Legislature(2005 - 2006)SENATE FINANCE 532

04/10/2006 05:00 PM Senate COMMITTEE ON UNIVERSITY OVERSIGHT


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05:07:22 PM Start
05:08:26 PM University of Alaska Presentation
06:26:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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University of Alaska Presentation
                    ALASKA STATE LEGISLATURE                                                                                  
        SENATE SPECIAL COMMITTEE ON UNIVERSITY OVERSIGHT                                                                      
                         April 10, 2006                                                                                         
                           5:07 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Gary Stevens, Chair                                                                                                     
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Thomas Wagoner                                                                                                          
Senator Kim Elton                                                                                                               
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Senator Gary Wilken                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Con Bunde                                                                                                               
Senator Ben Stevens                                                                                                             
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
University of Alaska Presentation                                                                                               
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
See minutes from 2/7/06, 2/28/06 3/20/06, and 3/21/06 SUOV                                                                      
meetings                                                                                                                        
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
President Mark Hamilton                                                                                                         
University of Alaska                                                                                                            
P.O. Box 755000                                                                                                                 
Fairbanks, AK 99775                                                                                                             
POSITION STATEMENT:  Delivered University of Alaska presentation                                                              
                                                                                                                                
Wendy Redman, Vice President                                                                                                    
University Relations                                                                                                            
University of Alaska                                                                                                            
P.O. Box 755000                                                                                                                 
Fairbanks, AK 99775                                                                                                             
POSITION STATEMENT:  Discussion participant                                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  GARY  STEVENS  called  the   Senate  Special  Committee  On                                                            
University  Oversight  meeting to  order  at 5:07:22  PM.  Present                                                            
were  Senators  Ralph  Seekins,  Thomas Wagoner,  Kim  Elton,  and                                                              
Chair Gary Stevens.                                                                                                             
                                                                                                                                
              ^ University of Alaska Presentation                                                                           
                                                                                                                              
CHAIR  GARY  STEVENS  announced  the  committee  would  hear  from                                                              
President Mark Hamilton.                                                                                                        
                                                                                                                                
5:08:26 PM                                                                                                                    
                                                                                                                                
MARK  HAMILTON, President  of the  University of  Alaska, said  he                                                              
would address issues  that were raised during  previous briefings.                                                              
He reviewed the  "Criteria for Effective Policy"  slide that David                                                              
Jones presented at  a previous meeting and said that  the State of                                                              
Alaska  has  reason  to  be  proud.  The  legislature  established                                                              
performance  measures in  2000 and  the university  has been  very                                                              
successful  in meeting  those goals  and  showing progress  across                                                              
the board.                                                                                                                      
                                                                                                                                
In the  last eight  years the policy  guidance the university  has                                                              
received  could be  summed  up as,  "jobs,  jobs,  jobs, meet  the                                                              
workforce  needs."  The university  has  done that  for  teachers,                                                              
nurses,  allied  health,  engineers,  and  the oil  and  gas  line                                                              
workforce.  There  has  also  been   direction  to  seek  research                                                              
efforts   related   to   Alaska   including   fisheries,   health,                                                              
transportation, and economics.                                                                                                  
                                                                                                                                
Another clear  policy consideration  is that the  university needs                                                              
to discover  ways to  find external resources.  That has  been one                                                              
of  the greatest  achievements  over the  long-term,  he said.  In                                                              
1986 the university  received $167 million from  the general fund.                                                              
Thirteen  years later the  legislature gave  the university  money                                                              
and brought  the budget back to  just short of $167 million  so in                                                              
nominal dollars the university went nowhere in 13 years.                                                                        
                                                                                                                                
When  the  full  budget  request  for  this  year  is  reduced  to                                                              
constant  1986 dollars  it amounts  to $167  million meaning  that                                                              
the university  hasn't had an increase  in purchasing power  in 21                                                              
years. During  that same period  non-general funds  have increased                                                              
from $85 million in 1986 to a projected $450 million this year.                                                                 
                                                                                                                                
