for Alaska regarding
PFD payments and public services. The impetus of HB 31 is to
ensure that Alaska's intergenerational financial assets and the
permanent fund itself are protected from the "tugging and
pulling" of the political priorities for spending. He expressed
his grave concern that the legislature, which has spent $14
billion in the past 4-5 years, is equally capable of spending
down some fraction of the $17 billion in the Earnings Reserve
Account (ERA) over the coming years, if the political climate
was conducive to doing so. He maintained that he is cautiously
optimistic that this would not happen during the current
legislative session; however, he is concerned about it happening
in future years. He offered that spending the account down in
an unsustainable manner, that is, spending faster than the
permanent fund is generating earnings, is the most perilous and
concerning outcome as far as bankrupting the future of the
state.
4:30:53 PM
KEVIN MCGOWAN, Staff, Representative Jonathan Kreiss-Tomkins,
Alaska State Legislature, on behalf of Representative Kreiss-
Tomkins, prime sponsor of HB 31, referred to slide 2 of the
PowerPoint presentation, entitled "Permanent Fund Account
Structure," which illustrates the two accounts of the permanent
fund - the Principal and the ERA. The Principal is a
constitutionally established and permanently protected savings
account that can never be spent. The ERA is available for
appropriation by a simple majority of the legislature.
MR. MCGOWAN moved on to slide 3, to discuss the calculation used
last year [2018] in determining the amount needed in the ERA to
maintain the percent of market value (POMV) annual draws. He
said that under Senate Bill 26 [passed during the Thirtieth
Alaska State Legislature, 2017-2018] the formula used required
the ERA to be four times the POMV draw to maintain the ERA. A
POMV draw of $2.5 billion would require an ERA of $10 billion.
This amount would need to remain in the account in order to make
PFD payments or state service appropriations.
REPRESENTATIVE KREISS-TOMKINS explained that when the operating
budget was discussed in 2018, the minimum sufficient balance of
the ERA was viewed as a "shock absorber," because the ERA is the
account from which all PFD payments are made and - with the
passage of Senate Bill 26 - from which payments for some state
services are made. The ERA is where market risk is
consolidated, and unrealized earnings are represented. If there
is a severe market downturn or a [calamitous] geopolitical
event, the ERA could contract rapidly. Even though $2.5 billion
may be all that is needed annually, having four times more
provides the buffer to absorb financial shocks.
REPRESENTATIVE LEDOUX asked what the benefit of HB 31 would be
as opposed to the constitutional amendment that has been
proposed creating a spending cap.
REPRESENTATIVE KREISS-TOMKINS replied that although the two are
interrelated, the proposal under HB 31 - moving funds from the
ERA into the Principal - does not mention how much or how little
spending is appropriate.
REPRESENTATIVE LEDOUX maintained that, in effect, it does limit
the amount which can be expended.
REPRESENTATIVE KREISS-TOMKINS agreed. He said that if there was
a constitutional spending cap in place - like what [Governor
Michael J. Dunleavy] has proposed or the Senate of the Thirtieth
Alaska State Legislature proposed, there would be certain
enhanced levels created for the permanent fund. He said that if
the spending cap were in excess of state revenues, "it would
help but it wouldn't entirely solve it depending on what the
spending cap ultimately was." He added that there is another
political consideration: the spending cap may not pass in the
legislature; passing a spending cap constitutional amendment
requires a high threshold - two-thirds of each body. He
believes that there are more permanent fixes for protecting the
state's assets, but currently, there is a great deal of money in
the ERA that could be liquidated [by the legislature]. The
proposed legislation offers a short-term ability to put some
money into savings.
4:36:47 PM
REPRESENTATIVE STORY opined that HB 31 appears to provide
inflation proofing. She asked what the state is currently doing
to inflation proof the fund and what the state's history is on
inflation proofing.
