Legislature(2001 - 2002)

02/26/2002 09:17 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                         February 26, 2002                                                                                    
                              9:17 AM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-02 # 17,  Side A                                                                                                            
SFC 02 # 17,  Side B                                                                                                            
SFC 02 # 18,  Side A                                                                                                            
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Pete  Kelly convened the meeting at approximately  9:17 AM.                                                            
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Dave Donley, Co-Chair                                                                                                   
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Jerry Ward, Vice Chair                                                                                                  
Senator Loren Leman                                                                                                             
Senator Lyda Green                                                                                                              
Senator Gary Wilken                                                                                                             
Senator Alan Austerman                                                                                                          
Senator Lyman Hoffman                                                                                                           
Senator Donald Olson                                                                                                            
                                                                                                                                
Also Attending:   SKIFF LOBAUGH, Human  Resource Manager,  Personnel                                                          
Office,  Legislative Administrative  Services,  Legislative  Affairs                                                            
Agency;  BARBARA  CRAVER,   Attorney,  Legislative  Legal   Counsel,                                                            
Legislative  Legal   and  Research  Services,  Legislative   Affairs                                                            
Agency;  ANNALEE  MCCONNELL,  Director,  Office  of  Management  and                                                            
Budget,  Office   of  the  Governor;  CANDACE  BROWER,  Legislative                                                             
Liaison, Office of the Commissioner, Department of Corrections;                                                                 
                                                                                                                                
Attending via  Teleconference:  From Nome: JOE MASON,  University of                                                          
Alaska-Fairbanks,  Northwest  Campus; From  Anchorage: ROSE  MUNAFO,                                                            
Criminal   Justice    Planner,   Inmate   Programs,    Division   of                                                            
Institutions,  Department  of Corrections;  BRUCE RICHARDS,  Special                                                            
Assistant,  Office of the Commissioner,  Department of Corrections;                                                             
ROBERT BUTTCANE,  Legislative and  Administrative Liaison,  Division                                                            
of Juvenile Justice, Department of Health and Social Services.                                                                  
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SCR 29-HIRING FREEZE                                                                                                            
                                                                                                                                
The Committee  heard  from the  Legislative Affairs  Agency and  the                                                            
Office of Management and Budget. The bill was held in Committee.                                                                
                                                                                                                                
SB 223-PRISONERS:PAROLE/GOOD TIME                                                                                               
                                                                                                                                
The Committee  heard from the sponsor, the University  of Alaska and                                                            
the Department of Corrections. The bill was held in Committee.                                                                  
                                                                                                                                
SB  97-PROBATION AND PAROLE FEES                                                                                                
                                                                                                                                
The Committee heard from  the sponsor, the Department of Corrections                                                            
and the Department of Health  and Social Services. The bill was held                                                            
in Committee.                                                                                                                   
                                                                                                                                
                                                                                                                                
     SENATE CONCURRENT RESOLUTION NO. 29                                                                                        
     Relating to urging the Governor to institute a hiring freeze                                                               
     on state government.                                                                                                       
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Kelly  opined that when requesting  a hiring freeze,  there                                                            
are complexities  to the  issue that are  not immediately  apparent.                                                            
Therefore, he requested  the Division of Legal and Research Services                                                            
and the Division of Personnel to comment on the matter.                                                                         
                                                                                                                                
SKIFF   LOBAUGH,   Human   Resource   Manager,   Personnel   Office,                                                            
Legislative  Administrative  Services, Legislative  Affairs  Agency,                                                            
testified that  it is common for managers to assist  with the duties                                                            
of other positions  during a temporary  hiring freeze. He  told of a                                                            
disadvantage  in that if  this practice continued  over a length  of                                                            
time,  managerial positions  could change.  He spoke  of Fair  Labor                                                            
Standards and  job classifications and the percentage  of time spent                                                            
performing  clerical duties,  which  could make  a manager  employee                                                            
eligible for overtime compensation.                                                                                             
                                                                                                                                
Co-Chair  Kelly  asked the  specific  percentage  of time  spent  on                                                            
clerical  duties  whereby  the  position  is  no  longer  considered                                                            
professional and exempt from Fair Labor Standards.                                                                              
                                                                                                                                
BARBARA  CRAVER, Attorney,  Legislative Legal  Counsel, Legislative                                                             
Legal and Research  Services, Legislative Affairs  Agency, testified                                                            
the amount  is established  in  case law  and is between  20 and  50                                                            
percent.  She stressed the  issue is that  an employee's job  duties                                                            
regularly   involve  nonprofessional   duties,   the  status   as  a                                                            
profession could be lost  and the position could subsequently become                                                            
subject to overtime compensation.                                                                                               
                                                                                                                                
Co-Chair  Kelly   commented  that   becoming  liable  for   overtime                                                            
compensation for managers  could defeat the cost saving purpose of a                                                            
hiring freeze.                                                                                                                  
                                                                                                                                
Co-Chair Kelly pointed  out that if this resolution were passed, the                                                            
Executive  Branch is  not required  to implement  it because  of the                                                            
Separation  of  Powers.  He  referenced  another  Senate  resolution                                                            
relating to a  constitutional amendment to allow the  Legislature to                                                            
enact  a hiring  freeze,  which is  currently  in the  Senate  State                                                            
Affairs Committee.                                                                                                              
                                                                                                                                
Ms. Craver replied  that if the Administration decided  to institute                                                            
a hiring freeze,  a number of statutory changes would  be necessary,                                                            
although these could be temporary.                                                                                              
                                                                                                                                
Senator Wilken  referenced page 1,  line 8 and 9 of the resolution,                                                             
which reads as follows.                                                                                                         
                                                                                                                                
          WHEREAS the proposed fiscal year 2003 budget contains an                                                              
     increase of 858 full-time positions from the current fiscal                                                                
     year, at a cost of $115,000,000; and                                                                                       
                                                                                                                                
Senator  Wilken asked  if these  positions are  funded with  general                                                            
funds.                                                                                                                          
                                                                                                                                
Co-Chair  Kelly stated that  not all the  positions would be  funded                                                            
with general funds.                                                                                                             
                                                                                                                                
