Legislature(2003 - 2004)

03/04/2003 09:01 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                           JOINT MEETING                                                                                      
                     SENATE FINANCE COMMITTEE                                                                                 
                      HOUSE FINANCE COMMITTEE                                                                                 
                          March 04, 2003                                                                                      
                              9:01 AM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-03 # 14, Side A                                                                                                             
SFC 03 # 14, Side B                                                                                                             
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Lyda Green convened the meeting at approximately 9:01 AM.                                                              
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice-Chair                                                                                                   
Senator Ben Stevens                                                                                                             
Senator Donny Olson                                                                                                             
Senator Robin Taylor                                                                                                            
Senator Lyman Hoffman                                                                                                           
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Mike Hawker                                                                                                      
Representative Eric Croft                                                                                                       
Representative Reggie Joule                                                                                                     
Representative Richard Foster                                                                                                   
                                                                                                                                
Also  Attending:  SENATOR GENE  THERRIAULT;  SENATOR  GARY  STEVENS;                                                          
SENATOR TOM  WAGNER; REPRESENTATIVE  NANCY DALSTROM; REPRESENTATIVE                                                             
DAVID  GUTTENBERG;  REPRESENTATIVE  SHARON  CISSNA;  MARK  HAMILTON,                                                            
President, University of Alaska.                                                                                                
                                                                                                                                
Attending via Teleconference:  There were no teleconference                                                                   
participants.                                                                                                                   
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
                      State of our University                                                                                   
              Presentation by President Mark Hamilton                                                                           
                                                                                                                                
MARK HAMILTON, President University of Alaska presented the                                                                     
following speech [Note: name spellings are not verified].                                                                       
                                                                                                                                
     Five years ago, I  came before this body and told them a story,                                                            
     and it wasn't a good  story. University facilities were in need                                                            
     of major repair, we'd  lost a third of the student body and the                                                            
     tuition  that they contributed.  We had  reductions in  faculty                                                            
     and staff, resulting  in a loss of classes, of services, and of                                                            
     stature. There was  nothing the University could do to increase                                                            
     its own  contribution to the  budget. We couldn't even  keep up                                                            
     with inflation in light of flat funding by the State.                                                                      
                                                                                                                                
     I brought  you a simple  plan. I said  first, we need  to build                                                            
     the  talent pool  with trained  Alaskans. We  began the  Alaska                                                            
     Scholars  Program.   That  program  now  has  more  than  1,100                                                            
     students  from  the  top  ten  percent  of  our  high  schools'                                                            
     graduating classes. It's working.                                                                                          
                                                                                                                                
     We went  to work in workforce  development. With your  help and                                                            
     our  reallocation, we've  invested nearly  $6 million  over the                                                            
     last three  years in vocation  and workforce directed  programs                                                            
     aimed at keeping Alaskans in Alaskan jobs.                                                                                 
                                                                                                                                
     I'll give  you a quote from Mike Powers, the  head of Fairbanks                                                            
     Memorial Hospital.  He said, "This Spring we graduate our first                                                            
     class of  two-year RNs. It's a remarkable success  story. These                                                            
     are bright  committed engaged local employees,  all of whom own                                                            
     houses and  are part of the Fairbanks community.  We've reduced                                                            
     our  vacancy rate  by  25 percent.  Last holiday  season,  last                                                            
     December,  we had 76 open shifts because we couldn't  fill them                                                            
     with RNs. This season,  we had zero. And for that I want to say                                                            
     I'm proud  to be a partner with the University  and I'm willing                                                            
     to speak on behalf  of the Hospital putting up $100,000 for the                                                            
     next  three years  to continue  to strategically  address  this                                                            
     lack of force."                                                                                                            
                                                                                                                                
     We're going  to double our production of nurses  by 2006, going                                                            
     from 110  to 220. It's more economical for the  industry and it                                                            
     results in the employees being part of the community.                                                                      
                                                                                                                                
     Enrollment   this  year  is   up  9.6  percent.  There   is  no                                                            
     demographic explanation. This is reputation.                                                                               
                                                                                                                                
     Let me quote  from Jennifer Lesh, UA Junior in  Communications,                                                            
     a UA scholar,  a UA honor student  and our Student Legislative                                                             
     Affairs Coordinator.  She said, "After being  raised in Alaska,                                                            
     I like  most Alaskan  students, left the  State in search  of a                                                            
     great  adventure.   I've  returned  to  attend  school  at  the                                                            
     University of Alaska-Southeast  in Juneau. I feel that I have a                                                            
     stronger  community  here  and  I  know I'm  getting  a  better                                                            
     education here then  I ever would somewhere else." She's right.                                                            
                                                                                                                                
     Retention  rates  have  increased  significantly.  Compared  to                                                            
     three  years ago, there are 35  percent more students  enrolled                                                            
     in the spring semester  of their sophomore year, which is where                                                            
     we take our measurement  on retention. Thirty-five percent more                                                            
     in three years.                                                                                                            
                                                                                                                                
     Attendance  by the top ten percent of high school  graduates is                                                            
     up 350  percent since  that discussion  we had five years  ago.                                                            
     More are coming. More are staying. It's working.                                                                           
                                                                                                                                
