Legislature(2025 - 2026)ADAMS 519
02/11/2025 10:30 AM House FINANCE
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| Start | |
| HB53 || HB55 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 53 | TELECONFERENCED | |
| += | HB 55 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE BILL NO. 53
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
making reappropriations; making appropriations under
art. IX, sec. 17(c), Constitution of the State of
Alaska, from the constitutional budget reserve fund;
and providing for an effective date."
HOUSE BILL NO. 55
"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."
10:34:51 AM
CATHY MUÑOZ, COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, introduced herself. She relayed that
many of her colleagues were in the room and online for
questions.
Commissioner Muñoz introduced the PowerPoint presentation
"FY2026 Department Budget Overview" dated February 11, 2025
(copy on file). She began on slide 2 and offered an
overview of the reach of the Department of Labor and
Workforce Development (DLWD) in the state. The board had a
broad geographic footprint, spanning from Southeast Alaska
to the Arctic. She noted that the department oversaw 14 job
centers across the state. There was also a satellite site
that had recently reopened in Kotzebue that offered
itinerant job services. Additionally, the department
operated 11 offices within the Division of Vocational
Rehabilitation (DVR). Under its broader organizational
umbrella, the department also oversaw the Alaska Vocational
Technical Center (AVTEC) in Seward, the Workers'
Compensation Division (WCD), the Administrative Services
Division (ASD), the Labor Standards and Safety Division
(LSSD), and the Alaska Workforce Investment Board (AWIB).
She reported that the department administered nine regional
Technical and Vocational Education Program (TVEP) grants,
31 State Training and Employment Program (STEP) grantees,
and 10 construction academies.
Commissioner Muñoz continued to slide 3 and explained that
DLWD had recently opened the Office of Citizenship
Assistance (OCA), which was a major milestone. The office
had first been authorized in statute in 2006 but it had not
become operational until recently. She indicated that a
physical office had been established in Anchorage and
staffing efforts were underway. She relayed that the
department had made efforts to support legal immigrants by
providing employment and training opportunities. The
provided services included English as a second language
referrals, credential translation, and other forms of
employment assistance. She added that department had
increased training support through its Job Center Network
(JCN) and from FY 23 to FY 24, training support had
increased 58 percent. She attributed the growth in part to
a successful social media campaign targeting young workers
between the ages of 18 and 30. As a result, there was a
marked increase in the number of successful and industry-
recognized certifications issued during that time period.
Commissioner Muñoz explained that the department had
examined federal training funds administered through the
JCN and reviewed income eligibility requirements, which had
previously been highly restrictive. The department loosened
the requirements and expanded access to training support.
She noted that one-time funding through STEP had been used
to further bolster training opportunities.
10:39:16 AM
Commissioner Muñoz shared that there were some recent
collaborative projects with the Department of Education and
Early Development (DEED). One of the initiatives was a
career guide project, which placed career guides in
Fairbanks and Bethel to support rural schools in promoting
career awareness and mapping out training pathways for
students. Another recent collaboration with DEED involved a
teacher apprenticeship program aimed at rural school
districts. Some participants in the program were
paraeducators who were able to work toward a bachelor's
degree in education through on-the-job training and a paid
apprenticeship model. She explained that the educators
could then return to their home communities and find
employment as qualified teachers.
Commissioner Muñoz added that there were additional efforts
made through the Alaska Occupational Safety and Health
(AKOSH) program. She shared that Alaska was one of 26
states that operated a state plan for the Occupational
Safety and Health Administration (OSHA). The department had
recently implemented a diversionary program that allowed
businesses with either a first-time workplace violation or
the first violation in five years to avoid financial
penalties if the businesses agreed to work with the
department's training staff to resolve safety issues. The
collaborative initiative had already resulted in the waiver
of over $600,000 in penalties and had helped improve
workplace safety.
Commissioner Muñoz relayed that the department had recently
become a SkillBridge participant through a partnership with
the U.S. Department of Defense (USDD). The program allowed
DLWD to advertise state jobs on the USDD employment
platform. If a transitioning service member applied for and
secured employment, USDD would cover the first six months
of wages during the transition out of active military
service.
Co-Chair Josephson asked if SkillBridge was a new program.
Commissioner Muñoz responded that she was unsure how long
the program had existed, but it was a new program for
Alaska. She added that the department was also prepared to
provide technical assistance to other employers interested
in becoming SkillBridge participants.
Commissioner Muñoz continued that there were current
efforts to improve the Certificate of Fitness process,
which governed certification for electricians and plumbers
in Alaska. She explained that the department was pursuing
improvements through various means and continued to support
Alaskans using both state and federal training funds. The
department was in the process of implementing changes
through a regulatory package currently under development.