Senator  Wilken  suggested  the funding  sources  of  the  positions                                                            
should be clarified.                                                                                                            
                                                                                                                                
Senator  Austerman  asked  if  those  positions  funded  from  other                                                            
sources require  general funds for  medical and retirement  benefits                                                            
packages and whether this cost is reflected in the $1.5 million.                                                                
                                                                                                                                
Co-Chair Kelly stressed  this resolution is not intended to "beat up                                                            
on the Governor".  He noted that the  increased number of  positions                                                            
is  partially  because  of legislative  action.  She  requested  Ms.                                                            
McConnell   address  Senator   Wilken's  and   Senator  Austerman's                                                             
questions in her testimony.                                                                                                     
                                                                                                                                
ANNALEE  MCCONNELL,  Director,  Office  of  Management  and  Budget,                                                            
Office of the  Governor, spoke to the purpose of a  hiring freeze at                                                            
this  time. She  surmised  that  some feel  that  before  additional                                                            
revenue sources could be  considered, it must be demonstrated to the                                                            
public that existing  resources are utilized wisely.  She referenced                                                            
the  hiring  freeze  instituted  in  Alaska  in 1999  because  of  a                                                            
significant reduction  in oil prices, and hiring freezes  instituted                                                            
in other  states experiencing  "emergency  situations" caused  by "a                                                            
sudden precipitous drop  in their revenues." By contrast, she stated                                                            
the situation  currently  in Alaska  has been known  for some  time,                                                            
which is the  need to address the  fiscal gap with both budget  cuts                                                            
and revenue measures.                                                                                                           
                                                                                                                                
Ms. McConnell  said the question  is whether  a hiring freeze  would                                                            
provide  "good  cost control"  and  also  whether it  would  provide                                                            
assurance to the public.                                                                                                        
                                                                                                                                
Ms. McConnell addressed  the cost control issue, saying there is not                                                            
a surplus  of state  employees who  are not performing  any  work or                                                            
important work. She stated  that five years of budget reductions and                                                            
a  past   hiring   freeze  has   "concentrated   the  effort   quite                                                            
significantly" and forced  many agencies to determine how to perform                                                            
necessary functions with fewer people.                                                                                          
                                                                                                                                
Co-Chair Donley  asked how many state employees were  released "non-                                                            
voluntarily" i.e. were fired.                                                                                                   
                                                                                                                                
Ms. McConnell did not have that information.                                                                                    
                                                                                                                                
Co-Chair  Donley requested  examples  of how  the Administration  is                                                            
attaining efficiency, whether through job reassignments, etc.                                                                   
                                                                                                                                
Ms. McConnell replied there  have been several consolidations within                                                            
departments,  such as the  Tax Division,  which performs with  fewer                                                            
managers  and the  Department of  Labor and  Workforce Development,                                                             
which has instituted cross training of inspectors.                                                                              
                                                                                                                                
Ms. McConnell  asserted a  hiring freeze  does not guarantee  budget                                                            
reductions  in specific  areas. She  noted this  resolution  exempts                                                            
those positions related  to health and safety. She commented it must                                                            
then be determined  what constitutes  health and safety.  She listed                                                            
Alaska State  Troopers and the necessary  administrative  support in                                                            
the crime lab, investigations and payroll.                                                                                      
                                                                                                                                
Co-Chair Kelly asked if there have been lay-offs.                                                                               
                                                                                                                                
Co-Chair  Donley said  the case  has been argued  that efficiencies                                                             
have been  made that  that the  state needs  every person  currently                                                            
employed. He asked  the number of employees dismissed  over the past                                                            
year to "maximize the productivity of the workforce".                                                                           
                                                                                                                                
Ms.  McConnell spoke  to  difficulties  due to  position  vacancies,                                                            
which she said she would address later in her testimony.                                                                        
                                                                                                                                
Ms. McConnell  informed that paying  overtime to existing  employees                                                            
is more  expensive then  hiring new  employees. She  told of  the 55                                                            
correctional  officer vacancies  in the  Department of Corrections,                                                             
the  15 percent  vacancy  rate  in probation  officers,  17  medical                                                            
positions   and  five  percent  vacancy   rate  for  administrative                                                             
positions. She stressed  that the administrative staff "has not kept                                                            
pace"  with the  overall  growth of  the  number of  prisoners.  The                                                            
Department  of Law,  she continued,  has had a  39 percent  turnover                                                            
rate in the Criminal Division  since January 1, 2000. She emphasized                                                            
that a hiring  freeze would impact the Department's  ability to hire                                                            
graduates  in the fall, when  most are hired.  She also reminded  of                                                            
difficulties in hiring  and retaining nurses. In addition, she noted                                                            
the Legislature approved  funding for a new hearing officer position                                                            
in the Department of Labor  and Workforce Development to address the                                                            
backlog of Workers  Compensation Claims. However,  she informed that                                                            
another  hiring  officer position  has  been  vacated  and a  hiring                                                            
freeze  instituted  at this  time  would negate  the  effect of  the                                                            
additional position.                                                                                                            
                                                                                                                                
She also  pointed out that  new employees  require a period  of time                                                            
before they  are able to  fully complete their  duties and  that the                                                            
impact of a  hiring freeze would be  realized in future delivery  of                                                            
services as well as in the short term.                                                                                          
                                                                                                                                
Ms.  McConnell   spoke  to  the  complex  matter  of   general  fund                                                            
positions.  She  told of  a general  funded  position  in the  Labor                                                            
Market Information Section  of the Department of Labor and Workforce                                                            
Development, which generates over $550,000,000 federal funds.                                                                   
                                                                                                                                
Ms. McConnell next addressed  public perception and the difficulties                                                            
experienced  during the past hiring  freeze when non-general  funded                                                            
positions  continued  to be  advertised.  She stated  it  is also  a                                                            
misperception as to the importance of general funded positions.                                                                 
                                                                                                                                
