Legislature(2007 - 2008)SENATE FINANCE 532
04/11/2007 01:00 PM FINANCE
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MINUTES SENATE FINANCE COMMITTEE April 11, 2007 1:12 p.m. CALL TO ORDER Co-Chair Lyman Hoffman convened the meeting at approximately 1:12:08 PM. PRESENT Senator Lyman Hoffman, Co-Chair Senator Bert Stedman, Co-Chair Senator Charlie Huggins, Vice-Chair Senator Kim Elton Senator Donny Olson Senator Joe Thomas Senator Fred Dyson Also Attending: Members of the public who provided testimony in Juneau are identified in the body of the minutes. Attending via Teleconference: Teleconference participants are identified in the body of the minutes. SUMMARY INFORMATION HB 95-APPROP: OPERATING BUDGET/LOANS/FUNDS HB 96-APPROP: MENTAL HEALTH BUDGET The Committee took public testimony from Bethel, Kotzebue, Barrow, Nome, Delta Junction, Off-net locations, Anchorage, Kenai, Valdez, Kodiak, Ketchikan, Seward, Mat-Su, Glennallen and Tok in the order reflected in the minutes. The bills were held in Committee. 1:12:12 PM HOUSE BILL NO. 95 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska; and providing for an effective date." HOUSE BILL NO. 96 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." This was the third hearing for these bills in the Senate Finance Committee. 1:12:19 PM Co-Chair Hoffman announced the continuation of public testimony, and the order in which communities would be asked to testify. 1:14:27 PM SONYA HANDFORTH-KOME, Executive Director, Iliuluik Family and Health Services Clinic, Unalaska, testified via teleconference from an offnet location in Unalaska in support of funding for community health centers. The health center in Unalaska serves approximately 21,000 patients each year, and is 800 air miles to nearest health care provider in Anchorage. The clinic was approximately 70 percent patient funded and received grants to fund remaining expenses. Alaska was "one of the few states" that did not provide direct funding to community health centers. 1:18:27 PM RICHARD WYLAND, Mayor, Seldovia, testified via teleconference from an offnet location in Seldovia in support of revenue sharing. He told of the "desperate need" for revenue sharing in Seldovia. Major cuts, including police services, would occur without revenue sharing. 1:21:06 PM PTARMICA MCCONNELL, Mayor pro-tem, Port Alexander, testified from an offnet location in Port Alexander in support of revenue sharing. She spoke of the negative effects of the cessation of revenue sharing on the ability of small communities to provide services for their residents. 1:22:40 PM Co-Chair Hoffman informed that $48.1 million had been included for municipal revenue sharing in the proposed Senate version of the operating budget. 1:23:10 PM GRAHAM WARD, Glennallen, testified from an offnet location in Glennallen in support of Senate Bills 143 and 144. As an owner of a campground in Glennallen, he supported increased funding for tourism marketing. 1:24:34 PM NEIL DARISH, Co-Owner, McCarthy Lodge, testified via teleconference from an offnet location in McCarthy in support of increased funding for tourism advertising. He shared that he employed many local McCarthy residents and reinvested his income in the community. 1:26:20 PM VERA GORDON, Catholic Social Services, Delta Junction, testified from an offnet location in Delta Junction in support of maintained funding for the Delta Junction Job Center. The Job Center was utilized by residents who did not have computer access elsewhere, and who would otherwise have to travel approximately 90 miles to Fairbanks to apply for employment. 1:27:38 PM LENA VERECHKOVA, Catholic Social Services, Delta Junction, testified via teleconference from an offnet location in Delta Junction in support of continued funding of the Delta Junction Job Center. She spoke of the many services offered by the Job Center. 1:28:33 PM DR. DOUGLAS STARK, Senior Councilman, Homer, testified from an offnet location in Homer in support of municipal revenue sharing. The Homer Borough would be required to raise sales tax to a combined city and borough total sales tax of 7.5 percent in the absence of revenue sharing. He foresaw a higher sales tax driving residents to buy their goods outside of Homer, thus exasperating the local revenue shortfalls. 1:29:47 PM PIUS AGIMUK, Mayor, Toksook Bay, testified via teleconference from an offnet location in Toksook Bay in support of municipal revenue sharing. Revenue sharing funds the Village Police Officers (VPOs), refuse collection, and other necessary services for residents. 1:31:36 PM SAM MOYUK, testified from an offnet location in Savoonga. He spoke of the difficulties his community was experiencing in identifying matching funds for the removal and replacement of tank farms, and requested the reinstatement of municipal revenue sharing. 1:32:27 PM MYRON KINGQEETUK, Manager, Savoonga Native Store, testified from an offnet location in Savoonga in support of municipal revenue sharing. He shared that high fuel prices were "hurting" the community. 1:33:15 PM SHIRLEY MARQUADT, testified via teleconference from an offnet location in Unalaska in support of municipal revenue sharing. She told that revenue sharing monies had historically been used to assist in funding local non-profits, such as Meals on Wheels. She added that the Public Employees Retirement System (PERS) and the Teachers Retirement System (TRS) required contributions were funded separately from any revenue sharing considerations. Those contribution rates had increased $1.6 million over the prior year, and she encouraged that the two issues be addressed separately. 1:35:08 PM RICHARD BENEVILLE, Nome Discovery Tours and Nome Chamber of Commerce, testified via teleconference from Nome in support of increased funding for a statewide tourism advertising program. He told of the benefits the Alaska Travel Industry Association (ATIA) provided to Alaska through increased national awareness of Alaska as an independent traveler destination. 1:37:22 PM MITCH ERICKSON, Executive Director, Nome Chamber of Commerce, testified via teleconference from Nome in support of the municipal revenue sharing and Power Cost Equalization (PCE) programs. He explained that the loss of revenue sharing and PCE funding resulted in "very hard times for many people". 1:38:54 PM SHARON SPARKS, Office Manager, Alaska Legal Services, testified via teleconference from Nome in support of funding for the Alaska Legal Services Corporation. 1:39:30 PM ELLEN RICHARD, President, Native Village of Wales, testified via teleconference from an offnet location in Wales in support of increased funding for community health centers. She spoke of the dilapidated condition of the medical equipment in the Wales clinic, as well as the clinic itself. She also informed that the clinic was sometimes without heat due to the high price of fuel. 1:41:08 PM WINTON WEYAPUK JR., Vice President, Native Village of Wales, testified via teleconference from an offnet location in Wales in support of revenue sharing. He set forth that the village relied on revenue sharing to provide services to the community, such as VPOs. 1:42:59 PM WALTER WEYAPUK, Native Village of Wales, testified via teleconference from an offnet location in Wales in support of revenue sharing. He described the health clinic as "minimally equipped", and spoke of the lack of other community services. 1:44:09 PM FRANK OXEREOK JR., Native Village of Wales, testified via teleconference from an offnet location in Wales in support of municipal revenue sharing. He told of the high cost of fuel in the village, and the need for increased law enforcement presence. He was "glad to hear that the money was coming in". 