     We told  you we will build programs  to be responsive  to state                                                            
     needs.   Working   with   industry    coalitions   in   health,                                                            
     transportation,   information  technology,  process   industry,                                                            
     fisheries  and  construction,   we've  developed  programs  for                                                            
     industry   training.  We've  expended  the  ATAP   funding  for                                                            
     vocational  workforce training  and programs identified  by the                                                            
     State  Department  of Labor and  Workforce  Development as  the                                                            
     highest demand occupations.                                                                                                
                                                                                                                                
     Recently Commonwealth  North, an Anchorage based private sector                                                            
     organization,  published a report  on the University  of Alaska                                                            
     titling  their  report, "the  University  of Alaska:  A Key  to                                                            
     Alaska's  Future, A Time  for All to  Invest." The report  is a                                                            
     strong  statement on the important  roll of the University  and                                                            
     how  it  might  play that  in  Alaska's  social,  economic  and                                                            
     cultural  development. The Commonwealth  North Group  made many                                                            
     recommendations  for improving,  enhancing;  and you will  find                                                            
     that they  are consistent with  what this body has given  me as                                                            
     directions over the last five years.                                                                                       
                                                                                                                                
     In terms  of workforce development,  let me quote from  Leo von                                                            
     Scheben,  CEO of USKH  Engineers. He said,  "I've gone  back to                                                            
     school  to improve the  strategic look  of the company."  (He's                                                            
     back for  a master's degree.)  "Our biggest challenge  has been                                                            
     in  the  HR  area, organizational   development  and  corporate                                                            
     finance.  My  participation   on  the  master's  program  [has]                                                            
     inspired  others   to follow   my lead.   USKH  encourages  its                                                            
     employees  to continue their  education, and along with  paying                                                            
     for  continuing  education,  we  also  offer  our  employees  a                                                            
     $10,000 bonus if they  complete their master's degree. Bringing                                                            
     the  University   of  Alaska  into  my  firm,   has  been  good                                                            
     business."                                                                                                                 
                                                                                                                                
     Now  Leo's been  involved  in that  business for  more than  30                                                            
     years  now.  I'll give  you  someone  who's just  started  one,                                                            
     Ginger Stock, Web  Weavers. "The University of Alaska's benefit                                                            
     to the  business community is  multi-faceted. As a UAF  grad, I                                                            
     received  a fantastic yet affordable education.  This has given                                                            
     me the power  to accomplish many things, including  the ability                                                            
     to start  a successful technology  business and the  ability to                                                            
     hire  more  graduates  from  within  the  UA  system,  who  are                                                            
     qualified  and  talented."  The University  of  Alaska is  good                                                            
     business. It's working.                                                                                                    
                                                                                                                                
     I  told  you  we'd  establish  partnership   with  schools.  In                                                            
     collaboration  with  the State  school  board,  we rebuilt  the                                                            
     teacher  education program to  require discipline-based  degree                                                            
     for all  secondary teachers,  including extensive internships.                                                             
                                                                                                                                
     We've expanded  opportunities for high school  students to take                                                            
     concurrent  courses, tech prep  and advanced placement  courses                                                            
     at the University campuses in their community.                                                                             
                                                                                                                                
     I'll give  you a quote from Gerald  Andrews, Training  Director                                                            
     of Operating Engineers,  "Since implementation of the tech prep                                                            
     partnerships  between  the University  and local high  schools,                                                            
     many  have   benefited.  Not  only  individuals   are  directly                                                            
     benefited,  we see  the State  benefit when  skilled  employees                                                            
     fortify their employers'  workforce. This is truly a system for                                                            
     lifelong  learning."  He  describes  new  programs at  UAF,  at                                                            
     Tanana  Valley  College in  welding and  diesel,  at UAA,  auto                                                            
     diesel  an apprenticeship, in  Mat-Su Borough in auto  welding,                                                            
     construction and school-to-apprenticeship programs.                                                                        
                                                                                                                                
     Doug  Ward,  Alaska  Ship  and  Dry  Dock  in  Ketchikan,  "Our                                                            
     partnership  with the University of Alaska is  essential to the                                                            
     development  of skilled shipyard  workforce in Alaska.  Working                                                            
     together,  we're developing  a workforce  structure that  meets                                                            
     our needs and national skill standards."                                                                                   
                                                                                                                                
     I think Carl  Hurford from MTA just about sums  it up. He said,                                                            
     "I've taught, I've  hired students, and I sent employees to UA.                                                            
     It's been a valuable partnership." It's working.                                                                           
                                                                                                                                
     We  said   we'd  establish  a   solid  foundation  within   the                                                            
     University again with  the hiring of faculty because everything                                                            
     starts  with faculty. The hiring  of staff, fixing of  deferred                                                            
     maintenance, construction  of instructional facilities, library                                                            
     expansions,  Brooks Building renovation, Fairbanks  Courthouse,                                                            
     UAS classroom  addition, Hutchinson  Career Center,  University                                                            
     Center.                                                                                                                    
                                                                                                                                
     And finally,  Proposition C: thank you for drafting  that. That                                                            
     approval  by  the  voters of  Alaska  has  enabled us  to  fund                                                            
     maintenance and renovation  projects in Bethel, Nome, Kotzebue,                                                            
     Ketchikan,  Sitka, Palmer,  Kenai, Dillingham,  Kodiak,  Homer,                                                            
      Valdez, Anchorage, Fairbanks and Juneau. It's working.                                                                    
                                                                                                                                