Ms.  McConnell  asserted  Alaska  has  instituted  budget  reduction                                                            
measures before  many of the states  that are currently instituting                                                             
hiring  freezes.  She  suggested  the  Legislature   could  identify                                                            
functions  and  modify  statutes  to reduce  the  level  of  certain                                                            
services.                                                                                                                       
                                                                                                                                
Ms. McConnell  reminded  of the  FY 02 budget  Conference  Committee                                                            
intent that although funds  would be approved for various increases,                                                            
the  total position  count  would  not be  adjusted.  She said  this                                                            
decision required  the additional  positions to be accounted  in the                                                            
FY 03 Governor's budget.                                                                                                        
                                                                                                                                
Ms.  McConnell  referenced  a handout:  Understanding  the  FY  2003                                                            
Budget, Analysis of Position  Changes [copy on file], which she said                                                            
addresses  the  questions  raised  by  Senator  Wilken  and  Senator                                                            
Austerman.  She pointed out  that the aforementioned  figure  of 858                                                            
new positions is inaccurate  because it "disregarded" many positions                                                            
although funds  had been approved  by the Legislature. She  informed                                                            
that  of the  536 new  positions included  the  Governor's  proposed                                                            
budget, 116 are either  federally funded or self-supporting. Another                                                            
75  of  those  positions,  she  said,  were  previously   part  time                                                            
positions;  12  new   positions  are  for  programs  or   facilities                                                            
previously approved by  the Legislature; and 29 new positions in the                                                            
Governor's Oil Safety and  Development Initiative are to address the                                                            
aging pipeline  and other oil and  gas facilities and to  streamline                                                            
the  permitting  process.  She  continued   that  11  new  positions                                                            
proposed for the Department  of Corrections are intended to meet the                                                            
increase probation officer and child protection caseloads.                                                                      
                                                                                                                                
Ms.  McConnell  remarked   that  the  Administration   continues  to                                                            
recognize that  there is a need to assure the public  that funds are                                                            
spent wisely.  However, she asserted  that the "primary issue  right                                                            
now is addressing the revenue side of the equation."                                                                            
                                                                                                                                
Co-Chair Kelly  referenced a conversation  held in Committee  a week                                                            
prior relating  to the specifics of the budget and  the difficulties                                                            
for the Legislature  at finding efficiencies. He commented  that the                                                            
same applies to  a hiring freeze. He stated he would  not presume to                                                            
tell the  Governor the  best method  to implement  a hiring  freeze.                                                            
However, he hoped to enter a dialog on the matter.                                                                              
                                                                                                                                
Co-Chair  Kelly stressed the  number of positions  has increased  by                                                            
1,200 since 1995. He qualified  he did not dispute the importance of                                                            
many of these  positions and noted that some of these  positions are                                                            
the result  of legislative  action. Regardless,  he surmised  that a                                                            
hiring freeze is a common  sense response to a growing government in                                                            
times of  a fiscal  gap. He wanted  to reach  an agreement with  the                                                            
Administration as to how  a hiring freeze could best be implemented.                                                            
                                                                                                                                
Ms. McConnell  reiterated  there is a disagreement  about whether  a                                                            
hiring freeze is the best  solution. She talked about the unfairness                                                            
of requiring  employees  funded with  general funds  to perform  the                                                            
work of one and one-half  positions while other employees working in                                                            
non-general funded  positions are not. She noted employee  contracts                                                            
prohibit this practice  and that it would be unfair to the public as                                                            
well as to employees.                                                                                                           
                                                                                                                                
Co-Chair  Kelly  did  not  disagree  and  requested   assistance  in                                                            
crafting  a  hiring  freeze  to avoid  the  problems  Ms.  McConnell                                                            
mentioned.                                                                                                                      
                                                                                                                                
Ms. McConnell asked the purpose.                                                                                                
                                                                                                                                
Co-Chair Kelly responded  the purpose would be to slow the growth of                                                            
government in  light of a $1.3 billion fiscal gap.  He asserted that                                                            
a hiring freeze  is a reasonable response of management  in times of                                                            
a  budget  shortfall.  He pointed  out  the  Governor  has  proposed                                                            
increased  spending every  year except  one, when  there has  been a                                                            
revenue shortfall.                                                                                                              
                                                                                                                                
Ms. McConnell  stressed the Legislature  has approved each  of those                                                            
budgets.   She  expressed   that  if  the   Legislature  wants   the                                                            
Administration to stop  certain functions, the statutes establishing                                                            
those services should be amended.                                                                                               
                                                                                                                                
Co-Chair Kelly  responded, "Act like  an executive," and  "take hold                                                            
of this problem and begin  to do something about it rather than just                                                            
passing out money like it's Christmastime."                                                                                     
                                                                                                                                
Ms. McConnell pointed out  many vacant positions could not be filled                                                            
because pay  scales and compensation  packages are not commensurate                                                             
with the federal government  and the private sector, or because or a                                                            
short supply in trained  workers for certain jobs. She stressed that                                                            
a hiring freeze  prohibiting the Administration from  recruiting for                                                            
these positions would compound the problem.                                                                                     
                                                                                                                                
Co-Chair Kelly  noted this resolution  is "fairly general"  and does                                                            
not restrict recruitment.                                                                                                       
                                                                                                                                
Ms. McConnell  gave an example of accounting clerk  positions, which                                                            
the  Legislature  could  determine  to  not  be  health  and  safety                                                            
related.  She warned  the system  could not  function without  basic                                                            
administrative support.                                                                                                         
                                                                                                                                
Senator Ward asked the number of new positions added since 1996.                                                                
                                                                                                                                
Ms. McConnell did not have that information.                                                                                    
                                                                                                                                
Senator Ward  wanted to know the number  of new positions  requested                                                            
since the 1999-hiring freeze.                                                                                                   
                                                                                                                                
Ms. McConnell  responded a position analysis has been  prepared each                                                            
of the  last three or four  fiscal years.  She noted some  positions                                                            
are  a result  of  federal transportation   funding and  other  non-                                                            
general fund sources.                                                                                                           
                                                                                                                                
Senator Ward  asked if since 1999  any non-essential positions  have                                                            
been added. If not, he suggested this resolution is unnecessary.                                                                
                                                                                                                                