PRESIDENT HAMILTON  said the  university has  a mixed  report card                                                              
with regard  to the issue  of maintaining necessary  institutional                                                              
capacity.  In the  last eight  years the  university has  received                                                              
funding that  is $7.2 million short  of the fixed costs  over that                                                              
period. The  full fixed  costs have  been funded  in three  of the                                                              
last seven  years and  in all  but two  years the legislature  has                                                              
funded the payroll.  In terms of the general  fund, the university                                                              
has met the measure  minimally but the capital side  has been less                                                              
successful.  He related that  branch campuses  have received  a 35                                                              
percent increase  in general funds  in the last eight  years while                                                              
the university has received a 29 percent base increase.                                                                         
                                                                                                                                
The next issue  is whether or not contributions  are affordable to                                                              
the   state  and   the  students.   The   legislature  makes   the                                                              
determination  for  the state,  but  he  is very  concerned  about                                                              
affordability  to students.  Tuition  has been  raised 10  percent                                                              
per  year for  the last  four  years. That  has  caused pain  even                                                              
though  the University  of  Alaska  has one  of  the lowest  state                                                              
tuition rates of any university in the country.                                                                                 
                                                                                                                                
Students   are   encouraged   to    apply   for   national   grant                                                              
opportunities,  but  there  is  a problem  in  Alaska.  For  every                                                              
dollar that  a family earns above  the means test, which  is about                                                              
$18,000, the  opportunity for PELL  grants decrease. On  the other                                                              
hand there has  been some success in the workforce  programs where                                                              
employers offer  aid or reimbursement to students.  Wise employers                                                              
have chosen to invest in such programs, he said.                                                                                
                                                                                                                                
PRESIDENT  HAMILTON  moved to  the  issue  of fairness.  From  his                                                              
perspective that  is whether  or not an  adequate amount  of money                                                              
is dispersed to  the various branches. All the  campuses would all                                                              
say they don't get enough money but disbursements are equitable.                                                                
                                                                                                                                
With regard  to the issue of  transparency he said  the university                                                              
is a national  example. There is  transparency in the  budget, the                                                              
programs,  the budget  distribution, and  the initiative  process.                                                              
He related  that for  the first three  years after the  initiative                                                              
process began  he took  every dime of  initiative funding  and put                                                              
the  programs on  the  Internet specifically  for  the purpose  of                                                              
transparency.   He    mentioned   the   ad   hoc    committee   on                                                              
accountability  and sustainability  and emphasized that  attention                                                              
to detail is important.                                                                                                         
                                                                                                                                
PRESIDENT HAMILTON  highlighted training and  vocational education                                                              
program  (TVEC)  funds to  address  the  issue of  incentives  for                                                              
institutional  responsiveness   and  entrepreneurship.   It  is  a                                                              
special funding  stream that comes from unemployment  insurance to                                                              
fund  training  in  the  state.  Internally,  the  university  has                                                              
instituted  performance   based  budgeting  and  it   has  made  a                                                              
difference. The  community branches are  now setting up  their own                                                              
measures upon which performance will be base.                                                                                   
                                                                                                                                
5:34:35 PM                                                                                                                    
                                                                                                                                
PRESIDENT  HAMILTON  discussed   the  categories  from  the  sheet                                                              
labeled "Measuring Up: Graded Categories."                                                                                      
                                                                                                                                
Student  Preparation   for  Training   Beyond  High   School:  The                                                              
university is  beginning to get  involved in the high  schools and                                                              
there is  need to  do more of  that. He related  that some  of the                                                              
most productive  university programs have  begun by going  to high                                                              
schools  and mapping  academic guidelines  for  students who  show                                                              
promise.  A different  approach  is to  get  individuals from  the                                                              
workforce  to visit  high schools  to help  spell out  what a  job                                                              
entails.  He mentioned  that  the  Fairbanks Chamber  of  Commerce                                                              
started  such   a  program.  The  teacher-mentoring   program  was                                                              
started  with a  federal  grant and  the notion  is  to get  young                                                              
teachers  up to  speed more  quickly.  He said  that program  will                                                              
bear enormous fruit in years to come.                                                                                           
                                                                                                                                