     We told  you we'd build  programs of  distinction. We  now have                                                            
     "presidents   professors"   Thomas   Moore,   environment   and                                                            
     mathematics,  Gordon Cruise,  fisheries and oceanography,  Buck                                                            
     Sharpton in remote  sensing. This spring at UAA, we'll have Dr.                                                            
     Vernon   Smith.  He's  this   year's  Nobel  Prize   winner  in                                                            
     economics.  And as I  promised you last  year, we've hired  Dr.                                                            
     Craig  Doorman as DP  research, prior  director of Woods  Hole.                                                            
     Karen  Max, Research  Biologist  at ABR, graduated  the UAF  in                                                            
     1996. In discussing  the University's research role, we provide                                                            
     environmental  consulting services  [to] those who develop  and                                                            
     manage  Alaska's  natural  resources,  including  oil and  gas,                                                            
     mining,  timber,  military,  State  and  federal  agencies  and                                                            
     Native corporations.                                                                                                       
                                                                                                                                
     A  firm was  established  by two  UAF graduates  and  currently                                                            
     employs 26  full time professional level scientists.  Twenty of                                                            
     these scientists have at least one degree from UAF.                                                                        
                                                                                                                                
     And  finally in the area  of research,  GCI has made a  gift to                                                            
     the  University  of bandwidth  in  the form  of  access to  OC3                                                            
     connectivity.  This gift would retail for about  $4.5 million a                                                            
     year.                                                                                                                      
                                                                                                                                
     Finally, I said we  would diversify our funding base so that we                                                            
     were  less  dependent  on  State  funds.  Since  1999,  private                                                            
     contributions   and  scholarships  have  gone  up  77  percent.                                                            
     Contributions to the  foundation, which in the four years prior                                                            
     to my talking to you  averaged $6 million a year, have averaged                                                            
     in the five years  hence, $16 million a year. We're looking for                                                            
     land, State and federal,  and we continue to seek opportunities                                                            
     to  pass a  bill in  those areas.  Our current  land grant  now                                                            
     generates  about $2 to $2.5 million,  all of which and  more is                                                            
     consumed by the scholars program.                                                                                          
                                                                                                                                
     Federal  funds  are up  100 percent  in  the last  five  years.                                                            
     Tuition revenues  up 20 percent. This year, out  of $35 million                                                            
     request,  the University  can pick  up $22  million. Ten  years                                                            
     ago,  the State  paid  60 cents  on  the dollar  of  University                                                            
     needs. Today  they pay 40 cents with the University  picking up                                                            
     60 cents on the dollar. It's working.                                                                                      
                                                                                                                                
     So that was  the plan and those are the results  thus far. Some                                                            
     of  you should be  very proud.  Some of you  in this room  were                                                            
     here   to  listen  to  that   plan:  now  Senators   Bunde  and                                                            
     Therriault,  as well as Senators  Wilken and Green,  as well as                                                            
     Representatives  Williams,  Foster  and  Moses.  As though  you                                                            
     needed  another reason at that  time, oil was $9 a barrel.  But                                                            
     you took a chance.  You took a gamble or a bet and you invested                                                            
     in  the University.  What you're  seeing today  is a result  of                                                            
     that  foresight and a  result of that  gutsy call. There  are a                                                            
     dozen opinions on  how to improve our State's economy, but only                                                            
     60 votes  count. And  in 1999, a majority  of those votes  said                                                            
     let's go forward.  You alone are responsible for the remarkable                                                            
     progress of your University.                                                                                               
                                                                                                                                
     Let's  take  a  look  at  the  FY  2000  [FY  04]  budget.  The                                                            
     University  is  seeking a  modest  general fund  increase  this                                                            
     year. It's  less than we have requested during  my tenure. Some                                                            
     of those  reasons have already been covered:  the University is                                                            
     able  to  generate  a larger  share  of  its own  general  fund                                                            
     support.  This year we'll  fund nearly  60 percent with  asking                                                            
     the  State for  41. We  only ask  for what  we can effectively                                                             
     accomplish.  As I've told you in the past, if  I can't spend it                                                            
     responsibly,  I won't ask for  it. Budget request is  presented                                                            
     in two major  categories: there's salary maintenance  and fixed                                                            
     cost, and there's program enhancement.                                                                                     
                                                                                                                                
     The  University  will  fund  48 percent  of  the  total  salary                                                            
     maintenance and fixed  cost with non-general fund revenue. That                                                            
     is compared  with the ability to fund only 20  percent of it in                                                            
     FY 00.  In our salary  request, non-general  funds support  has                                                            
     grown  from 13  percent in  [FY] 00  to 35  percent today.  The                                                            
     general  fund request for meeting  State needs represents  only                                                            
     $3.5 million  in general funds but it will leverage  nearly $13                                                            
     million  in additional  non-general fund  receipts. Funding  in                                                            
     this category,  for example is $500 toward our  doubling of our                                                            
     nurses. That's  matched by $1.1 million from  industry. Funding                                                            
     for enhancing  student services,  including establishment  of a                                                            
     portal  to  deliver most  student  services  via  the Web.  And                                                            
     expansion  of research capacity, including biomedical  programs                                                            
     at UAA and resource  related research at UAF, all of which will                                                            
     generate about $7 million in non-general funds.                                                                            
                                                                                                                                