She stated that the proposed changes would allow military
service members to receive credit toward part of the
required hours needed to sit for licensure examinations.
The department was also pursuing expanded reciprocity
agreements with other states. She relayed that Alaska
already had reciprocal licensing agreements with
approximately 13 states in the electrical field and the
department aimed to broaden acceptance to include licenses
from any state with comparable licensure standards. She
projected that the expansion could allow Alaska to accept
licenses from up to 40 other states, which would enable
licensed professionals to relocate and work in Alaska more
easily.
Commissioner Muñoz noted that there a provisional licensure
measure that was adopted by the legislature during the
previous session was also being implemented. The provision
would enable individuals relocating to Alaska to work under
a provisional license for one year while they completed the
state's certification process.
10:44:06 AM
Representative Allard asked what the status of nurse
compacts in Alaska was. She was concerned about limited
progress, especially given the high number of military
personnel in Alaska.
Commissioner Muñoz responded that nursing licensure did not
fall under DLWD's jurisdiction. She clarified that the
department oversaw the licensure of electricians and
plumbers. She acknowledged that there was an active effort
underway to pursue a multistate compact for nursing
licensure, but she could not speak specifically to the
status.
Representative Hannan noted that there were several items
in the presentation that involved federal funds or federal
grants, including the SkillBridge program and the reopening
of the Kotzebue Job Center. She pointed out that DLWD was
highly dependent on designated federal grants and asked
whether the department had been affected by the recent U.S.
Office of Management and Budget (OMB) memos directing
agencies to stop awarding funds associated with certain
executive orders. She asked whether any programs had been
paused or if the department had serious concerns about the
continuation of grant funding into the next fiscal year.
Commissioner Muñoz responded that the department had
conducted an analysis of the potential impacts of the
federal memos on the grant programs and found that the
impact was minimal. She deferred to her colleague from DLWD
for more detail.
10:45:54 AM
DAN DEBARTOLO, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF LABOR AND WORKFORCE DEVELOPMENT, explained that the
department conducted a review of its federal grants
following the issuance of the federal executive order
regarding diversity, equity, and inclusion, (DEI). Many of
the grants contained standard bullet point language that
referenced DEI-related activities. The department consulted
with its program directors to determine whether the
referenced language would require the cessation of
services. He relayed that the department had decided that
its work fell within the scope of the executive order and
that immediate suspension of services was not warranted.
However, there was one specific grant administered through
AWIB that had included equity-related coordination efforts
and some of the activities were paused until further
federal guidance could be issued. The response was
temporary and cautious and the department was currently
awaiting formal guidance, which it had been told to expect
within 60 days.
Representative Hannan commented that she was enthusiastic
about the SkillBridge program and she thought it was a
promising initiative. She was concerned about the
transition process for military personnel entering the
civilian workforce. She asked whether there was any risk
that individuals who were just beginning their six-month
covered employment under the program might be cut off due
to shifting federal guidance.
Mr. DeBartolo responded that the department did not
currently anticipate that there would be disruptions. He
explained that if stricter federal guidance was issued in
the future, the department would notify the legislature
accordingly.
Co-Chair Josephson asked whether the department had sought
a legal opinion regarding the enforceability or
implications of the federal executive orders or whether it
had relied on the assumption that the federal government
held the authority to revise or remove the requirements.
Mr. DeBartolo replied that since the executive orders in
question applied to all executive branch departments, OMB
had taken the lead in coordinating the response. He noted
that OMB had requested information from departments
regarding potential impacts. As a result, any formal legal
analysis would be initiated by OMB as DLWD had not
conducted its own internal legal review.
10:48:54 AM
Representative Galvin appreciated the department's January
workforce publication, but the report focused primarily on
job growth in sectors such as mining, seafood processing,
and oil and gas. She asked how the department was
addressing workforce needs in other sectors with large
numbers of vacant positions, such as education and health
care. She asked for more information about what actions
were being taken to address labor shortages in critical
sectors and if there was a plan to fill the positions.
Commissioner Muñoz asked for clarification that
Representative Galvin was requesting specific information
about certain sectors, such as education.
Representative Galvin responded in the affirmative.
Commissioner Muñoz responded that she was excited about the
recently launched teacher apprenticeship program which was
a significant development for the state. She explained that
the initiative was the first time apprenticeship had been
used in Alaska as a pathway into the teaching profession.