Participation  -  The  Opportunity  to  Enroll  in  Education  and                                                              
Training  Beyond  High  School:  This  is  important  because  the                                                              
number  of  jobs  in  the  country  that  require  post  secondary                                                              
education at the  certificate or associate level  is overwhelming.                                                              
For  instance,  students  don't   work  construction  to  pay  for                                                              
college any  more; they  go to college  to gain  the skills  to go                                                              
into  the  construction  trade.   However,  a  real  problem  with                                                              
participation  is   that  Alaska   has  the  lowest   high  school                                                              
graduation  rates in the  country. The  university is  involved in                                                              
significant remediation  programs and it must continue  to do that                                                              
until the front-end problem is fixed.                                                                                           
                                                                                                                                
Affordability: was covered previously, he said.                                                                                 
                                                                                                                                
Completion: PRESIDENT  HAMILTON said we aren't doing  very well in                                                              
this  category. One  consideration  is that  more Alaska  students                                                              
work than  students in other parts  of the country. He  noted that                                                              
many students  have given up  the Alaska Scholars  Program because                                                              
maintaining 12 credit  hours while working is too  difficult. It's                                                              
a difficult  balance because working up  to 20 hours a  week tends                                                              
to  help a  student's  grades  but working  30  hours  has a  huge                                                              
impact and working 40 hours is difficult to pull off.                                                                           
                                                                                                                                
He  related that  students are  working because  there isn't  much                                                              
needs-based  aid available  and  federal grants  are difficult  to                                                              
qualify  for. To  get  an idea  of  what  it will  cost  to go  to                                                              
college  he said  just double  the  tuition payment.  Even if  you                                                              
don't live  in the  dorm and deal  with a  meal plan students  are                                                              
faced  with  buying ridiculously  expensive  textbooks.  He  noted                                                              
that library costs rise more than health costs each year.                                                                       
                                                                                                                                
Benefit  of  a Highly  Educated  Population:  He  emphasized  that                                                              
producing  workers  in  the  state   is  exactly  what  the  state                                                              
university needs  to do. For the  last seven years  the university                                                              
has been  working to replace the  retiring workforce on  the North                                                              
Slope with  Alaskans and is  preparing to  meet the needs  for the                                                              
gas pipeline.  For instance, the  university is moving  forward to                                                              
double the  number of engineers  by 2010. The university  made the                                                              
same promise  to double the  number of  nurses by 2006.  That goal                                                              
will be met even  though the state has not supported  it President                                                              
Hamilton  said.  The  cost  is going  on  the  Denali  Commission,                                                              
Rasmussen   Foundation,   federal   grants  and   contracts,   BP,                                                              
ConocoPhillips, Compaq, TVEC funds, and the hospital workers.                                                                   
                                                                                                                                
We're moving  forward and asking  the legislature to fill  us back                                                              
in, he said. We  can do anything at the university,  we just can't                                                            
do anything much without funding.                                                                                             
                                                                                                                                
SENATOR SEEKINS  mentioned the number  of foreign students  in the                                                              
masters degree  engineering  program and  asked if the  university                                                              
was recruiting in India.                                                                                                        
                                                                                                                                
PRESIDENT  HAMILTON responded  that is an  anomaly resulting  from                                                              
sister city  affiliation. The other  factor is that  U.S. students                                                              
aren't entering the engineering field.                                                                                          
                                                                                                                                
CHAIR GARY STEVENS  asked if those students would  return to India                                                              
with their degrees.                                                                                                             
                                                                                                                                
PRESIDENT  HAMILTON  said  it  would   probably  be  a  mixed  bag                                                              
favoring India.                                                                                                                 
                                                                                                                                
WENDY REDMAN, Vice  President of University  Relations, University                                                              
of Alaska, said  that would change as India and  China continue to                                                              
invest in higher education.                                                                                                     
                                                                                                                                
SENATOR SEEKINS  questioned why U.S. students aren't  entering the                                                              
field of engineering.                                                                                                           
                                                                                                                                