     In  the  capital  budget   side,  and  I  know  we'll  have  an                                                            
     opportunity  to come back to you regarding the  capital, let me                                                            
     just  briefly touch  on this  piece. Our  request includes  $42                                                            
     million of  GF and $108 million in receipt authority.  Projects                                                            
     funded  through  general  funds  include  maintenance,  repair,                                                            
     renovation,   instructional   equipment  and  additionally   $2                                                            
     million  for TVC courthouse,  $9 million  for Lena Point,  $3.4                                                            
     million for  Phase II of the University Center.  And we'll come                                                            
     back  next year  with a plan  for new  science facilities  that                                                            
     receive  funding for phase I  through the bond proposition.  We                                                            
     understand  we're going  to need on-going  funding to  maintain                                                            
     our building infrastructure.                                                                                               
                                                                                                                                
     So it's working and it's time.                                                                                             
                                                                                                                                
     [The  year]  2009 is  where  we've set  the  University's  next                                                            
     strategic   goal.  2009  will   be  the  50th  anniversary   of                                                            
     statehood, the golden  anniversary. At the University, we think                                                            
     it's  time for the  gold rush.  But this  time, less rush  more                                                            
     gold. Less rush: we've  got 2,000 days, that's about as long as                                                            
     it took to  execute the Apollo moon landing project.  It's more                                                            
     time than  it took to build the  pipeline. It's more  time than                                                            
     it took to prosecute  World War II. 2,000 days, plenty of time.                                                            
     We think there's more  gold, that that's a fitting metaphor for                                                            
     the richness of Alaska.                                                                                                    
                                                                                                                                
     Our  governor  has committed  his  Administration's  effort  to                                                            
     development  in all areas:  oil and  gas and tourism,  business                                                            
     and  industry,   fisheries  and  mining.  With   that  sort  of                                                            
     leadership,  it's incumbent on  the University to develop  even                                                            
     better coordination  between business, science, and engineering                                                            
     schools  and the  community.  The University  was charged  with                                                            
     exactly that mission  by the task force directed by this body -                                                            
     SJR  44  - to  look at  research  and  the research  agenda  in                                                            
     Alaska.   This  was  a  farsighted  tasking.   It  directs  the                                                            
     University  to align its research priorities  with the needs of                                                            
     the State.  And by this we will  continue to discover  the gaps                                                            
     in  applied  research that  will  enable us  to  have the  best                                                            
     chance to move Alaska toward its golden future.                                                                            
                                                                                                                                
     That  future will  be built  by building  the  talent pool,  by                                                            
     establishing   a   solid   foundation,   by   discovering   our                                                            
     enterprises of distinction  and by broadening our funding base.                                                            
                                                                                                                                
     If that sounds familiar,  that's exactly the plan I brought you                                                            
     five  years ago  for your University.  It will  work. But  some                                                            
     things must  change. Dependency on the federal  government must                                                            
     lessen   and  must  consider   sustainability.  Dependence   on                                                            
     "earmarks" must lessen.  Need that encouragement to develop, in                                                            
     terms   of  eliminating  regulatory   hurdles  and   increasing                                                            
     financial  incentives. And frankly, selfishness  must decrease.                                                            
     We citizens  must ask "What are we willing to  give up to build                                                            
     a  golden Alaska?"  I'm  easy. I have  three  children, two  of                                                            
     which  are graduates  of the University  and two grandchildren                                                             
     here  in the State.  You can  do anything you  need to  to make                                                            
     their  future as exciting  as the one  I felt when I first  saw                                                            
     this great State for the first time in 1988.                                                                               
                                                                                                                                
     Now  individually, I know  you have to  make your own  choices,                                                            
     but as a community,  as a State, I wish we'd stop talking about                                                            
     the graying  workforce and stop  talking about retirement.  All                                                            
     of us are needed to go forward to 2009.                                                                                    
                                                                                                                                
     Your  University's  are  much  more  than  training  for  jobs,                                                            
     although   we  do  that  very  well.  We  take  seriously   our                                                            
     responsibility   to  provide   our  students  with   a  quality                                                            
     education  that  serves  as  a  foundation  for  all  of  their                                                            
     responsibilities   as  community  members  and  leaders.  As  a                                                            
     reminder  of that, I'm  going to end  with experts from  a poem                                                            
     about  an old  king  talking to  his old  crew  about one  last                                                            
     voyage. You will recognize Alfred Lord Tennison's Ulysses.                                                                 
                                                                                                                                
          The lights begin to twinkle from the rocks:                                                                           
          The long day wanes: the slow moon climbs: the deep                                                                    
          Moans round with many voices.                                                                                         
          Come, my friends,                                                                                                     
          'Tis not too late to seek a newer world.                                                                              
                                                                                                                                
          …                                                                                                                     
                                                                                                                                
          Tho' much is taken, much abides; and tho'                                                                             
          We are not now that strength which in old days                                                                        
          Moved earth and heaven; that which we are, we are;                                                                    
          One equal temper of heroic hearts,                                                                                    
          Made weak by time and fate, but strong in will                                                                        
          To strive, to seek, to find, and not to yield.                                                                        
                                                                                                                                
     North to the Future.                                                                                                       
                                                                                                                                