1:45:30 PM CHRISTINE KOMONASEAK, Native Village of Wales, testified via teleconference from an offnet location in Wales in support of municipal revenue sharing and energy assistance. She spoke of the necessity of a clean water source for residents and increased availability of housing in the village. 1:46:35 PM LUTHER KOMONASEAK, Native Village of Wales, testified via teleconference from an offnet location in Wales in support of municipal revenue sharing. He informed that Wales is frequented by hunters from Russia, and the lack of water and sewer services create unsanitary living conditions. He added that the village's dump site had received State funding but is too close to airport, and should be relocated. 1:48:44 PM DR. NORMAN ECK, Superintendent, Northwest Artic Borough School District, testified via teleconference from an offnet location in Kotzebue in support of public broadcasting. He described the integral role the local public radio station provided to his area, including community and job announcements and local language broadcasts. 1:51:59 PM SUSAN COX, Executive Director, Camai Bristol Bay Borough Community Health Center, testified from an offnet location in Naknek in support of funding for rural health clinics. She spoke of the many services the clinic provided for area residents, Bristol Bay fishermen, and tourists. She detailed the high costs of operating the community health care center in a remote location. 1:54:28 PM LATESIA GUINN, Executive Director, Bethel Family Clinic, testified via teleconference from an offnet location in Bethel and introduced MICHAEL DOSER [name and spelling unverified], Board Member, Bethel Family Clinic, who spoke in support of the community health centers appropriation bill, SB 106. Alaska is one of only 14 states that do not assist in funding the community health centers. Alaska's health clinics served approximately 80,000 patients the previous year, and are an important aspect of health care in the State. 1:56:34 PM JEANNE GERHARDT-CYRUS, Parent, testified via teleconference from an offnet location in Kiana in support of behavioral health grants that would provide staffing for the local Boys and Girls Club. She mentioned the high rate of suicide in the area, and the Bring the Kids Home Initiative. She shared that one of her children received residential treatment, but due to the lack of services upon returning home, he was currently in the custody of the Department of Corrections. 2:00:21 PM AGNES MOSES, testified via teleconference from an offnet location in Golovin in support of restored municipal revenue sharing. She detailed the services this funding would provide to local residents, including funding the city's insurance, road maintenance, and VPO positions. 2:01:30 PM ELAINE PRICE, Project Manager, City of Coffman Cove, testified via teleconference from an offnet location in Coffman Cove in support of revenue sharing to assist in the provision of required services. PERS and TRS relief would not benefit many small communities, as they do not participate in those retirement systems. 2:02:50 PM JO PUTMAN, Secretary, Public Defenders Office, testified via teleconference from Nome in support of funding for Alaska Legal Services offices. She told that the Public Defenders Office represents only clients appointed counsel by a judge, and all other individuals in need of legal assistance inundate the few Legal Services Offices in operation. 2:03:57 PM DANIEL LIENBERGER, Mayor, Bethel, testified via teleconference from an offnet location in Bethel in support of the restoration of revenue sharing. He divulged that 2006 represented the first year of net migration out of Bethel in "a generation" due to high cost of living. Revenue sharing would allow the city to provide services without the "depressing" effect of raising sales tax. He recommended a long-term plan for revenue sharing to assist smaller communities in planning their budgets. Mr. Lienberger also addressed the "PERS and TRS issue". The city of Bethel, like many other Alaskan communities, witnessed dramatic increases in retirement liability costs over the previous year. He encouraged a long term solution to attend to that looming financial burden. 2:08:09 PM CONNIE WALKER, Holy Cross, testified via teleconference from an offnet location in Holy Cross in support of the reinstatement of revenue sharing. She spoke of the community benefits that are supported by revenue sharing, and informed that PERS and TRS funding should be considered separately. 2:10:19 PM JIMMY HURLEY, Former Mayor, Ekwok, testified via teleconference from an offnet location in Ekwok in support of municipal revenue sharing. While sales taxes generate some revenue for the community, revenue sharing is vital to the health of the area. He added that the village safe water project needed to be "tuned up". 2:12:08 PM DR. DAVID BAINES, Family Physician, Iliuliuk Family and Health Services Clinic, Unalaska, testified via teleconference from an offnet location in Unalaska in support of funding for community health centers. The clinic provided a broad spectrum of services for uninsured and underinsured patients on a sliding scale, and state funding would allow the clinic to continue to provide those important services. 2:14:20 PM BEN ESCH, Nome, testified via teleconference in support of fully funding the Alaska Legal Services Corporation at $300,000. As a superior court judge, he recognized the steps the legal system had taken in providing information via the Internet. He explained that in civil cases such as divorce or child custody hearings, the judge can appoint counsel only under certain circumstances. He encouraged the Committee to fund Legal Services to better serve all Alaskans in need of legal assistance, regardless of their financial situation. 2:16:17 PM DAN O'HARA, Mayor, Bristol Bay Borough, testified from an offnet location in Bristol Bay in support of restored municipal revenue sharing. He was concerned with the increasing costs of health care, energy, and local school funding. 2:18:27 PM BEVERLEE TYNER, Craig, testified via teleconference from an offnet location in Craig in support of funding for the Alaska Legal Services Corporation. She worked with the elders in the area, and generalized the income level on Prince of Whales Island as "low". She mentioned that there were no legal services available on the Island, and she referred people in need of legal assistance to the Legal Services Office in Ketchikan. She encouraged the continued funding for Alaska Legal Services. 2:21:07 PM BILL ALTLAND, Owner, Whales Tail Pharmacy, Craig, testified via teleconference from an offnet location in Craig in support continued funding for community health care centers. The community health center in Klawock was the only emergency care provider accessible Mr. Altland's family and other residents of the island. 2:23:00 PM SHERRY DECKER, Owner, Hair Doctor Styling Salon, Delta Junction, testified via teleconference from an offnet location in Delta Junction in support of funding for the Delta Junction Job Center during the current "boom". She spoke of the effective assistance provided by the Delta Junction Job Center, and noted that in rural communities, on-line employment activities are less successful. She listed savings to the State in the form of less "welfare" expenditures. 