MS.  REDMAN  responded  it  is   an  intense  program  and  Alaska                                                              
students  don't arrive  at the  university prepared  to enter  the                                                              
engineering  program. The  Alaska Native  Engineering and  Science                                                              
Program  (ANESP)  has been  successful  at taking  rural  students                                                              
into  engineering in  Fairbanks  and Anchorage  but  it starts  in                                                              
middle school.  Potential  students are identified  and then  they                                                              
are followed  and helped along  the way until  they to get  to the                                                              
university level.                                                                                                               
                                                                                                                                
CHAIR   GARY  STEVENS   said   he  understands   Senator   Seekins                                                              
viewpoint,  but the  United States  has always  been a beacon  for                                                              
universities  around the world  so Alaska has  reason to  be proud                                                              
that foreign students want to come here.                                                                                        
                                                                                                                                
PRESIDENT  HAMILTON said  100 percent  of  the graduate  engineers                                                              
have been hired since he joined the university.                                                                                 
                                                                                                                                
MS.  REDMAN  discussed  the  advertising  program  that  attracted                                                              
nurses  to the  program  and said  the same  thing  would have  to                                                              
happen with  engineering. Students  that want to  become engineers                                                              
will have  to take a  different academic  path in high  school. To                                                              
that  end, the  Alaska Engineering  Society  has been  advertising                                                              
and developing internship programs to go into schools.                                                                          
                                                                                                                                
SENATOR SEEKINS  said he would like  the dollars that go  into the                                                              
university system to benefit the people of Alaska.                                                                              
                                                                                                                                
SENATOR WAGONER  asked about  the percentage  of foreign  students                                                              
in the engineering program.                                                                                                     
                                                                                                                                
PRESIDENT HAMILTON  responded it  would be  fairly small,  but the                                                              
program  is   very  undersubscribed  so  bringing   in  additional                                                              
students is in the universities' interest.                                                                                      
                                                                                                                                
SENATOR  ELTON asked  if  the university  is  getting ARCO  merger                                                              
money and if so are they involved in the engineering program.                                                                   
                                                                                                                                
PRESIDENT  HAMILTON  replied  yes  to  both  questions.  About  $1                                                              
million has  gone to the ANSEP  program and those funds  have been                                                              
very important.                                                                                                                 
                                                                                                                                
PRESIDENT HAMILTON  referenced a 1990-2005  demographic indicating                                                              
that  in the  last 15  years Alaska  has lost  30,000 people.  All                                                              
those  people  gave  up  their   Permanent  Fund  dividend  to  go                                                              
somewhere  else  that  has  a future.  He  emphasized  that  young                                                              
people aren't going to stay here for $1,500 a year.                                                                             
                                                                                                                                
CHAIR GARY  STEVENS expressed personal  concern about the  loss of                                                              
adult students  and said he'd like  to spend more  time discussing                                                              
that issue.                                                                                                                     
                                                                                                                                
PRESIDENT HAMILTON  concluded his remarks and urged  the committee                                                              
to continue  to meet.  Transparency and  accountability are  not a                                                              
threat because the  university is here to do  what the legislature                                                              
directs.                                                                                                                        
                                                                                                                                
CHAIR GARY  STEVENS said he'd like  to revisit the issues  at some                                                              
point.                                                                                                                          
                                                                                                                                
SENATOR  WILKEN  discussed  the governor's  proposal  to  increase                                                              
funding.                                                                                                                        
                                                                                                                                
MS.  REDMAN mentioned  that  community  campus directors  met  and                                                              
developed  working  groups and  strategies  that  will be  helpful                                                              
over the  course of  the next  year. She  expressed the  hope that                                                              
there would  be an opportunity to  discuss that in depth  over the                                                              
course of the summer.                                                                                                           
                                                                                                                                
There  being no  further business  to come  before the  committee,                                                              
Chair Gary Stevens adjourned the meeting at 6:26:21 PM                                                                        
                                                                                                                                
                                                                                                                                

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