Senator Hoffman  requested the President's address  of the following                                                            
legislative  session   contain  updates  of  the  status   of  rural                                                            
campuses,  as  the President  has  asserted  these campuses  are  an                                                            
integral  part  of  the  University  system.  Senator  Hoffman  also                                                            
requested information  on the record  of success of rural  campuses,                                                            
and  whether progress  is  occurring  as rapidly  as  with the  main                                                            
campuses.  He specifically  requested  the  status  of retention  at                                                            
these campuses,  stating the goal  should establish retention  rates                                                            
similar to the  main campuses. He asserted that the  University must                                                            
provide higher  education and standards  for all areas of  the State                                                            
not just main  campuses. He noted he has requested  this information                                                            
every year  and would like  the President's  address to include  the                                                            
topic of rural campuses.                                                                                                        
                                                                                                                                
President  Hamilton  acknowledged  that  Senator Hoffman  has  asked                                                            
these questions  each year.  President Hamilton  replied that  in FY                                                            
03,  13  percent  of  total  enrollment  is  Alaska  Natives,  which                                                            
represents  almost a 1,000-student  increase  since 1999. While  the                                                            
student  body as a  whole has increased  7.7 percent,  he noted  the                                                            
number  of  students reporting  themselves  as  Alaska  Natives  has                                                            
increased  27  percent,  almost  four times  the  total  amount.  He                                                            
furthered  that 19 percent  of participants  in the Alaska  Scholars                                                            
program report  themselves as Alaska Native. He spoke  of difficulty                                                            
in accounting  the retention  rate based  on ethnicity, although  he                                                            
understood  Alaska Natives  "have not faired  as well" as the  total                                                            
student population  in retention rates. He stated  that retention at                                                            
rural campuses  is also  difficult to achieve  because, "typically"                                                             
individuals attend  "episodically". He asserted that  students would                                                            
attest to  whether the University  "has a  good product", and  cited                                                            
the 27 percent enrollment  increase in the number of Alaska Natives.                                                            
                                                                                                                                
SENATOR GARY STEVENS asked  how K-12 students are being prepared for                                                            
higher education.                                                                                                               
                                                                                                                                
President Hamilton  spoke of two measurements,  the first  being the                                                            
statistic  that  40 percent  of  students  entering college  take  a                                                            
remedial  course.  He stated  this  is the  same for  University  of                                                            
Alaska students.  However,  he noted that  Alaskan college  students                                                            
take  between one  and  one half  years and  two years  of  remedial                                                            
courses.  He commented  that "a lot  can be done  in that time".  He                                                            
posed the  question as  to whether the  University should  undertake                                                            
the roll  of providing  extensive  remedial education  and  surmised                                                            
that the  policy is to  meet the educational  needs of Alaskans.  He                                                            
asserted that  the averages could "soar" if the University  admitted                                                            
only qualified  students,  and that retention  and graduation  rates                                                            
would also increase.                                                                                                            
                                                                                                                                
President  Hamilton relayed  the instance in  the first year  of the                                                            
Alaska  Scholars Program  in which  eight students  from the  Bethel                                                            
area attended  the University,  but all failed  out after the  first                                                            
semester. He  expressed that rather  than accepting their  failures,                                                            
he offered  to let these students  attend classes at rural  campuses                                                            
and  retain their  scholarships.  He reported  that  three of  those                                                            
students obtained  associates degrees  in three years. He  asserted,                                                            
"You  can fix  it-there's  no doubt"  although  he qualified  it  is                                                            
difficult and expensive.  He admitted that it would be preferable if                                                            
high school  graduates entered the  University prepared for  college                                                            
level  courses. However,  he  remarked, "you  have  charged me  with                                                            
'meet them where they are,  teach them til they get what they want."                                                            
                                                                                                                                
Representative  Williams  asked if  the proposed  University  budget                                                            
includes  funds for  salary increases  that might  be negotiated  as                                                            
bargaining unit contracts are renewed.                                                                                          
                                                                                                                                
President  Hamilton affirmed  that a "modest"  increase "in  keeping                                                            
with the existing collective bargaining agreement" is included.                                                                 
                                                                                                                                
Senator Bunde supported  the open admissions policy, as it is "right                                                            
for  Alaska". He  mentioned  $20 million  in  relation  to the  high                                                            
school qualifying examinations.                                                                                                 
                                                                                                                                
President Hamilton stated he would research the matter.                                                                         
                                                                                                                                
Senator  Bunde commented  on  students' concern  about  the cost  of                                                            
tuition. He  asked the percentage  Alaska students are contributing                                                             
to the  actual cost of  their education, and  a comparison  to other                                                            
universities.                                                                                                                   
                                                                                                                                
President  Hamilton  estimated  that University  of  Alaska  tuition                                                            
covers   40  percent  of   instruction,  compared   to  60   percent                                                            
nationally.  He stated that the University  of Alaska is  increasing                                                            
tuition  costs, commenting  that five  years prior  tuition was  not                                                            
increased because "we had nothing to offer."                                                                                    
                                                                                                                                
Senator Bunde  asked the percentage of Alaska high  school graduates                                                            
continuing  to college  compared to  the national  average. He  also                                                            
wanted to know the percentage  of Alaskans who attend college obtain                                                            
a degree.                                                                                                                       
                                                                                                                                