2:25:18 PM FERDINAND SHARP, Mayor, Manokotak, testified via teleconference from an offnet location in Manokotak in support of municipal revenue sharing. The community utilized one third of budgeted funds for fuel for work vehicles that performed services such as snow removal. 2:27:03 PM RICHARD ELSTROM, City Manager, Saint Mary's, testified via teleconference from an offnet location in Saint Mary's in support of revenue sharing. He echoed previous speakers' remarks on the subject, noting that the city expended revenue sharing funds for basic needs, including the salaries of the city employees. 2:28:27 PM BYRON CHARLES, Ketchikan, testified via teleconference from an offnet location in support of the Alaska Job Corps Center in Palmer. He told of the benefits the Center had provided to both him and his daughter, and requested further funding for the Center. 2:31:14 PM RON PECK, President Alaska Travel Industry Association (ATIA), Anchorage, testified in Juneau in support of increased funding for "core" and "independent" marketing programs. He informed that the number of independent travelers to Alaska had been declining in recent years, and that the increased funding would allow ATIA to support tourism marketing in smaller, out-lying areas of the State. 2:33:38 PM KIRK HOESSEL, President, Alaska Wildland Adventures, Girdwood, testified in Juneau in support of increased "destination marketing funding" to ATIA. He emphasized that the increase would provide support and benefits for thousands of small businesses throughout the State as well as support rural economic development. 2:36:23 PM DAVE WORRELL, Communications Director, ATIA, testified in Juneau in support of increased funding for ATIA. He likened "reinvesting" in Alaska's tourism industry to the State's reinvestment in commercial fisheries through contributions to the Alaska Seafood Marketing Institute (ASMI). He requested the Committee add $18 million to fund "core" tourism marketing and an additional $8.5 million for independent tourism marketing. 2:37:11 PM Senator Elton, as the former Executive Director of ASMI, pointed out that the seafood industry sees an 18 cent "match" on every dollar it contributes to ASMI. ATIA, by comparison, enjoys a funding rate of four dollars for every dollar it spends on advertising. He "felt compelled to note the difference," as the current ATIA request would double the State's contribution while ATIA's contribution rate would not increase. 2:38:11 PM Mr. Worrell admitted that there existed an inequitable difference in funding proportions. He qualified that in years past, the ATIA budget had been funded approximately 50 percent by voluntary contributions made by large industry companies, and the State had matched those funds. ATIA anticipated less voluntary contributions from large industry members due to the passage of the "cruise ship ballot initiative," and thus deemed it appropriate to designate a portion of those monies collected to be used by ATIA in its advertising efforts. 2:39:21 PM JILL SIMPSON, Director, International Marketing, ATIA, Anchorage, testified in Juneau in support of increased funding for ATIA. She explained that Alaska is not competitive in the global marketplace. International travelers were important to Alaska because they tended to spend more time exploring Alaska, which resulted in more revenue for the State, including rural areas that do not benefit from cruise ship traffic. 2:41:01 PM HEATHER DUDICK, Marketing Director, Alaska Wildland Adventures, Girdwood, testified in Juneau in support of increased funding for the "destination marketing" program operated by ATIA. She spoke of the benefits ATIA provides to small, independent tourism companies through the "vacation planner" publication and the ATIA webpage, which allow business owners to showcase their offerings to a larger audience. 2:43:20 PM JOHN KREILKAMP, Vice President of Operations, Cruise West, Anchorage, testified in Juneau in support of increased funding for ATIA. He informed that Cruise West offers tours to twenty small costal communities in Alaska. These boats bring a "cash economy" to areas that would not be able to effectively market themselves as a tourism destination. 2:45:21 PM CAROL COMEAU, Superintendent, Anchorage School District, testified via teleconference from Anchorage in support of the modified PERS and TRS rates, as a set rate would allow school districts more certainty in their budget planning. She supported consideration of the "area cost differential" contained in the Institute of Social and Economic Research (ISER) study completed by the University of Alaska, but only if Anchorage also received an increase in funding. Co-Chair Hoffman asked the annual cost to the district of the new contract recently negotiated and accepted by the assembly. Ms. Comeau replied that the first year costs were considered in the current budget, but anticipated the need for additional funds to account for the increase in subsequent years. 2:49:34 PM JOHN STRIPE, Board Member, Access Alaska, Anchorage, testified via teleconference from Anchorage in support of a permanent $100,000 increase in the funding for Independent Living Centers. The centers had received level funding but had experienced a 112 percent increase in costs. He additionally requested an allocation of at least $94,000 for interpreter referral services for the deaf and hard-of-hearing. 2:53:54 PM DEBORAH HANSEN, Director of Marketing and Sales, Rust's Flying Service and K2 Aviation, Anchorage, testified in Juneau in support of increased funding for ATIA marketing efforts. She explained that small tourism companies spend their profits within the State, differing from large cruise ship companies that take their revenues out-of-state. She received 20 to 160 "leads" each month through the ATIA travel planner service, which provided advertising that the small businesses would otherwise not be able to afford. 2:56:28 PM TIM STEELE, Anchorage School Board Member, testified via teleconference in Anchorage in support of a "set" employer contribution rate for PERS and TRS benefit obligations. He spoke to the need for "forward funding" to assist school districts in fiscal planning. 2:59:13 PM SANDRA HEFFERN, Owner and CEO, Ready Care, testified via teleconference from Anchorage in support of an increased reimbursement rate for personal care attendant services. The current reimbursement rate of $21 per hour had not been increased since 1998, though operational costs had increased dramatically. She identified an inequity between the Medicaid reimbursement level provided for institutional care and the reimbursement provided for home-based care in the proposed budget. Hospitals and nursing homes received an increase every four years, and an inflation adjustment in alternating years. Home care had not received an increase since 1998, and she opined that the budget reflected a preference for institutionalizing the elderly or disabled. 3:03:22 PM ANTHONY RIVAS, Student Body President, University of Alaska Anchorage, testified via teleconference from Anchorage in support of increased funding for the University's fixed costs. As a student, he understood that the University would suffer if it was not able to provide attractive programs, such as engineering and nursing, to draw in new students. 3:05:01 PM JOHN ROBERSON, Student Body President-Elect, University of Alaska Anchorage, testified via teleconference from Anchorage in support of full funding for the University's fixed costs. He spoke of "frustrated" students entering the nursing program, which has a two-year waiting period. 