Ms.  McConnell   remarked  the  question   is  what  positions   are                                                            
necessary,  listing correctional officers  and crime lab  staff. She                                                            
emphasized  the Legislature  and the  Executive  Branch reached  the                                                            
decisions  regarding  specific additional  positions,  jointly.  She                                                            
maintained  that the  addition  of social  workers,  and other  such                                                            
positions are necessary.                                                                                                        
                                                                                                                                
Senator  Ward  did not  disagree,  but questioned  the  addition  of                                                            
managerial positions.                                                                                                           
                                                                                                                                
Senator Hoffman  compared Alaska's approximately one  billion dollar                                                            
fiscal  gap  to  the  $1.6  billion  fiscal  gap  of  the  State  of                                                            
Washington,   noting  that  although   a  hiring  freeze   is  being                                                            
considered  for Washington,  additional  revenue  sources are  under                                                            
consideration  as well. He commented  that the deficit in  Alaska of                                                            
is more significant due to the lower population.                                                                                
                                                                                                                                
Senator Hoffman  indicated a hiring  freeze, delayed pay  raises and                                                            
other proposals are reactions  to the budget problem. He remarked he                                                            
would be more  supportive of the proposed  measures if he  were able                                                            
to "see the light at the  end of the tunnel." He explained this must                                                            
include consideration  of new revenues, rather than  only a spending                                                            
limit.                                                                                                                          
                                                                                                                                
Senator Hoffman  referenced a survey published in  the Juneau Empire                                                            
on  Monday February  25,  2002,  which indicated  broad  support  of                                                            
addressing the fiscal gap.                                                                                                      
                                                                                                                                
                                                                                                                                
SFC 02 # 17, Side B 10:04 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Senator Hoffman  warned. "We don't  have the time, Mr. Chairman,  to                                                            
be sitting around  and hoping that something big is  going to happen                                                            
out of  the blue.  We need  to be a  little bit  more active  in the                                                            
concerns of  the economy of the state  and the services that  we are                                                            
obligated to provide to the citizens of the state."                                                                             
                                                                                                                                
Ms McConnell added that  between 1990 and 1997, the Washington state                                                            
general fund budget  increased 33 percent, whereas  the general fund                                                            
budget  for Alaska  was  reduced .6  percent  during  the same  time                                                            
period. She  suggested that a hiring  freeze might be reasonable  in                                                            
Washington due to this  growth. She noted that because another state                                                            
is implementing a hiring  freeze it is not necessarily advisable for                                                            
Alaska to do likewise.                                                                                                          
                                                                                                                                
Co-Chair  Kelly agreed this  was not a valid  reason to implement  a                                                            
hiring  freeze,  but noted  it is  not  uncommon to  address  budget                                                            
shortfalls with a hiring  freeze. He asked if the witness considered                                                            
the 1999-hiring freeze successful.                                                                                              
                                                                                                                                
Ms. McConnell  responded  it  reduced the  growth in  the number  of                                                            
employees.  However,  she  stated  the  state  is  currently  having                                                            
difficulties  in  filling existing  vacancies.  She  reiterated  the                                                            
issue  regarding non-general  fund  positions that  continued  to be                                                            
advertised.                                                                                                                     
                                                                                                                                
Co-Chair Kelly  suggested that showing  that the 1999 hiring  freeze                                                            
was  unsuccessful  would  be  an  effective  argument  against  this                                                            
resolution.                                                                                                                     
                                                                                                                                
Ms. McConnell asked which  positions the Legislature could recommend                                                            
should be vacant.                                                                                                               
                                                                                                                                
Co-Chair  Kelly remarked  the issue relates  to cooperation  between                                                            
the  Legislature   and  the  Executive   Branch  in  making   budget                                                            
decisions.                                                                                                                      
                                                                                                                                
Senator  Austerman addressed  the  75 positions  changing from  part                                                            
time  to full  time  and  asked if  the  positions  were  originally                                                            
created through federal funding.                                                                                                
                                                                                                                                
Ms. McConnell answered  that in some cases three part time positions                                                            
would  be converted  into  one or  two  full time  positions;  other                                                            
changes are the result  of increased workloads.  She pointed out the                                                            
data does not report the deletion of part time positions.                                                                       
                                                                                                                                
Co-Chair  Donley remarked  the per  capita spending  argument  is an                                                            
"excuse" of  the Executive Branch  to "do nothing". He informed  the                                                            
per capita spending  of Alaska is approximately $9,000,  compared to                                                            
the state  of Hawaii with  the next highest  per capita spending  of                                                            
approximately  $5,000. He partially  attributed this to significant                                                             
oil revenues generated in the 1980s.                                                                                            
                                                                                                                                
Co-Chair Kelly noted the  Alaska Constitution requires this state to                                                            
provide more services than other states.                                                                                        
                                                                                                                                
Co-Chair Donley  agreed but stressed  Alaska spends more  per capita                                                            
on education then any state.                                                                                                    
                                                                                                                                
Senator Wilken  commented that "stealing" from "working  people" and                                                            
small businesses  as the  first step to solving  the state's  fiscal                                                            
problem, is actually an oncoming train at the end of the tunnel.                                                                
                                                                                                                                
Senator  Wilken   asked  for  reconciliation   between  the   18,300                                                            
positions listed by the  Division of Legislative Finance as approved                                                            
by the  Legislature for  FY 02,  and 19,339 positions  cited  by the                                                            
Office of the Governor.                                                                                                         
                                                                                                                                
Ms.  McConnell  explained that  although  the  Conference  Committee                                                            
authorized  funding for new  positions, the  position count  was not                                                            
increased.                                                                                                                      
                                                                                                                                
Co-Chair  Donley  again  spoke  to  the  comparison  of  per  capita                                                            
spending in the State of Washington and the State of Alaska.                                                                    
                                                                                                                                
Ms. McConnell  noted  Alaska's expenditures  are  higher because  of                                                            
constitutional  requirements.  She  stated  Alaska spends  more  for                                                            
education then  most states. She also pointed out  the unified court                                                            
system requires more state funds.                                                                                               
                                                                                                                                