REPRESENTATIVE KREISS-TOMKINS said that currently inflation
proofing under the statutory formula is about $1 billion. He
stated that the amount of money that HB 31 would transfer - $5.5
billion - is like an inflation proofing amount. He mentioned
that under present market conditions, the transfer could be as
large as $7 billion; the ERA amount this year is larger than
last year when a transfer was considered under the operating
budget. He maintained that the amount that would be transferred
under HB 31 is very similar in principle to inflation proofing;
however, because the legislature has failed to inflation proof
in a couple previous years, because there is a bull market, and
because the ERA has rapidly grown, even inflation proofing like
has been done in the past would not move the excess money from
the ERA.
4:38:37 PM
REPRESENTATIVE VANCE relayed that Representative Kreiss-
Tomkins's presentation sounds like he supports protecting the
states funds from excessive spending by balancing the budget.
She mentioned that the legislature has rapidly spent $14
billion; however, there continues to be spending, and one way to
avoid that is to reduce spending. She expressed her concern
that the intent of HB 31 - moving funds from the ERA - is to
remove it from the conversation regarding restoring the PFD
payments of the past few years. She maintained that the 2018
elections demonstrate that Alaskans want to be part of that
conversation. She stated that her constituents support having a
conversation about restoring the PFD payments that were not
fully paid, and not moving the excess ERA money into the
[Principal]. She maintained that her constituents have not had
the opportunity to have this conversation.
REPRESENTATIVE KREISS-TOMKINS responded that he has a deep
cynicism about legislature's ability to restrain its spending.
He suggested that he and Representative Vance have different
perspectives about the solution. He mentioned that his first
two years in office were under a Republican administration and
Republican majorities in both chambers of the legislature, and
the savings were liquidated. He stated that his solution would
have been to cut spending a little and raise revenues; there was
a small cut in spending and no new revenues. He continued by
saying that in subsequent years there was mixed political
control. He opined that to some extent political control does
not matter; the state has not been able to sustainably balance
its budget. He maintained that the state is closer to balancing
its budget than ever before; however, until the state can
balance its budget, there is a lot of risk with large amounts of
money available for appropriation, especially when only a simple
majority vote of 21-11 is required.
CO-CHAIR KREISS-TOMKINS offered that regarding the backpay of
PFDs, it never occurred to him before Representative Vance asked
the question that HB 31 would be considered a way to preempt the
ability to do that. He maintained that the proposal [under HB
31] was first introduced last year before there was public
dialogue on backpay of the PFDs. He added that there were
concerns voiced during the previous administration that the
funds would be spent down to pay for the natural gas pipeline;
another time it could be another project that people supported.
He said that such proposals are concerning; for example,
building a giant bridge from Baranof Island to Admiralty Island
would be a multi-billion-dollar project and a tremendous waste
of state money. He asserted that Alaska should spend within
its means and have a balanced budget; having a great deal of
available funds presents risks.
4:43:19 PM
REPRESENTATIVE WOOL relayed that the argument last year is
different from the argument this year. In past years the state
drafted a budget, didn't have the revenue to pay for the budget,
and took the money out of the Constitutional Budget Reserve Fund
(CBRF). The CBRF represented a liquid savings account that was
easy to access. He said that currently the state has a
structured draw out of the entirety of the permanent fund;
therefore, the revenue - from the draw and the other revenues,
such as oil taxes - could pay for the budget. He suggested that
the intent of HB 31 is to protect against the draw on the ERA
outside of the structure.
REPRESENTATIVE KREISS-TOMKINS answered, "Effectively, yes." He
said that if the legislature had forever abided by the framework
of Senate Bill 26 and never drew from the Permanent Fund greater
than 5 percent of the permanent fund's market value, there would
effectively be no risk of unsustainably spending down the real
fund of the Permanent Fund. It is possible that should
political or economic conditions shift, there may be a situation
in which the legislature would want to draw greater than a
sustainable amount from the Permanent Fund as set forth in
Senate Bill 26, regardless of how the money is spent. He
maintained that HB 31 would control for that risk.
REPRESENTATIVE LEDOUX asked if HB 31 would have the effect of
avoiding a three-quarter vote [of the legislature] to draw money
from the CBR. She suggested that if the ERA were below a
certain amount, a three-quarter vote would not be needed to draw
from the CBR.