3:06:34 PM KIRMANIE RAVARIERE, Student, University of Alaska Anchorage, testified via teleconference from Anchorage in support of fully funding the fixed costs of the University. He identified international benefits that could be achieved by sufficiently funding the University of Alaska's programs, including international political, social, and economic gains. 3:10:08 PM MARK BEGICH, Mayor, Anchorage, testified via teleconference from Anchorage in support of revenue sharing throughout Alaska. He informed that the average property owner in Anchorage would enjoy a savings of approximately $420 per home if revenue sharing dollars were applied to property taxes, as is the practice in that city. He stressed the vast difference between municipal revenue sharing and PERS and TRS funding assistance, as 94 communities without State employees would not benefit from the PERS and TRS monies. Municipal revenue sharing would provide these communities with a small portion of the State's oil proceeds. 3:14:50 PM Co-Chair Hoffman reminded that the proposed Senate budget contained $48.1 million to fund municipal revenue sharing. Mr. Begich exclaimed the funding was "fantastic". 3:15:24 PM NORMAN TATE, Student, University of Alaska Anchorage, testified via teleconference from Anchorage in opposition to the proposed "savings cuts" to the University system. He spoke of the reductions' ability to stem new programs, and possibly affect existing programs. This could drive students out of Alaska to seek the educational programs they desire. 3:17:33 PM STEPHAINE GORDER, Anchorage, testified via teleconference from Anchorage in support of additional funding for ATIA. She was a life-long Alaskan who operated a small tour company, and spoke of the "unified front" ATIA provided small business through their advertising efforts. 3:18:58 PM NICOLE THIBODEAU, Director, Covenant House Alaska, testified via teleconference from Anchorage in support of human services matching grant funds. She told that the grants are utilized by non-profit organizations to leverage additional federal and private funding and donations. The groups receiving these funds provided needed services to the citizens of Alaska at a low cost to the State. 3:20:30 PM TONI JONES, Anchorage, testified via teleconference from Anchorage in support of funding for the University if Alaska Anchorage. She spoke of a 35 year "relationship" with the University, including her current position as an adjunct instructor. She shared that the fixed costs of the University affected all other areas of its educational mission. 3:25:49 PM KARLA JUTZI, Director, Alaska Center for the Blind and Visually Impaired, testified via teleconference from Anchorage in support of an annual grant for the special projects portion of the Alaska division of vocational rehabilitation. She told of the Center's ability to assist visually-disabled Alaskans, particularly individuals in rural areas. 3:29:06 PM JANET SWANSON, Contractual Marketing and Sales, Major Marine Tours, testified via teleconference from Anchorage in support of increased funding for ATIA marketing efforts. She mentioned that she worked for four small tour companies, and tourism has allowed her to pay her bills and save for her retirement. 3:30:41 PM AL KOCH, General Manager, All Alaska Tours, testified via teleconference from Anchorage in support of increased, sustainable funding for ATIA's destination marketing programs. He predicted that a decline in marketing investment would result in a down turn in visitors to the State. He warned that this would have negative economic impacts on the State economy. 3:33:28 PM KATHY DUNN, Marketing Director, ATIA, Anchorage Resident, testified in Juneau in support of increased funding for ATIA. She told that she had worked in tourism since 1982. She published the state vacation planner for ATIA, and distributed the publication as requested to people who were planning Alaskan vacations. Requests for the vacation planner varied from 10,000 to 100,000 per month. ATIA is able to advertise on television 12 weeks per year, and increased funding could allow twice that amount of air time. 3:36:11 PM MATTHEW ROGERS, Graduate Student, University of Alaska Anchorage, testified in Juneau in support of full funding for the University of Alaska. He detailed the many various ways university graduates can positively affect State operations, including engineering, health care and construction management. 3:37:56 PM SUZANNE RUST, Rust's Flying Service and K2 Aviation, Anchorage, testified in Juneau in support of increased funding for ATIA marketing efforts. As a small business owner she knew the jobs she provided on a seasonal and year-round basis allowed individuals to live in areas of the state with limited employment bases, such as Talkeetna. She contended that each dollar spent on tourism advertising increased the likelihood that a person would select Alaska as their vacation destination, thus adding to the State economy. 3:40:12 PM PAT LUBY, Advocacy Director, AARP Alaska, testified via teleconference from Anchorage in support of the request for the Alaska primary care health clinics. Community health centers consistently accept Medicare patients where other providers do not. He pointed out that "Medicare doesn't do much good if you can't find a physician." Increased funding would allow expanded access to healthcare for Medicare patients. 3:41:31 PM MARILYN KASMAL, Executive Director, Alaska Primary Care Association, testified via teleconference from Anchorage in support of funding for community health centers. She told that Alaskans spend $32 million on unnecessary emergency room visits, which could be avoided if individuals had other options for healthcare services. She informed that U.S. Senators Murkowski and Stevens recommended State funding support for these important health centers. She detailed the savings community health centers provide to the State in the form of reduced Medicare costs. 3:44:44 PM JULIE SAUPE, Anchorage Convention and Visitors Bureau (ACVB), testified in Juneau in support of increased funding for ATIA. She informed that ATIA marketing efforts often dovetail with the ACVB marketing programs, and sometimes extend to very different markets, thus increasing the scope of the advertising. AT EASE 3:46:33 PM / 4:34:43 PM NOTE: Due to a technical difficulty, the testimony provided between 4:34:43 PM and 5:30:57 PM was not recorded on FTR. Therefore, the timestamp associated with each testifier is for reference only. An alternate recording of this time period is available through the link to Gavel-to-Gavel on Basis.] Co-Chair Hoffman called the meeting back to order. Public testimony from individuals in Kenai, Valdez, Kodiak, Ketchikan, Mat-Su, Seward, Glennallen, and Tok would now be heard. He asked that comments be held to two minutes in order to accommodate all those desiring to testify. 4:36:07 PM LAURA CLOWARD, Executive Director, Seward Chamber of Commerce, Conference and Visitors Bureau, testified via teleconference from Seward and urged the Committee to support the $18,000,000 request for core funding for Alaska Travel Industry Association (ATIA) and the separate $8,500,000 ATIA request for funding to market independent travelers. This marketing effort would allow Alaska to be competitive with other states. Tourism is critical to more than 275 small business Chamber members. In addition to strengthening the economic base of communities and the State, visitor spending is relied upon to enhance business growth and to provide summer employment opportunities. 