Ms. McConnell compared  current per capita spending in Alaska to the                                                            
amount spent  in 1979 informing  that, adjusted  for inflation,  the                                                            
state spends $1,100  less. She agreed there were spending  increases                                                            
in the 1980s  but stressed decreases  have been made since  then and                                                            
spending  has  not  "kept  pace"  with  population   increases.  She                                                            
emphasized the question is "what is right for us today".                                                                        
                                                                                                                                
Co-Chair  Kelly  ordered  the bill  HELD  in  Committee to  await  a                                                            
constitutional amendment resolution on the same subject.                                                                        
                                                                                                                                
                                                                                                                                
      CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 223(JUD)                                                                    
     "An  Act  limiting  the  award of  good  time  and restricting                                                             
     release  on  mandatory  parole for  prisoners  serving  certain                                                            
     sentences  who  fail  to  attain  certain  minimum educational                                                             
     standards;   providing  that   prisoners  having  attained   or                                                            
     attaining those educational  standards receive good time awards                                                            
     and availability  of release  on mandatory parole of  one-third                                                            
     of  the  term or  terms  of imprisonment   rounded off  to  the                                                            
     nearest day; and providing for an effective date."                                                                         
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Donley, sponsor,  testified this  is a "familiar  concept"                                                            
that  would encourage  prisoners  who  do not  already  have a  high                                                            
school education  to obtain their General Equivalency  Diploma (GED)                                                            
while in prison. He explained  the incentive would be a reduction in                                                            
the amount of good time,  or non-discretionary parole, available. He                                                            
also  pointed  out  the  state  would   be  required  to  make  such                                                            
educational opportunities available.                                                                                            
                                                                                                                                
Co-Chair Donley  informed that Alaska  has the "most generous"  good                                                            
time provisions  in the United States, noting a person  sentenced to                                                            
ten years could be paroled  after serving 6 2/3 years. He stated the                                                            
national standard  is 85 percent compared  to 75 percent  in Alaska.                                                            
He qualified that Alaska laws are tougher for some offenses.                                                                    
                                                                                                                                
Co-Chair  Donley  summarized  the goal  of  this legislation  is  to                                                            
encourage  offenders  to  obtain  their  education.   He  referenced                                                            
studies showing  that the rate of recidivism is directly  related to                                                            
education.                                                                                                                      
                                                                                                                                
Co-Chair  Donley stated it  is reasonable  to require that  parolees                                                            
have the ability  to read and write. He said this  does not unfairly                                                            
penalize those  inmates who do not  obtain a GED because  the amount                                                            
of good  time  allowed for  their sentences  would  be the  national                                                            
average. He added that  not providing such a high level of good time                                                            
is  reasonable  because  studies show  an  increased  likelihood  of                                                            
illiterate offenders reentering the criminal justice system.                                                                    
                                                                                                                                
Co-Chair Donley noted the  State of Florida has instituted a similar                                                            
program  at an  estimated savings  of $1.9  million  due to  reduced                                                            
recidivism.  He qualified  Alaska has fewer  inmates and the  amount                                                            
would therefore be lower.                                                                                                       
                                                                                                                                
Co-Chair  Donley spoke  of  his efforts  to determine  the  savings,                                                            
which  are  not  reflected  in  the  fiscal   notes.  He  noted  the                                                            
Department  of Corrections  has attempted  to estimate  the cost  of                                                            
housing the approximately  16 inmates per year who  would not obtain                                                            
a GED. He informed  the average annual  cost per inmate is  $27,000,                                                            
which would  total approximately $400,000.  He compared this  amount                                                            
to the costs involved with  the 41 percent national re-incarceration                                                            
rate of  offenders without  a high school  education. He  calculated                                                            
that of the  111 inmates this legislation  would apply to,  less the                                                            
16 who would remain  incarcerated for a longer period,  and assuming                                                            
the six-percent  success rate experienced  in the State of  Florida,                                                            
approximately  six former  Alaska inmates would  not re-offend  as a                                                            
result of obtaining their  GED. He qualified the incarceration costs                                                            
would be higher but stressed  the cost savings of the six successful                                                            
inmates would  offset that amount.  He listed the costs of  crime to                                                            
society and  injuries to victims of  the multiple crimes  that might                                                            
be committed  before an offender is  apprehended, plus the  expenses                                                            
of the criminal justice system.                                                                                                 
                                                                                                                                
Co-Chair  Donley   stressed  the  only  reason  to   not  pass  this                                                            
legislation  is the potential  cost of inmates  remaining in  prison                                                            
longer.  However,  he  emphasized  the  possibility  of significant                                                             
savings from reduced recidivism.                                                                                                
                                                                                                                                
Co-Chair Donley  asked and answered,  "Is it the right thing  to do?                                                            
Absolutely."                                                                                                                    
                                                                                                                                
Co-Chair  Donley  asserted  educational  opportunities  as  part  of                                                            
restitution  is mandated by the state  Constitution. He noted  other                                                            
states are operating similar  programs with success. He indicated he                                                            
intended to  perform additional research  on the recidivism  rate in                                                            
Alaska  in  order to  accurately  calculate  the  potential  savings                                                            
involved.                                                                                                                       
                                                                                                                                
Co-Chair Donley stated  that withholding the permanent fund dividend                                                            
for an additional year  from those who have committed serious crime,                                                            
would "more then fund"  the additional incarceration expenses of the                                                            
inmates who  would receive  reduced good time.  He suggested  such a                                                            
proposal  could   be  incorporated  into  this  bill,   although  he                                                            
recommended separate legislation.                                                                                               
                                                                                                                                
Senator  Wilken  asked if  this  bill is  identical  to legislation                                                             
considered in a previous session.                                                                                               
                                                                                                                                
Co-Chair   Donley  answered   it  is  and   explained  the   earlier                                                            
legislation  was introduced during  a year when no legislation  with                                                            
accompanying fiscal notes was passed.                                                                                           
                                                                                                                                