President  Hamilton answered  that Alaska,  with 40 percent  of high                                                            
school graduates who attend  college, is second only to the State of                                                            
Nevada. He  noted the high salaries  paid in the gaming industry  as                                                            
the reason many  Nevada high school graduates do not  obtain college                                                            
educations. He did not  have statistics of the percentage of degrees                                                            
earned.  He cautioned  that any  such statistics  would be  "grossly                                                            
skewed" due to  the number of students attending community  colleges                                                            
and because  the entire  University has open  admissions. He  stated                                                            
this information  would  be beneficial  but should  not be used  for                                                            
comparison against other universities.                                                                                          
                                                                                                                                
Representative  Meyer asked  the percentage  of alumni contribution                                                             
compared to other colleges.                                                                                                     
                                                                                                                                
President  Hamilton replied  that alumni  contributions are  greatly                                                            
improving but  are "not fabulous as  yet". He qualified that  within                                                            
the  last 18  months,  the  University  hired  development  officers                                                            
utilizing  a grant  from the  Rasmussen foundation  although  before                                                            
this,  the   University   had  no  formal   method  for   soliciting                                                            
contributions.  He  informed  that  when  he began  serving  as  the                                                            
University   president,    the   University   Foundation    received                                                            
approximately $6 million  annually in contributions, and in the five                                                            
years since, has  received $16 million. He pointed  out the majority                                                            
of  these funds  were  from  public institutions.  He  compared  the                                                            
national average  of 12 percent of  college alumni contributions  to                                                            
four percent for University of Alaska alumni.                                                                                   
                                                                                                                                
Co-Chair Green told of  efforts in the Mat-Su to establish a program                                                            
to provide needed nursing  training and that two institutions in the                                                            
area are looking outside  of the State for assistance. She preferred                                                            
an expansion  at the local University  campus to incorporate  such a                                                            
program.                                                                                                                        
                                                                                                                                
Co-Chair  Green  then spoke  of a  "drive  afoot" in  some  election                                                            
districts  to improve  vocational  technical  programs  at the  high                                                            
school and  college levels.  She opined this  is successful  at some                                                            
University  campuses and  asked if the  witness envisions  expanding                                                            
the program  statewide. If  so, she wanted  to know if the  programs                                                            
should receive partial funding from the local campuses.                                                                         
                                                                                                                                
President Hamilton  reminded that  the Legislature is "the  limiting                                                            
factor." He  explained that the number  of industries that  want the                                                            
University  to  be involved  in  providing  workforce  training  far                                                            
exceeds the University's  capacity to do so. He detailed the process                                                            
in determining  the highest  demands utilizing  Department  of Labor                                                            
and  Workforce  Development  statistics  coupled   with industries'                                                             
willingness to  contribute. He also pointed out the  cost to educate                                                            
a nurse is three and one-half  times the amount required to graduate                                                            
an anthropologist.  He  stressed the  importance  to health care  to                                                            
provide trained nurses  but qualified that the use of funds for this                                                            
purpose disproportionately  eliminates  funding for other  programs.                                                            
He noted that  community contribution has made the  nursing training                                                            
more possible and he supported continued efforts.                                                                               
                                                                                                                                
Senator Taylor  asserted that several communities  provide financial                                                            
support  for the  rural  campuses  located in  the area.  He  listed                                                            
Ketchikan,  Sitka and  Kodiak as providing  over  30 percent  of the                                                            
operating expenses  of the local campuses.  He asked the  percentage                                                            
contributed  by the communities of  Juneau, Anchorage and  Fairbanks                                                            
for the respective campuses in these towns.                                                                                     
                                                                                                                                
President   Hamilton  answered  the   three  communities   currently                                                            
contribute no funds for this purpose.                                                                                           
                                                                                                                                
Senator Taylor suggested  a portion of the requested budget increase                                                            
could be provided from these communities.                                                                                       
                                                                                                                                
President Hamilton  understood the premise and informed  that he has                                                            
studied the matter of consolidating  the four-year university system                                                            
with  the  community  college  programs.   He  commented  that  this                                                            
consolidation  is a financially "wise decision". However,  he opined                                                            
that a  consequence  was the loss  of "community"  in the  community                                                            
campuses, which  is partially reflected in the higher  tuition costs                                                            
for community  college courses.  He qualified that  tuition is lower                                                            
than the national average,  but higher at the rural campuses than at                                                            
the three  main campuses.  He informed that  tuition costs  at rural                                                            
campuses are not even higher because of community contributions.                                                                
                                                                                                                                
Senator  Bunde noted  that  the per-student  expense  at some  rural                                                            
campuses is $50,000, while the cost at the University of Alaska-                                                                
Anchorage is  approximately $15,000  per student. He expressed  that                                                            
greater community support should be provided.                                                                                   
                                                                                                                                
President  Hamilton  agreed  that  some  campuses  do  incur  higher                                                            
expenses. However,  he stressed that  all community campuses  except                                                            
University of Alaska-Fairbanks, Anchorage and Juneau, receive one-                                                              
eighth of  the University  budget, comprise  one-quarter of  student                                                            
credit  hours and  one-third of  the University's  "head count".  He                                                            
furthered   these  rural  campuses   provide  100  percent   of  the                                                            
postsecondary educational  opportunities. He remarked that the rural                                                            
campuses are "a  wonderful investment" and asserted  that no benefit                                                            
would result from identifying  campuses with the highest per student                                                            
expense.                                                                                                                        
                                                                                                                                