4:37:35 PM PAUL CARTER, Owner, Hotel Edgewater and Charter Option, Co-Owner Crackerjack, and President, Kenai Peninsula Tourism Marketing Council, testified via teleconference from Seward. Tourism supports his family and his business' 45 employees. It also benefits numerous support services businesses. The State must "reinvest back into the tourism industry to ensure that visitors continue to come to Alaska". Unlike states such as Florida and Hawaii which had dedicated state or tourism taxes, Alaska, at one time, did not have any mechanism through which to support its marketing efforts, and, over time, Alaska's marketing dollars dropped to 38th out of the 50 states. 25 other states now spend more than double the amount spent by Alaska. Mr. Carter exclaimed that Alaska now has the opportunity to turn this situation around. The recently enacted cruise ship head tax will generate a significant amount of money for the State's general fund. Some of it should be reinvested into marketing the State. In addition to benefiting tourism businesses, this investment would be a net benefit to State coffers. He urged support for the $18,000,000 and $8,500,000 ATIA funding requests. 4:39:43 PM MICHELLE GLAVES, Executive Director, Soldotna Chamber and Visitors Center testified in Juneau in support of ATIA's two funding requests. She described the variety of small businesses in Soldotna that benefit from the tourism industry and expressed that funding ATIA is vital to the survival of the tourism industry and their supporting service industries. Increased funding for the tourism industry would also be beneficial to communities. This is an economic development issue, a small business issue, and a way of life issue. 4:41:39 PM SHANON HAMRICK, Executive Director, Kenai Peninsula Tourism Marketing Council (KPTMC), testified in Juneau on behalf of the 400 small businesses on the Kenai Peninsula that depend on tourism. 25 percent of all the businesses licensed on the Peninsula and 30 percent of all the sales tax revenue generated there are tourism related. ATIA is an asset to KPTMC as leveraging local marketing dollars with those of ATIA affords a wider national and international marketing reach. Tourism brings new money to the area. It is also a renewable resource that encourages entrepreneurship and provides opportunities for new businesses and new jobs. Supporting ATIA's funding requests would be an investment in the State's future. 4:43:16 PM Senator Elton asked regarding the fee required to join KPTMC. Ms. Hamrick specified that the basic membership fee is $100 a year. Expanded marketing opportunities were also available for an additional charge. 4:43:46 PM MYA RENKEN, Executive Director, Kenai Convention and Visitors Bureau, testified in Juneau in support of the funding requests for ATIA. She recently mistook an advertisement for the State of Maine as an ad for Alaska as it also featured a moose and a dog sled team. This solidified her concern that Alaska has a tremendous amount of competition for tourism, not only in this country but globally. Funding ATIA would allow local and ATIA dollars to partner together to deliver a strong message. ATIA's marketing efforts could be characterized as the industry's fishing net as it is well-researched, would be strategically placed, and would generate results. 4:45:32 PM BONNIE QUILL, Executive Director, Matanuska-Susitna (Mat-Su) Convention and Visitors Bureau, testified in Juneau and announced this was her fifth year of participation in the ATIA Legislative Fly-In. Funding ATIA is critical as the tourism industry has taken "a big hit" this year. She voiced appreciation for her community officials' support for tourism; they recognize the positive impact it has. Absent a cooperative advertising effort between ATIA and local businesses, the message would not reach prospective out-of-state visitors as local advertising budgets are too small. 4:46:52 PM SANDRA WHITE, Representative for ATIA and Talkeetna Air Taxi, testified in Juneau and shared the history of her family's long involvement in the tourism industry. She is grateful to have a job that can not only support her, but is challenging and enjoyable. Tourism provides many employment opportunities to Alaskans, especially youth. The State, which spends approximately five or six million dollars a year on marketing as compared to a $12.8 million average in other states, currently ranks 38th out of 50. Ms. White expressed that, unlike cruise ship passengers, independent visitors tend to visit the State more than one time. To emphasize that point, she noted that Alaska, at 30 percent, has one of the highest repeat visitor rates. The small businesses that comprise the majority of the State's tourism industry cannot promote the State on a national level without State funding support. She urged the Committee to fund the two requests in support of tourism as it is a renewable resource that promotes economic diversity and infuses a huge amount of cash into the State. Because the State's marketing efforts have been researched and honed, the return on this investment is high. She also urged the Committee to support the industry's request for a ten percent match to the State funding as otherwise, the industry would be in "big trouble". 4:50:22 PM PAUL FELTHAUSER testified via teleconference from Mat-Su in support of the $110,000 request for special projects grant for the Alaska Center for the Blind which would provide visual aids and training for visually impaired individuals in rural areas. The Lions Club would be assisting in this endeavor. The lighted magnifier glass provided to him by the Center has helped him become more independent than ever before. 4:52:35 PM VERN HALTER, Dream a Dream Dog Farm and Dream Inn Bed & Breakfast (B&B), testified via teleconference from Mat-Su and described his endeavors as being "a true small family business". Alaska has tremendous tourism competition, and supporting ATIA would be one of "the most positive things" the State could do to support the economy. 4:54:29 PM PAUL METZNER testified via teleconference from Mat Su and spoke in support of reinstating the Senior Longevity Bonus Program. The elimination of that program by the Governor Frank Murkowski administration was contrary to the promise to the State's seniors by the Alaska Legislature. Longevity Bonus Program payments had a direct influence on program recipients' budgets. For example, he and his wife decided to use their monthly Longevity payments to support the purchase of a new car. Now they are burdened with those car payment obligations. Many seniors live on fixed incomes and the loss of this program has affected their quality of life. Those payments also added a multiplier to the economic well-being of the State as seniors spent that money locally. 4:58:35 PM DAVID PETERSON, Executive Director, Valdez Convention and Visitors Bureau, testified in Juneau on behalf of the organization's 175 members "that are directly dependent" on the visitors that ATIA's marketing efforts bring. ATIA's marketing campaigns has also generated "thousands of leads" for Valdez businesses. Additional marketing money is now required to turn around the current decline in the State's ability to compete as a travel destination. The money reinvested into the visitor industry marketing efforts would improve the State's position in the marketplace and would reap a ten to 100-fold return. 