Senator Green  asked for clarification of Section  2(a)(1)(A) of the                                                            
committee substitute,  which gives  exemptions to the GED  provision                                                            
for those who  already have a high  school education, are  incapable                                                            
of attaining  a diploma, do not speak  English, or are of  a certain                                                            
age or social background.                                                                                                       
                                                                                                                                
Co-Chair Donley affirmed  and noted this language is consistent with                                                            
assumptions made  by the Department of Corrections  and reflected in                                                            
an assessment contained in the fiscal note.                                                                                     
                                                                                                                                
Co-Chair  Donley explained  Section  2 and detailed  the process  of                                                            
granting good  time credit of one-third of the sentence  for inmates                                                            
who have a high  school education or are determined  to be incapable                                                            
of receiving  such. Others,  he continued,  would receive  one-sixth                                                            
good time credit unless they obtain a GED while incarcerated.                                                                   
                                                                                                                                
Senator   Hoffman  commented   the   committee   substitute  is   an                                                            
improvement over  the original bill. He spoke to the  unquantifiable                                                            
expense of  those inmates who do not  obtain a GED and subsequently                                                             
serve longer portions of  their sentences. He suggested performing a                                                            
two to  three year  demonstration  project in  a controlled  setting                                                            
before enacting  legislation  to identify  and rectify concerns.  He                                                            
agreed it has  been proven that people  with a higher education  are                                                            
less  likely to  commit crimes  and  are more  productive  citizens.                                                            
However,  he asserted  that placing  these assumptions  into law  is                                                            
excessive.                                                                                                                      
                                                                                                                                
Senator Ward  supported this  bill. He stated  that a demonstration                                                             
project has merit, although not as much merit as would a law.                                                                   
                                                                                                                                
Senator  Ward   stated  that  people   who  are  incarcerated   have                                                            
"problems"  with work  ethic and  educational  ability. He  asserted                                                            
that an overriding  factor for a prisoner is "how  much time do they                                                            
have; when  can they  get out." He  stated that  a vast majority  of                                                            
inmates perform  certain actions if they know doing  so could reduce                                                            
the length of their stay.                                                                                                       
                                                                                                                                
Senator  Ward  told  of  inmates  he  has  encountered  who  embrace                                                            
religion, sobriety or "anything  that the system gives them in order                                                            
to make  the system happy"  and obtain release.  He remarked  that a                                                            
benefit is that occasionally,  while "pulling this con upon society,                                                            
they get caught up in it and get better".                                                                                       
                                                                                                                                
Senator Ward expressed  this legislation addresses those inmates who                                                            
had problems  that  resulted  in them not  obtaining  a high  school                                                            
education.  He commented  that  many of  these people  are  "getting                                                            
through life because  they have wits, they are very  smart, but they                                                            
don't have the foundation  and the ability." He said these people do                                                            
not want others  to know that they are unable to read  and that this                                                            
is one reason they "turn to crime".                                                                                             
                                                                                                                                
Senator  Ward  predicted  that  if  education  were  offered  as  an                                                            
incentive, those inmates  would "come to the table" even if it means                                                            
admitting  they are  unable  to read  well or  perform mathematical                                                             
functions.                                                                                                                      
                                                                                                                                
JOE  MASON,  University   of  Alaska-Fairbanks,  Northwest   Campus,                                                            
testified via  teleconference from  Nome in support of the  bill and                                                            
stressed  that statistics  prove  education reduces  recidivism.  He                                                            
told  of teaching  audio  conference  college  courses  to  students                                                            
incarcerated  at Anvil Mountain Correctional  Center and  shared the                                                            
story  of one  former  inmate  student, who  later  pursued  further                                                            
education after being released  and was voted Student of the Year at                                                            
the Northwest  Campus.  He attested  this  person today  is not  the                                                            
"anger-filled  individual" he was before receiving  an education. He                                                            
stressed   audio  conferencing   and  correspondence   courses   are                                                            
effective methods of providing education to inmates.                                                                            
                                                                                                                                
Mr. Mason suggested  that the inmates who receive  an exemption from                                                            
the GED  requirement due  to language, social,  age or intelligence                                                             
levels  should  also be  required  to pursue  and  meet "measurable                                                             
education objectives to improve their skills."                                                                                  
                                                                                                                                
ROSE MUNAFO, Criminal Justice  Planner, Inmate Programs, Division of                                                            
Institutions,    Department    of   Corrections,    testified    via                                                            
teleconference from Anchorage  that no one believes education is not                                                            
"a good thing" and that it would contribute to productivity.                                                                    
                                                                                                                                
                                                                                                                                
SFC 02 # 18, Side A 10:52 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Ms. Munafo warned  of the fiscal ramifications of  this legislation.                                                            
She stated  that in 1987 or 1988 the  budget for criminal  education                                                            
efforts was reduced by  one-half, although the inmate population has                                                            
continued  to increase  and she did  not see how  the objectives  of                                                            
this  bill  could  be  accomplished  within  the  current  level  of                                                            
funding.                                                                                                                        
                                                                                                                                
Senator Hoffman asked if the witness supports the legislation.                                                                  
                                                                                                                                
Ms.  Munafo  did  not. She  suggested  other  methods,  such  as  an                                                            
incentive provision  allowing inmates to earn additional  good time.                                                            
                                                                                                                                
Senator Hoffman  asked if the witness would endorse  a demonstration                                                            
project.                                                                                                                        
                                                                                                                                
Ms. Munafo  replied  that although  she had not  considered it,  she                                                            
would support it.                                                                                                               
                                                                                                                                
Senator Ward  asked how many prisoners  in Alaska have been  refused                                                            
an opportunity to receive a GED due to budget restraints.                                                                       
                                                                                                                                
Ms. Munafo did not know  of any although noted there is a wait list,                                                            
which varies with each institution.                                                                                             
                                                                                                                                
Senator Ward asked the average time on a wait list.                                                                             
                                                                                                                                
Ms. Munafo was unsure.                                                                                                          
                                                                                                                                
Senator  Ward  clarified  the witness'  testimony  that  because  of                                                            
budget  constraints,  this legislation  would result  in  additional                                                            
costs.  However,  understood  that  educational  opportunities  were                                                            
currently available.                                                                                                            
                                                                                                                                