The program was especially focused on rural schools and
aimed to keep participants rooted in their home
communities. She noted that paraeducators could receive on-
the-job training while completing educational requirements
through distance learning in partnership with the
University of Alaska (UA). Participants were paid during
training which allowed them to remain in their communities
and contribute directly to their local schools. Broadly
speaking, the state continued to see job growth in
construction, oil and gas, and health care. She referenced
a recent article in the Anchorage Daily News (ADN) that
highlighted the high demand for health care workers in
Alaska.
Representative Galvin asked how many individuals were
currently enrolled in the teacher apprenticeship program.
She asked for more information about the department's
strategies to ensure that more Alaskans were being trained
for the jobs identified in workforce reports. She pointed
out that 45 percent of oil and gas jobs in Alaska were
currently held by non-residents and emphasized that these
were high-paying jobs that Alaskan families would benefit
from securing.
Commissioner Muñoz replied that the teacher apprenticeship
program's initial cohort could accommodate up to 30
individuals. She asked Representative Galvin to repeat her
second question.
Representative Galvin asked what the department was doing
to ensure that individuals living in Alaska could get in-
state jobs. She noted that there were many education jobs
that were being filled through federal visa programs such
as the J-3 visa. She asked what was being done to help
Alaskans get the best jobs in the state.
Commissioner Muñoz responded that the solution began with
education, training, and awareness. She explained that one
of the department's key objectives was to raise awareness
about available employment opportunities throughout the
state. She noted that Alaska had a robust network of
training providers extending across the state and one of
her priorities was to visit every regional training
provider in the state to gain a deeper understanding of the
workforce landscape. The department needed to focus on
connecting high school students with clear career pathways
that could lead the students to well-paying jobs, many of
which required specialized training. She assured the
committee that the department was able to support the
efforts.
10:54:15 AM
Representative Allard returned to the topic of DEI. She
understood that DEI was based on sexual orientation and
race and asked how much federal funding the department had
lost due to DEI-related issues.
Mr. DeBartolo responded that the department had not lost
any federal funds connected to DEI. The state's drawdowns
on the grants were uninterrupted and there had been no
indication that funds would be immediately withheld. The
department was trying to anticipate whether there would be
a cessation of funds. There was concern amongst the states
as departments awaited further guidance from the federal
administration. He reiterated that further guidance on
whether funds would be withheld was expected within 60
days.
Representative Allard asked what the total dollar amount of
the funds was.
Mr. DeBartolo replied that he did not have the figures on
hand but could follow up with the specific amount related
to DLWD.
Representative Allard asked for clarification that Mr.
DeBartolo did not have the number.
Mr. DeBartolo responded that he did not know the amount of
funds that might be at risk.
Representative Allard asked whether the grant funds were
used specifically for job training or were instead used in
consideration for hiring decisions.
Mr. DeBartolo responded that each federal grant
administered by the department had a clearly defined
purpose and constituency. The purpose was explicitly
spelled out in the language of each grant. He explained
that some grants served youth or at-risk youth, while
others were targeted toward military members transitioning
into civilian life. He reiterated that the purpose and
permitted use of funds were defined in the language of each
grant.
Representative Allard asked whether any of the grants were
used in ways that directly supported individuals based on
sexual orientation or race. She asked whether military
members were considered part of the DEI network. She
understood that military members were not included.
Mr. DeBartolo clarified that he was not suggesting military
members were part of any DEI network. He relayed that he
was not sure what Representative Allard was referring to
when she spoke of a DEI network. He emphasized that the
department's programs were governed by the terms and
conditions of each individual grant and that hiring
decisions were not made based on sexual preference or race.
He explained that all hiring decisions followed Alaska's
equal opportunity laws. The responsibility for ensuring
compliance with each grant's requirements and following the
language of the grant rested with individual program
directors.
10:57:57 AM
Mr. DeBartolo continued on slide 4 and detailed the
organization and mission delivery of the department. He
explained that DLWD's mission was to provide all Alaskans
with safe and legal working conditions and opportunities
for employment. He relayed that the department's
organizational structure consisted of six major divisions.
Mr. DeBartolo explained that the Commissioner's Office and
ASD, shown in green on the slide, was contained under the
department's Leadership and Support category and accounted
for approximately 11 percent of the total departmental
budget. The next two divisions were Workers' Compensation
and Labor Standards and Safety, which fell under the
department's Protect Workers category. The two divisions
were shown in orange on the slide and represented 15
percent of the overall budget. The Income Replacement
category was highlighted in purple and was allocated 17.9
percent of the budget. The category included key services
such as unemployment insurance and disability
determinations, which were administered through Employment
and Training Services and Vocational Rehabilitation. The
two divisions supported the department's core mission of
workforce development, alongside AWIB and AVTEC. The
Workforce Development category was shown in blue on the
slide and represented more than half of the department's
total budget.