5:00:36 PM MARIAN ROMANO, Assistant Mat-Su Borough Manager, testified in Juneau and thanked the Committee for considering Public Employees Retirement System (PERS), Teachers Retirement System (TRS), and revenue sharing funding in the budget. The Borough, which is "the fastest growing area in the State", has been able to provide needed services despite losing some federal revenue funding sources and having to absorb cost increases. It is very "fugal with the public's money", and she assured the Committee that any revenue sharing funds provided by the State would be used to reduce citizens' property tax rates. In conclusion, she encouraged the Committee to maintain the proposed TRS and PERS employer contribution rates of 12.56 percent and 22 percent respectively. 5:02:39 PM PATTI MACKEY, Executive Director, Ketchikan Visitors and Convention Bureau, testified in Juneau in support of ATIA's funding requests. "Tourism is an all-encompassing industry". It enhances the economic well-being of many State tourism business sectors, from transportation to retail to accommodations to food. Those businesses, in turn, support other business sectors including the construction industry, professional services such as accountants, and fuel suppliers. This is an opportunity to invest in a renewable resource that will benefit the State for years to come. 5:04:21 PM MARK MILLER, State Tourism Planner, ATIA, testified in Juneau in support of ATIA's funding requests. The tourism industry maintains the pristine beauty of the State while allowing small businesses to grow and prosper. A [unspecified] report compiled by the Department of Commerce, Community and Economic Development indicates that the taxes generated to local communities by tourism are substantial. That money helps communities "sustain themselves" year-round. He encouraged the Committee to fund ATIA at the requested levels as it would allow the State to compete with other markets. 5:08:04 PM NANCY ST. JOHN-SMITH, Medical Site Manager, Cottonwood Health Center, testified via teleconference from Kenai in support of a $2.3 million appropriation request for Alaska community health centers. These centers provide health care to the underserved: those who might lack transportation; have low or no income; have a mental illness, no or low insurance, or seasonal employment. In addition, the centers have recently experienced an increase in people on Medicare as a result of many private medical practices curtailing serving them due to reductions in Medicare reimbursements. She recounted a recent encounter with a patient who praised the caring service he had received at the Center. The increasing demand on the centers is evidence that their services are necessary and increased funding is required. 5:10:29 PM ELLEN ADLAN, Chair, Board for Central Peninsula Health Centers, testified via teleconference from Kenai and requested support for the $2.3 million dollar request for community health centers. Their services fill a void for those who cannot afford health insurance or face other obstacles. 5:12:34 PM COLLEEN STEPHENS, Stan Stephens Cruises, testified via teleconference from Valdez and attested to the positive impacts of tourism including the job opportunities it provides to local youth. Even though her family's company spends "a considerable amount of money" on marketing, that effort would not be as successful without ATIA's marketing support. Tourism generated revenue benefits more than those businesses directly involved in it. She urged the Committee to fully fund the ATIA marketing requests in order to promote further growth of the State's economy. 5:15:36 PM STAN STEPHENS, Owner, Stan Stephens Cruises, testified in Juneau in support of the $18 million and $8.5 million funding requests for ATIA. The value of tourism to the State is often not recognized. It is a big industry. Additional funding assistance is required in order for the industry to reach its full potential. 5:17:17 PM DAVE COBB, Business Manager, Valdez Fisheries, testified via teleconference from Valdez in support of the ATIA funding requests. A multitude of businesses have been created because of the tourism industry, but more funding is required for the State to successfully compete in the global tourism market. It is difficult for small businesses to market themselves to residents of the State, much less to markets elsewhere. 5:18:52 PM SUSAN GILPATRICK, Small Business Owner, testified via teleconference from Valdez. The hotel she owns directly benefits from tourism and her other business, a greenhouse, indirectly benefits from it. She urged the Committee to support the funding requests for ATIA as the domino benefits of tourism are far- reaching. 5:19:38 PM JOHN DEVENS, Owner, Lake House Bed & Breakfast, testified via teleconference from Valdez and spoke to the benefits of tourism. His business and its support industries were testaments of the huge pass-around factor of the money spent by visitors in the State. Valdez is increasingly becoming more economically reliant on tourism as other employers in the community, specifically the Alyeska Pipeline Terminal, reduce their employment opportunities. The requests for $18 million in core funding for ATIA and the $8.5 million to support a marketing campaign geared for independent travelers is important to the economic well- being of the State. 5:21:16 PM Lu ANECHIAERICO testified via teleconference from Ketchikan in support of the Senate Finance Committee's [unspecified] subcommittee funding recommendation for public radio. "Public radio is an important source" for local, state and national information. 5:22:31 PM ROY ECKERT, Ketchikan Gateway Borough, testified via teleconference from Ketchikan in appreciation of the fact that revenue sharing funding was reinstated into the State's operating budget. Many communities in Southeast Alaska have experienced economic downturns, and without State revenue sharing assistance, communities would be required to raise taxes, short-fund schools, and/or short-fund essential services. 5:23:55 PM KEVIN GADSEY, Southeast Alaska Independent Living, testified via teleconference from Ketchikan in support of increasing the budget for services for people with disabilities by $100,000. He also urged support for a $100,000 request to provide interpreter services for the deaf. These funding requests would improve the lives of people with disabilities; it would empower them and allow them to contribute to society. 5:26:03 PM CATHY LECOMPTE, Campus Director, University of Alaska Ketchikan, testified via teleconference from Ketchikan and urged full support for the operating budget request for the University of Alaska. The Ketchikan campus, while small, has a dedicated staff who desire to contribute to the workforce development in the State. Increased funding is required to address increased fixed costs the University is experiencing. Without adequate funding, programs and staff would be reduced. Small campus would feel the affect more than larger ones. 5:27:24 PM KAREN HARRIS, Owner, Alaska Garden Gate Bed and Breakfast, testified via teleconference from Mat-Su in support of the two funding requests for ATIA. 5:28:09 PM KAREN LAMBERT, Employee, Alaska Legal Services, testified via teleconference from Kodiak and urged the Committee to further the Committee's [unspecified] subcommittee recommendation to provide $300,000 for legal services for low-income individuals in the State; without it, society should not be considered "fulfilled". 