BRUCE  RICHARDS,  Special Assistant,  Office  of  the Commissioner,                                                             
Department  of  Corrections,   testified  via  teleconference   from                                                            
Anchorage  that the increased  cost to the  Department would  be the                                                            
longer incarceration of those who do not obtain their GED.                                                                      
                                                                                                                                
Senator Ward  stated there would be  no increase to the cost  of the                                                            
educational program.                                                                                                            
                                                                                                                                
Mr. Richards  replied  there currently  is a wait  list and  that in                                                            
order accommodate  the additional  inmates,  funding for  additional                                                            
"contract hours" of educators would be necessary.                                                                               
                                                                                                                                
Senator  Ward  asked   if  the  witness  saw  providing   additional                                                            
educational opportunities for inmates to be "a problem".                                                                        
                                                                                                                                
Mr. Richards did not. He  preferred an incentive process of allowing                                                            
prisoners  to earn  additional good  time rather  than the  proposed                                                            
method that would remove  good time initially and require inmates to                                                            
earn  that time  back.  He understood  the system  in  the State  of                                                            
Florida provides  additional good time for those who  receive a GED,                                                            
rather than a reduction for those who do not.                                                                                   
                                                                                                                                
Senator Ward  asked if  the one-third-sentence  reduction is  not an                                                            
incentive.                                                                                                                      
                                                                                                                                
Mr. Richards responded  the one-third reduction is  already in place                                                            
and  that  making  additional   good  time  available  would  be  an                                                            
incentive and would be more appropriate.                                                                                        
                                                                                                                                
Co-Chair  Donley noted the  Executive Branch  presented this  option                                                            
when the  earlier  legislation was  considered.  He stressed  Alaska                                                            
already has  the highest good  time policy  and he argued it  is bad                                                            
public policy to release inmates earlier.                                                                                       
                                                                                                                                
Co-Chair  Donley stated  he would  support a  demonstration  project                                                            
except that one could not  be fairly implemented within the criminal                                                            
justice  system.  He  addressed  the suggestion   of a  lapse  date,                                                            
informing that  because this legislation only applies  to those with                                                            
sentences  longer then two  years and to  those sentenced after  the                                                            
effective  date of the law,  the effects would  not be apparent  for                                                            
several  years.  He  noted the  additional  expenses  would  not  be                                                            
incurred until the third  year and any savings would not occur until                                                            
the fourth year of the new program.                                                                                             
                                                                                                                                
Senator  Hoffman  commented that  adding  more available  good  time                                                            
would  allow "good  people"  who obtain  a  degree,  to be  released                                                            
earlier and  become more productive.  He surmised this would  result                                                            
in more savings.                                                                                                                
                                                                                                                                
Senator Leman  referenced the analysis  in the fiscal note  relating                                                            
to the  cost of  contractual services  to administer  the  education                                                            
program.  He asked  the current  process for  administering the  GED                                                            
examinations.                                                                                                                   
                                                                                                                                
Ms.  Munafo  explained  the fiscal  note  reflects  the anticipated                                                             
additional  testing   to  determine  an  individual's   reading  and                                                            
mathematic  level prior to enrollment  in a GED preparation  course.                                                            
She noted the  fiscal note also includes additional  "teacher time",                                                            
based on 97  students per education  provider the previous  year and                                                            
the projected 111 additional  students this legislation would incur.                                                            
                                                                                                                                
Senator  Leman  asked if  the  teachers would  utilize  an  existing                                                            
literacy program.                                                                                                               
                                                                                                                                
Ms. Munafo  replied a program  is in place  that is similar  to that                                                            
used by adult learning centers.                                                                                                 
                                                                                                                                
CANDACE  BROWER, Legislative  Liaison, Office  of the Commissioner,                                                             
Department  of Corrections  testified in Juneau,  that although  the                                                            
Department  supports  education  as part  of rehabilitation,  it  is                                                            
opposed to  the approach contained  in this legislation.  She stated                                                            
the   Department   currently    provides   successful   educational                                                             
opportunities  and encourages  inmates  to improve  themselves.  She                                                            
anticipated  less money would be appropriated  for the Department's                                                             
FY 03 budget  and stated this legislation  would increase  expenses.                                                            
She listed  the increase  of 300 additional  inmates since  one year                                                            
ago and the increase  of 919 inmates since 1996. She  attributed the                                                            
increases to statutory changes that increase sentences.                                                                         
                                                                                                                                
Ms.  Brower  cautioned  against  criminalizing  those  who  lack  an                                                            
education. She noted that  many offenders receive education while on                                                            
supervised  parole  and  she  spoke to  the  limited  resources  for                                                            
educational programs available to the Department.                                                                               
                                                                                                                                
Ms. Brower knew  of no other state that makes education  a condition                                                            
of early release, although many offer incentive programs.                                                                       
                                                                                                                                
Ms Brower informed the  GED examinations have been changed, are more                                                            
rigorous and she was unsure how inmates would perform.                                                                          
                                                                                                                                
Ms. Brower  asserted  that lowered  recidivism  is the  result  of a                                                            
number of factors, not only one program.                                                                                        
                                                                                                                                
Co-Chair Donley agreed  recidivism is complex, but stressed research                                                            
has shown the  number one factor relates to the ability  to read and                                                            
write.                                                                                                                          
                                                                                                                                
Senator  Leman did  not  want dangerous  criminals  released  early.                                                            
However, he  wanted others to repay  their debt to society  in other                                                            
ways then being incarcerated in a prison facility.                                                                              
                                                                                                                                
Co-Chair  Donley spoke  to the  argument of  positive incentive.  He                                                            
told the  history of increasing  good time  from one-quarter  of the                                                            
sentence  to one-third, reiterating  it is  the highest rate  in the                                                            
nation. He stated that  this legislation provides negative incentive                                                            
is misleading. He was more  inclined to provide additional good time                                                            
for those who  did not commit act of violence. He  noted the current                                                            
good time  was increased  to one-third was  due to difficulties  the                                                            
Department  had with  tracking  the different  amount  of good  time                                                            
available for different  inmates convicted of different offenses. He                                                            
suggested  this issue could  be revisited  to allow additional  good                                                            
time for those offenders  who did not commit a violent crime and who                                                            
received a GED during their incarceration.                                                                                      
                                                                                                                                