Representative Hannan had recalled hearing that the Income
Replacement category accounted for 21 percent of the
budget, but the slide stated that it was 17.9 percent. She
asked which was correct.
Mr. DeBartolo responded that the correct figure was 17.9
percent.
Mr. DeBartolo moved to slide 5, which included a graph of
the past ten fiscal years of the department's authorized
operating budget. He noted that the department's total
budget had only recently returned to the level it held in
FY 15. He attributed the increase to the reauthorization of
TVEP in the previous year. As part of that reauthorization,
allocation amounts to specified recipients had increased,
which had resulted in a noticeable jump in designated
general funds (DGF) between FY 24 and FY 25. He emphasized
that the increase allowed more training funds to be made
available to the department's grant recipients.
Mr. DeBartolo explained that the most significant
reductions in unrestricted general funds (UGF) had occurred
between FY 15 and FY 19, during which approximately $12.5
million in state funding had been eliminated. The
department was currently operating with $10.8 million less
in UGF and $1.5 million less in federal authorization than
it had been a decade earlier. He stressed that the
department had demonstrated strong fiscal stewardship over
both state and federal resources considering the rising
costs for goods, services, and personnel.
Representative Galvin asked for more information about the
reasoning for the decline in federal funding between FY 15
and FY 19. She asked whether the subsequent increase
beginning in FY 20 was related to a change in
administration or driven by other factors.
Mr. DeBartolo responded that federal authorization had
historically fluctuated due to various factors. He
explained that one of the primary drivers of change had
been the Division of Employment and Training Services
(DETS). At times, programs were established temporarily in
response to immediate needs, resulting in short-lived
increases in funding. as the temporary programs phased out,
federal support decreased. He noted that the department
made efforts to adjust authorization levels annually. The
department maintained sufficient overhead to sustain
essential services while recognizing that not all funds
were guaranteed to be received.
11:02:50 AM
Mr. DeBartolo continued on slide 6 and relayed that since
the department was conducting a ten-year review of its
budget, it was logical to also examine a year-by-year
change in position counts to highlight the overall downward
trend in staffing. He relayed that the department reached
its lowest staffing levels in FY 20 and the total full-time
position count had declined by 129 over the past decade.
Mr. DeBartolo reported that for the current fiscal year,
the department had budgeted for 680 permanent full-time
positions, 43 permanent part-time positions, and 21
temporary or non-permanent positions, including interns. As
of December 31, 2024, 570 of the positions were filled.
Representative Hannan asked for confirmation of the current
filled position count.
Mr. DeBartolo responded that 570 of the FY 25 budgeted
positions were filled as of the end of the 2024 calendar
year.
Co-Chair Josephson asked Commissioner Muñoz whether the
department was actively recruiting in order to fulfill its
full staffing capacity and achieve its mission.
Commissioner Muñoz responded that some of the positions
included in the department's totals were what she referred
to as "temporary permanent" roles that could be brought
back during periods of high demand. She gave the example of
the unemployment insurance program during the COVID-19
pandemic, when additional staff were hired to manage the
volume of claims. The positions still technically existed
in the department, but the positions were currently vacant
and not necessary. She explained that active recruitment
was underway in other areas. For example, the department
was hiring for positions in job centers and for two roles
in OCA. She added that ASD also had ongoing recruitments,
though she deferred to Mr. DeBartolo to provide further
detail.
Mr. DeBartolo confirmed there was at least one open
position in ASD.
11:05:32 AM
Mr. DeBartolo continued to slide 7. He explained that the
next six slides would outline the proposed FY 26 funding
splits by division, along with budgeted position counts. He
began with the Commissioner's Office and ASD, which housed
the department's largest board and oversaw key policy
functions, financial functions, human resources,
technology, and research functions.
Mr. DeBartolo highlighted the work of the research and
analysis section, which provided labor market information
and published a report called Alaska Economic Trends. Over
the past year, the team had published 26 articles across 12
monthly issues. The publication had grown to 7,000 digital
subscribers and received over 100,000 page views. He
encouraged members to read the latest issue.
Mr. DeBartolo continued to discuss AWIB, which was
responsible for many of the department's grant programs. He
explained that over the last five years, STEP had averaged
30 grantees annually and served over 3,000 participants. In
FY 25, the department focused on leveraging established
training partnerships and approved grant requests to expand
the reach. As a result, the program had already served
4,175 participants, surpassing the five-year average. The
department anticipated a 61 percent increase in STEP
participants by the end of the fiscal year.
Representative Hannon asked whether the department could
provide research data to the legislature if it was
requested. She was interested in the comparison between
public employees' wages to private sector wages.