4:47:21 PM
ANGELA RODELL, Chief Executive Officer, Alaska Permanent Fund
Corporation (APFC), answered that traditionally there has been
language associated with the CBR that if the level of total
savings of the state reaches a certain threshold then the need
to repay the CBR is negated. She added that she did not know
what the threshold was but currently there is a repayment
obligation for the CBR for the current balance.
REPRESENTATIVE LEDOUX stated that her concern was not with the
necessity of repaying the CBR; her recollection is that if the
amount of money in ERA is less than a certain amount, than the
requirement for a three-quarter vote to take money out of the
CBR would be negated.
4:49:14 PM
ALEXI PAINTER, Fiscal Analyst, Legislative Finance Division,
stated that under the constitution, the CBR can be accessed by a
simple majority vote, if the amount available for appropriation
is less than the previous year's budget. He said that the
courts have interpreted that to include the ERA as the amount
available for appropriation; it also includes that current
year's revenue. For fiscal year 2020 (FY 20), the current
year's revenue is about $2.5 billion in traditional revenue and
$2.7 billion from the permanent fund. In order to access the
CBR with a simple majority vote, the balance in the ERA would
have to be under $1 billion, requiring a $17.5 billion transfer;
currently the amount is far too small for that to occur.
MS. RODELL, in answer to Representative Story, said that the
original legislation 40 years ago included inflation proofing as
a second draw after the draw for PFD payments. The [inflation
proofing] calculation is based on consumer price index (CPI).
Each year there has been an appropriation for inflation proofing
up until 2010; that year the appropriation was zero because
inflation was zero. The calculation is based on the most recent
calendar year's CPI and is calculated off the balance in the
Principal of the [permanent fund] account only; therefore, it is
not calculated on the total of the Principal plus the ERA. She
said that in FY 16, FY 17, and FY 18, the decision was made to
not appropriate for inflation in any of those three years; that
amount would have totaled $1.4 billion had those appropriations
occurred. An appropriation was included in the FY 19 budget;
that money will be moved at the conclusion of the fiscal year
once Alaska has received all the royalties into the Principal
and APFC is able to do the calculation. She added that this
usually occurs in July of every year; the amount is estimated to
be about $942 million. She continued by saying that in the FY
20 budget proposal, there is an estimated inflation proofing
calculation of about $982 million.
CO-CHAIR FIELDS asked for the amount each $1 billion earns
Alaska on average per year; that is, what earning opportunity is
lost for each $1 billion that Alaska spends down.
MS. RODELL replied that since inception 40 years ago, the
earning rate has been 8.9 percent; rounded up to 9 percent, the
amount lost would be about $90 million.
CO-CHAIR FIELDS stated that HB 31 would be held over.
4:53:43 PM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 4:55
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB096 Bill Version A 3.25.19.PDF |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Sponsor Statement 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SFIN 3/9/2020 9:00:00 AM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Sectional Analysis 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Fiscal Note DHSS-APHPA 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Fiscal Note DHSS-PH 3.26.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document Alaska Pioneer Homes Advisory Board Report 2018 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document Consumer Price Index in AK Statutes 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document-PPT Presentation 3.5.19 HSS Finance Subcommittee, 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document DHSS Budget Subcommittee Amendment No. 1 PASSED 3.26.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Letters of Support 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB096 Supporting Document AK Dept of Labor Consumer Price Index 2018 3.25.19.pdf |
HHSS 4/9/2019 3:00:00 PM HHSS 4/23/2019 3:00:00 PM HSTA 3/26/2019 3:00:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB071 ver A 3.19.19.PDF |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB071 Sponsor Statement 3.19.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB071 Minimum Qualifications SOP04 3.19.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB071 DOA Fiscal Note 3.19.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB031 ver U 3.25.18.PDF |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |
| HB031 Sponsor Statement 3.25.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |
| HB031 Sectional Analysis ver U 3.25.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |
| HB031 Presentation 3.26.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |
| HB071 Supporting Document - Letter of Support 3.28.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 71 |
| HB031 Opposing Document - Letter in Opposition 4.24.19.pdf |
HSTA 3/26/2019 3:00:00 PM |
HB 31 |