Senator Olson  referenced  the health care  delivery system  and the                                                            
nursing shortage that exists  statewide and nationwide. He expressed                                                            
concern  that  the   Native  health  corporation  in   his  district                                                            
attempted to establish  a nursing training program but was unable to                                                            
secure a  commitment from  the University  of Alaska for  assistance                                                            
before the year 2007. As  a result, he informed that the corporation                                                            
contracted with  an educational institution in the  State of Utah to                                                            
address  the shortfall  in  the meantime.  He asked  the  mechanisms                                                            
undertaken by the University  of Alaska to prevent the need for out-                                                            
of-state procurement.                                                                                                           
                                                                                                                                
President  Hamilton commented  that  the nursing  issue utilizes  as                                                            
much of his time  and attention as any other issue  in the State. He                                                            
stressed  that the University  is acting as  quickly as possible  in                                                            
offering  nursing  training  programs   in  communities  outside  of                                                            
Anchorage.   He  emphasized   the   limited  number   of   qualified                                                            
instructors  and  available   certified  clinical  experiences.   He                                                            
explained that  all students must undertake their  clinical training                                                            
in Anchorage,  as this is the only  city in Alaska with the  ability                                                            
to provide these experiences.                                                                                                   
                                                                                                                                
                                                                                                                                
SFC 03 # 14, Side B 09:48 AM                                                                                                    
                                                                                                                                
                                                                                                                                
President Hamilton expounded  that a summer nursing training program                                                            
was instituted  at the University of Alaska-Anchorage  for the first                                                            
time  because  of  competition  for  the  clinical  experiences.  He                                                            
asserted that this problem  could not be solved with money alone, or                                                            
he would  have requested  additional  funding for  this purpose.  He                                                            
understood the legislators' frustration.                                                                                        
                                                                                                                                
Co-Chair  Wilken recalled  one of the five  "verticals" the  witness                                                            
posed to the  Committee in his first  presentation five years  prior                                                            
was  intent  to produce  more  teachers  for  Alaska's  K-12  school                                                            
system. Co-Chair  Wilken remarked that this need is  apparent daily.                                                            
He referenced  other committee hearings regarding  appointees to the                                                            
University of  Alaska Board of Regents, noting Cynthia  Henry is one                                                            
appointee.  He informed  that  Ms. Henry  "brings to  the Regents  a                                                            
breath  of experience  and  knowledge  in regard  to  K-12 that  has                                                            
probably never  been on the Regents  before. She's a teacher;  she's                                                            
an involved  parent; six years elected  to the school board;  is now                                                            
on the [Fairbanks  North Star] Borough  assembly, and now  will be a                                                            
Regent." He related that  he requested Ms. Henry to serve as "the K-                                                            
12 liaison" with the Regents  to assist the University to "fill this                                                            
critical need  that's going to become more and more  evident as more                                                            
and  more accountability  is  heaped upon  the K-12  community."  He                                                            
requested  President  Hamilton  utilize  Ms.  Henry's  expertise  to                                                            
improve the number and  quality of K-12 teachers graduating from the                                                            
University of Alaska.                                                                                                           
                                                                                                                                
President Hamilton assured he would.                                                                                            
                                                                                                                                
Senator  Bunde furthered  the  shortage  of qualified  teachers  and                                                            
nurses  should  be  focused  upon.  He  requested  a  comparison  of                                                            
academic scholarships  to athletic  scholarships and the  graduation                                                            
rates  of both.  He indicated  that  a majority  of  members of  the                                                            
University hockey teams are from Canada.                                                                                        
                                                                                                                                
President Hamilton  answered he would  provide this information.  He                                                            
commented, "I think you're  going to be surprised. …If there's going                                                            
to be an insinuation  in that somehow  the hockey team or  Canadians                                                            
are dumb, I think  that you'll discover … [the] grade  point average                                                            
on our teams are  much higher than the student body."   He qualified                                                            
that he  would expect  students receiving  academic scholarships  to                                                            
graduate at a higher rate,  and pointed out this is the case, as the                                                            
graduation  rate  of  this  group  is  70  percent.  He emphasized,                                                             
"Excellent  programs reach that kind  of level." He spoke  of Alaska                                                            
Native students  participating in a science and engineering  program                                                            
at the University  of Alaska-Anchorage "retain at  70-some percent."                                                            
                                                                                                                                
Senator  Bunde clarified  that he  did not infer  that athletes  are                                                            
unintelligent, but rather  his point pertained to athletes who "play                                                            
out their eligibility" then withdraw from the University.                                                                       
                                                                                                                                
President Hamilton agreed, "That's probably so."                                                                                
                                                                                                                                
Senator  G. Stevens stressed  the importance  of consistency  across                                                            
the University  system. He asked if similar graduation  requirements                                                            
apply to each campus.                                                                                                           
                                                                                                                                
President  Hamilton  spoke to  a "long  lasting urban  legend"  that                                                            
credits are not transferable  between University of Alaska campuses.                                                            
He corrected, "Any credit  earned in the University of Alaska system                                                            
is  transferable  to any  other unit  of  the University  of  Alaska                                                            
system."  He emphasized that  requirements  for each degree  program                                                            
differ  and  that some  courses  do  not meet  the  requirement  for                                                            
certain degrees.  He gave  examples of "English  for engineers"  and                                                            
"math for  poets" that  would not  apply to  other degree  programs,                                                            
although the credits would be transferable.                                                                                     
                                                                                                                                