Co-Chair Kelly expressed support for the bill.                                                                                  
                                                                                                                                
Co-Chair  Kelly ordered  the bill  HELD in Committee  to await  data                                                            
from the  Department  of Corrections  to incorporate  into a  fiscal                                                            
note.                                                                                                                           
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 97                                                                                                         
     "An Act relating to fees for probation and parole."                                                                        
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Senator Ward  testified this bill  stipulates that probationers  and                                                            
parolees  under the jurisdiction  of the  Department of Corrections                                                             
must participate  in  their rehabilitation  by paying  a portion  of                                                            
their parole  or probation  expenses. He spoke  to the high  cost of                                                            
probation  and parole  to the government  and  stressed the  primary                                                            
purpose of  placing offenders  on probation  or parole is to  secure                                                            
employment.                                                                                                                     
                                                                                                                                
Senator  Ward  indicated  other  states  have  implemented   similar                                                            
programs. He stated it  has been shown that those affected offenders                                                            
make  the effort  to  stay employed  so  they are  able  to pay  the                                                            
necessary fees, and therefore avoiding returning to prison.                                                                     
                                                                                                                                
Senator Ward expressed  the intention is not to create a debtor jail                                                            
and  assured  this  legislation  would  not  cause  this.  He  noted                                                            
exceptions would be made for those who are unable to pay.                                                                       
                                                                                                                                
Senator Ward predicted  that despite victim's compensation and child                                                            
support payments, a significant  number of parolees and probationers                                                            
would be eligible to receive  a permanent fund dividend, which could                                                            
be  garnished  under  this  legislation  for  parole  and  probation                                                            
expenses.                                                                                                                       
                                                                                                                                
Senator Ward pointed  out that various broad based  taxes were under                                                            
consideration  in part to pay for the expenses related  to probation                                                            
and parole.                                                                                                                     
                                                                                                                                
Senator  Ward  remarked  this legislation  would  benefit  those  on                                                            
probation  and  parole.  He  stated  that  lack  of  a  job  is  one                                                            
"underlying  ill" causing  people to  commit crimes  because of  the                                                            
need  to fill  emptiness.  He commented  this legislation  offers  a                                                            
method for offenders to "earn their way back into society".                                                                     
                                                                                                                                
Senator Ward mentioned  the proposed interstate compact  relating to                                                            
monitoring   and  administering   probationers   and  parolees.   He                                                            
predicted other states would be reviewing cost options as well.                                                                 
                                                                                                                                
Senator  Ward  commented   this  program  could  be  cost-effective                                                             
provided  the collection  process is not  made burdensome  requiring                                                            
the addition of significant staff.                                                                                              
                                                                                                                                
Senator   Ward  noted  that   in  states   with  similar   programs,                                                            
probationers  and parolees who fail  to make the necessary  payments                                                            
are usually  in violation  of other conditions  of their release  as                                                            
well.                                                                                                                           
                                                                                                                                
Senator Ward  also pointed  out he proposed  this system during  the                                                            
Thirteenth Legislative Session, but was unsuccessful.                                                                           
                                                                                                                                
AT EASE 11:25 AM / 11:31 AM                                                                                                     
                                                                                                                                
BRUCE  RICHARDS,  Special Assistant,  Office  of  the Commissioner,                                                             
Department   of  Corrections  testified   via  teleconference   from                                                            
Anchorage about previous  attempts to require payments from parolees                                                            
and probationers  and  statutes to  this effect  that were in  place                                                            
from 1986 to 1991. He stated  the collection rate during that period                                                            
was  approximately   eight  percent.   He  qualified  the   proposed                                                            
legislation stipulates  collections would be performed  by a private                                                            
entity.  However,  he  informed   that  past  efforts  to  locate  a                                                            
collection agency  willing to assume these duties  were unsuccessful                                                            
because collection  agencies are "in  the business of taking  on bad                                                            
debt."  Instead, he  continued, a  local financial  institution  was                                                            
employed  to  establish  an  escrow  account  and  to  mail  monthly                                                            
statements  to  parolees  and  probationers,   but  did  not  pursue                                                            
collection of  late balances. Therefore, he stated,  the fiscal note                                                            
reflects   a   ten-percent   collection   rate  for   the   proposed                                                            
legislation.                                                                                                                    
                                                                                                                                
ROBERT BUTTCANE,  Legislative and  Administrative Liaison,  Division                                                            
of  Juvenile Justice,  Department  of  Health and  Social  Services,                                                            
testified   via  teleconference  from   Anchorage  to  explain   the                                                            
projected 80 percent collection  rate reflected in this Department's                                                            
fiscal  note.  He shared  that  in-house  discussions  were held  to                                                            
arrive at  this estimate,  that there is  no quantitative basis  for                                                            
this "subjective"  assumption and  that it is based on an  "absolute                                                            
best case scenario".  He noted the  Division has been successful  in                                                            
obtaining 87.7  percent payment rate  in court-ordered restitution.                                                             
Because  if  this,  he  said,  most  juvenile   offenders  could  be                                                            
motivated to comply with expectations imposed on them.                                                                          
                                                                                                                                
Co-Chair Donley asked Mr.  Richards the current repayment percentage                                                            
of restitution payments ordered for adult offenders.                                                                            
                                                                                                                                
Mr. Richards indicated he would provide the information.                                                                        
                                                                                                                                
Co-Chair Donley  had suggested the Department of Corrections  fiscal                                                            
note  should   indicate  that  the   number  of  new  parolees   and                                                            
probationers  affected by this legislation  would be phased  in over                                                            
several years.                                                                                                                  
                                                                                                                                
Co-Chair Kelly ordered the bill HELD in Committee.                                                                              
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Pete Kelly adjourned the meeting at 11:40 AM.                                                                          

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