5:29:00 PM BARBARA BOLSON, Employee, Kodiak College, testified via teleconference from Kodiak and urged the Committee to fund the University of Alaska "at a level" that would cover fixed cost increases and its workforce development programs. The University has been prohibited by the Legislature from using internal savings to address these issues. She asked that consideration to given to an amendment being developed by Committee member Senator Thomas "that would remedy the subcommittee's poorly advised actions" on the University's budget. 5:30:03 PM CAROLYN FLOYD, Mayor, City of Kodiak, testified via teleconference from Kodiak, in support of funding the full-time citizenship assistance position within the Kodiak job center. She attested to the invaluable service provided by the individual who currently holds that position and the benefit of the program to the citizens of the community. 5:30:57 PM NITA NICOLAS, Kodiak Barangay Lions and Filipino American Community Association, testified via teleconference from Kodiak and urged the Committee to fund the citizenship assistance position housed in the Kodiak job center. 5:31:46 PM [NOTE: FTR recording reestablished at this point.] JENNY YORK, Administrative Assistant, Aleutian Campus Tok Center, University of Alaska, testified via teleconference from Tok and voiced appreciation for the Committee's difficult task in managing the State's operating budget and keeping the State's spending in check. She urged the Committee to carefully consideration a forthcoming amendment that would be presented by Senator Thomas which would allow the University to address its fixed costs increases. Ms. York also asked the Committee to reinstate the funding for the lone position in the Tok employment office. While the office is considered "low volume" when compared to Anchorage, it does provide a vital service to the area. Eliminating this position would increase the workload in the Anchorage and Juneau job centers and would ultimately require them to increase their staffing levels. Elimination of this position would further "marginalize" rural towns. 5:32:50 PM ROBERT WILKINSON, Chief Executive Officer, Copper Valley Electric Association, testified via teleconference from Glennallen, in support of reinstating funding for the Glennallen employment center. "This one-person office performs many vital services to the" numerous communities in the Copper River basin. One of the arguments in favor of closing this office is that the services provided by the office were available via the internet. That argument is unjustified as many of the individuals living in the large rural Copper River basin area are seasonally employed and many of the unemployed live a subsistence lifestyle. Few have access to computers and internet access is limited. Eliminating the job center would increase the regions' employers' job recruitment expenses and would make finding employment more difficult for individuals. 5:34:58 PM PARK KRINER, Small Business Owner, testified via teleconference from Glennallen and urged that funding for the Glennallen employment center be restored. As the owner of the Caribou Hotel and Restaurant, the Glennallen Chevron, a grocery store and several apartments, he hires approximately 80 employees each spring. Other times of the year, he employs approximately 40 people. The professional testing and employment services provided by the employment center are crucial to his and other communities' businesses. Mr. Kriner stated that closing the office would not save the State a significant amount of money. He suggested that money to support the center would be available were the State to correct inefficiencies and over-staffing in other State operations. He shared personal experiences attesting to the inefficiencies of other State operations. Retention of the single position in the Glennallen employment center is urged. 5:38:13 PM ANDRE HINES, Crossroads Medical Center, testified via teleconference from Glennallen in support of funding community health centers (CHCs) in the State. Alaska is currently one of 14 states that do not fund such centers. The Crossroads Medical Center, which is a small facility, serves an area the size of Ohio and includes Glennallen, the Copper River Basin, and Gakona. Ms. Hines shared that in addition to serving as a primary care facility, the Center provides urgent care service 24 hours a day, seven days a week. It also provides pharmaceutical and laboratory services, behavioral health, school health, home visits, and counseling. Ms. Hines communicated that the Center has to recruit and house its medical staff. This has been difficult. The doctor currently serving the Center was hired through a temporary service and costs in excess of $1,000 a day including salary, housing, and transportation. The Center has been unable to have a permanent physician on staff for approximately one and a half years. The current Physicians Assistant (PA) on staff is overworked; it is feared she will leave if not provided additional help. State funding assistance is required in order for the Center to hire an adequate number of qualified staffers. Ms. Hines advised the Committee that the range of critical medical demands placed on an Alaskan CHC exceeds those placed on an urban CHC, in Chicago for example, as there are no nearby alternatives. She also noted that were an individual here to require up to 72 hours of care, the Center would be reimbursed the same for that service as a facility in Chicago would for only providing services for half an hour. 5:41:47 PM GILBERT GUTIERREZ testified via teleconference from Glennallen and requested reinstatement of the funding for the Glennallen job service position. The service is important to the vast area including Glennallen, Copper River, and Kenny Lake, as it provides "a window" for employment not only for the unemployed, but for employers. The Center is the focal point of opportunity for many training programs conducted in the area. Absent it, residents of the area would be forced the expense of driving to other areas for help. In addition, many people do not have access to computers and rely on the job service for employment notices. Shutting the employment office would be discriminating; "it would treat the area differently by denying services" to individuals in the area. 5:44:44 PM ALAN LEMASTER, Owner, Gakona Junction Village, testified via teleconference from Glennallen in support of funding for the Glennallen employment center. This Center helps employers stay in compliance of ever-evolving employment regulations. Closing the center would be a disservice to the area; it would force 4,000 Copper Valley residents to rely on Anchorage services. Closing this office would not save money; the position would simply be moved to Anchorage or Fairbanks and the level of service to individuals in the Glennallen area would be diminished. 5:47:22 PM JEROME SELBY, Kodiak Island Borough, testified via teleconference from Kodiak and thanked the Committee for reinstating community revenue sharing. History will show that this Legislature's financial support for communities was more important than the financial support of the proposed gas pipeline project as, without it, up to 100 small communities in the State would disappear before the pipeline project began operation. Many communities have already had to curtail basic services. This funding is critical and appreciated. Ms. Selby also urged that funding for the citizenship assistance position in Kodiak be reinstated as that service is critical to the minority communities in the area. 5:49:45 PM JOHN PAGE, Owner, Sunny Cove Sea Kayaking Company, testified via teleconference from Seward in support of the ATIA funding requests. This should be considered an investment in the State's future. Other parts of the world have come to the realization that this investment "pays off". A quality marketing program is required for the State to stay competitive in the global market. Mr. Page attested to the decline over the past few years in the number of independent travelers that many small businesses rely on. He is not simply requesting a handout as the State netted $20 million in tourism related taxes and fees in 2005. This funding will generate returns to the State as well as helping small companies like his grow and prosper. 