Senator G. Stevens countered  that in 1975 a Speech 111 course taken                                                            
at  the  Kodiak  Community  College  was  not  transferable  to  the                                                            
University of  Alaska-Fairbanks. He stressed that  if the University                                                            
system is "one university"  the course should transfer regardless of                                                            
the degree program.                                                                                                             
                                                                                                                                
President  Hamilton   assured  that  such  a  course   is  currently                                                            
transferable.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SHARON CISSNA expressed a need for  advanced degrees                                                            
at the Anchorage campus in the health care field.                                                                               
                                                                                                                                
President Hamilton told  of efforts to offer joint doctorate degrees                                                            
in conjunction  with the University of Alaska-Fairbanks.  However he                                                            
expressed that the Anchorage  campus would not become a PhD granting                                                            
institution, as the Fairbanks  campus is adequate for a state with a                                                            
population  of 600,000. He  remarked that  the demand for  doctorate                                                            
degrees is  minimal in comparison  to the demand for other  programs                                                            
in the curriculum.                                                                                                              
                                                                                                                                
Senator  Taylor pointed  out  the listing  of new  capital  projects                                                            
includes  $9,585,000 scheduled  for  a fisheries  and ocean  science                                                            
facility in Juneau.  He asserted that he has been  lobbying for such                                                            
facility  to be  constructed  in Sitka  or Ketchikan  and that  both                                                            
communities  would  contribute  over  30 percent  of  the  operating                                                            
expenses. He challenged  that before the capital funds  for a Juneau                                                            
facility  are appropriated,  the City and  Borough of Juneau  should                                                            
contribute.  He recommended this project  should be open  to bidding                                                            
by all three communities.                                                                                                       
                                                                                                                                
Co-Chair Wilken  referenced the aforementioned  handout,  noting the                                                            
Legislature  has increased  the general  fund  appropriation to  the                                                            
University  by  $55  million,  or  24.5 percent,  since  FY  99.  He                                                            
furthered that President  Hamilton has utilized that $55 million and                                                            
to leverage  $193 million from other  sources as promised.  Co-Chair                                                            
Wilken  asserted,  "That's  economic  development"  and  he  thanked                                                            
President Hamilton.                                                                                                             
                                                                                                                                
Senator  Hoffman referenced  17  goals listed  in  the handout,  and                                                            
pointed out that none directly  relate to rural campuses nor provide                                                            
accountability  of  efforts   to support   the  rural  campuses.  He                                                            
expressed  his primary interest  in graduating  students who  attend                                                            
rural campuses.  He also wanted accounting  of the number  of Alaska                                                            
Native students who attend  the urban campuses and graduate compared                                                            
to  non-Native  students.   He  acknowledged  that  the   statistics                                                            
provided by the  University are favorable; however  in speaking with                                                            
Native students he has  surmised that rural students are "being left                                                            
behind." He  asserted this much change  and it must be ensured  that                                                            
all Alaskans  are benefiting  from the expansion  of the  University                                                            
system.                                                                                                                         
                                                                                                                                
Representative  Croft  reaffirmed  Co-Chair  Wilken's  comments  and                                                            
opined,  "It's an  impressive  record  and I  hope we  can keep  the                                                            
momentum  going."  He  expressed  concern  over  the  difficulty  in                                                            
providing funding  increases in addition to amounts  proposed in the                                                            
governor's  budget  request.  He  asked  the  commitment   President                                                            
Hamilton has received  from Governor Frank Murkowski  with regard to                                                            
funding for the University.                                                                                                     
                                                                                                                                
President Hamilton referenced  the Governor's campaign commitment to                                                            
increased  funding for the  University of Alaska  a minimum  of five                                                            
percent  over  his four-year  term  of  office.  President  Hamilton                                                            
informed  this  commitment  was a  result  of a  discussion  whereby                                                            
candidate   Murkowski  asked   the  absolute   minimum  amount   the                                                            
University  would  require  to "move  forward".  President  Hamilton                                                            
relayed  his response  was one-percent  above  the higher  education                                                            
price  index,  which   calculates  to  approximately   five  percent                                                            
annually.                                                                                                                       
                                                                                                                                
Representative  Croft asked  if this  increase is  reflected in  the                                                            
University's proposed budget detailed in the handout.                                                                           
                                                                                                                                
President Hamilton  answered is it not, as this budget  was prepared                                                            
before a new governor  was elected. He remarked, "I  made the budget                                                            
based on the  needs of the State and  how much we could pay  and how                                                            
much we could  successfully execute."  He furthered that  the budget                                                            
"represents a reality, not a number".                                                                                           
                                                                                                                                
Representative Croft pointed  out the proposed budget contains a six                                                            
to seven percent increase.                                                                                                      
                                                                                                                                
President Hamilton asserted,  "The momentum killer is to not to give                                                            
the University  some sort of real growth numbers."  He reminded that                                                            
no funding  increases were provided  for ten years and consequences                                                             
resulted.                                                                                                                       
                                                                                                                                
Co-Chair Green commented  that as finance committee members "we must                                                            
view everything across  the table and across the board and try to do                                                            
the right thing for all parties in turn."                                                                                       
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Lyda Green adjourned the meeting at 10:07 AM                                                                           

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