5:51:10 PM NICOLE CHURCH, Small Business Owner, testified via teleconference from Ketchikan and urged for increased tourism funding to attract independent travelers. In the past, the State received outside marketing support such as the mystique of Alaska featured in movies or the State being discussed in classrooms "that stimulated desire in Americans and other travelers to visit Alaska". Other things that generated interest in the State included World War II, the Homestead Act, and fishing and timber businesses. The independent travelers in the 1800 and 1900s also "played their part in keeping the dream of wanting to visit Alaska alive in the hearts and minds of Americans who read their writings, saw their photos, and talked to them upon their return." Ms. Church emphasized that because of these things, the State was not forced to market itself as diligently as other destinations were required to. That has changed, and the State was recently preempted as the number one place most Americans wanted to visit. While the affordability of cruise ship travel has brought a multitude of visitors to the State over the past decade, the limited amount of time spent in each port has lessened the fiscal impact their visit has on local small businesses. Ms. Church also noted the cruise ship passengers "go away with the feeling that I'll seen Alaska. Few of them have really experienced Alaska and nothing is being done to encourage them to return on their own. Local businesses benefit when visitors spend three or four days in an area. "The longer stay also allows the visitor to form a lasting impression that they take back home with them." They are great ambassadors for publicizing the State. Research also indicates that when a person has an extended stay in the State, they are likely to be repeat visitors. Ms. Church communicated that while many Americans attest to having more time to travel more destinations with aggressive marketing campaigns are being offered via such things as the Internet. Ms. Church advised that the economy is also working against the State, as air travel, ferry tickets, gas prices, lodging, meals and entertainment costs have increased dramatically. This has forced people to take shorter vacations and stay closer to home. Thus, the State must "be more persuasive" in its efforts to promote the State. Ms. Church professed that cruise lines and companies "are so successful in packaging tours that [simply] require a credit card number many of today's tourists are reluctant or unsure of how to plan an independent trip and what the value of it really is. This is where our State marketing efforts need to be focused. Two-thirds of the guests that stay at my husband and my bed and breakfast come from outside the United States. Travelers from other countries seem to be more aware of the benefits of traveling on their own by air or by our ferry when they go on vacations. American travelers need to be reintroduced to the value of independent travel. This can only happen if the State is seriously committed to investing in a marketing campaign targeted at these independent travelers." 5:56:29 PM PAM FOREMAN, Kodiak Island Convention and Visitors Bureau, testified in Juneau regarding the importance of ATIA's marketing dollars to a small community. The approximately 220 small businesses members of the Kodiak Convention and Visitors Bureau depend on the Bureau to market Kodiak as a destination; the Bureau in turn depends on the State's marketing program, operated by ATIA, "to help it market to the world". Ms. Foreman declared that the impact of ATIA's advertising is much larger than the reach afforded by a small community's budget. She urged the Committee to fully fund the $18 million being requested to support ATIA's core marketing program and the $8.5 million being requested to attract independent visitors. Independent visitors are of particular importance to Kodiak. This investment would contribute to the economies of communities and to the State. AT EASE 5:58:30 PM / 6:12:46 PM SHELLEY HUGHES, Governmental Affairs Director, Alaska Primary Care Association, testified via teleconference from Mat-Su in support of the $2.3 million funding request for CHCs. As a fiscal conservative, her support for this funding is not done lightly. Ms. Hughes testified as follows. Community health centers are based on efficient business models and what they are able to accomplish on a dollar is simply amazing. It's important for you to know that community health centers are already saving the State $10 million in State Medicaid dollars. How and why? Because the Medicaid patients that uses the community health center as his or her medical home costs 30 percent less than a Medicaid patient seen elsewhere. Here's a quick example. A particular diabetic test performed at the community health center in Wasilla is less than $50. That same test performed at the local hospital is over $200. Here's another. A patient in a rural area avoids the hospitalization because of community health center services and saves Medicaid tens of thousands of dollars. With State funding to strengthen and expand community health centers, the State would realize even greater savings to Medicaid. Just by re-directing 4,000 Medicaid patients across our State to use community health centers as their medical home, the savings right there would be over two million. And avoiding 4,000 inappropriate emergency room visits to community health centers would save another two million. Waiting another year for the health care strategy council's recommendation or for Medicaid reform legislation to include funding will put off these savings to the State for another year. The wise things to do would be to invest in the community health centers now. They need your support urgently as they've experienced ten percent increases in operational expenses, flat federal funding, and increased patient loads. You should also know that we have a number of communities in Alaska that have been denied the federal funding repeatedly. The State must step up and do its part if we're to expect federal funds for these communities. This will take boldness on your part as the item is not yet in the budget but I know that each of you have that trait or you wouldn't be sitting where you are today. I ask, respectfully, that you please do the right and the wise thing. Please add a budget amendment to HB 95 for $2.3 million for community health centers. Thank you honorable co-chairs and Committee members for your outstanding service for all us here in Alaska and especially at this late hour for your time and consideration of this issue. May you all have an excellent evening. 6:16:42 PM There being no further testifiers, Co-Chair Hoffman thanked those who testified on the bills and announced that public testimony was now closed. Further action on these bills is anticipated to occur on Thursday or Friday of this week. The bills were HELD in Committee. ADJOURNMENT Co-Chair Lyman Hoffman adjourned the meeting at 6:17:24 PM.