Mr. DeBartolo responded that the department was waiting to
provide the necessary information to the legislature due to
the ongoing salary study that was being conducted by the
Department of Administration (DOA). He clarified that all
research requests would be prioritized based on the nature
of the request, whether from the legislature, private
stakeholders, or other departments. He explained that DLWD
would communicate its capacity and anticipated time frame
for fulfilling such requests.
Representative Hannan asked if DLWD had been asked to
provide data to the contractor of the salary study.
Mr. DeBartolo responded that the department had not been
involved in providing data for that study. The study had
been managed solely by DOA.
Representative Galvin asked what the typical duration of a
salary study was.
Mr. DeBartolo responded that the details of the salary
study were outside his expertise. He relayed that a
classification study, which was a different process, would
typically take about three months. He added that the
purpose of a classification study was not to assign new
salary ranges but to ensure that job classifications
aligned with the type of work being done.
Representative Galvin asked if a study would be outdated if
it took three months. She was concerned that the data would
no longer be relevant if the study took too long.
Mr. DeBartolo responded that the aging data was a concern,
but he could not provide a definitive answer as he was not
an economist.
11:10:56 AM
Mr. DeBartolo continued that the funds for OCA first became
available in July of 2024. He noted that much of the
department's efforts had been directed toward building out
a physical space for the office, which involved tasks such
as constructing walls, setting up furniture, and ensuring
the space was properly wired. The office was completed at
the end of 2024 and hiring for positions was now actively
underway.
Mr. DeBartolo continued to slide 8 and WCD, which ensured
the fair and efficient delivery of benefits to workers. He
relayed that benefits included indemnity, medical, and
vocational rehabilitation benefits, and the goal of the
division was to help workers return to work at a reasonable
cost to employers. The division was primarily funded by DGF
collected from a 2.5 percent fee on workers' compensation
insurance premiums in Alaska. Additionally, the division
paid benefits from several funds, including the Workers'
Compensation Benefit Guarantee Fund, the Second Injury
Fund, and the Fishermen's Fund. He shared that the division
had restructured some divisional positions, which allowed
the Special Investigation Unit (SIU) to add a new
technician. The restructuring had led to positive results
for the division. Employers were now notified more quickly
if their insurance policy had lapsed and the SIU had
increased the output of investigations by moving the
research function to the technician position, which allowed
the investigators to concentrate on other issues like fraud
leads.
Co-Chair Josephson asked if WCD would be the appropriate
division for complaints involving alleged misclassification
of workers. He provided an example in which a general
contractor was said to have listed individuals who
functioned as employees as independent contractors. He
asked if such complaints regarding workers' compensation
would be directed to the division.
Mr. DeBartolo responded that such complaints were often
received through both WCD and LSSD. He explained that there
were times when a case might be more appropriately handled
by one over the other.
Commissioner MunozCommissioner Munoz added that part of the
analysis would be determining whether an entity was an
independent contractor or if it was an employee-employer
situation. She confirmed that classification was a core
component of the analysis.
11:14:33 AM
Mr. DeBartolo continued to slide 9 and provided an overview
of LSSD. He explained that the division was responsible for
ensuring safe and legal working conditions across Alaska.
The primary functions of the division included wage and
hour investigations, mechanical inspections of equipment
such as elevators, boilers, and electrical systems, and
consultation and enforcement efforts related to
occupational safety and health. He noted that the
division's operations had been funded largely by DGF, with
additional support from federal funding and a state general
fund match.
Co-Chair Josephson asked for more information on Executive
Order (EO) 135, which appeared on the slide.
Mr. DeBartolo replied that EO 135 had pertained to what had
previously been the Alaska Safety Advisory Council (ASAC).
The EO had passed the previous year and had restructured
the council and renamed it the Alaska Safety Advisory
Program (ASAP).
Representative Hannan asked for more information about
inspector positions within the department. She asked if
plumbing and electrical inspectors had been part of LSSD,
and whether the positions were currently filled. She
acknowledged that the department had faced challenges in
recruitment over the last few fiscal years. She asked for
more information on the current status of the inspection
roles.
Mr. DeBartolo responded that during a recent budget
subcommittee meeting, LSSD Director Tanya Keith had
reported a small number of unfilled positions. He suggested
that Ms. Keith provide more specific details.
TANYA KEITH, DIRECTOR, LABOR STANDARDS AND SAFETY DIVISION,
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT (via
teleconference), confirmed that the department currently
had one electrical inspector and one plumbing inspector
position open.
Representative Hannan asked where the positions were
located.
Ms. Keith replied that one position was located in
Anchorage and the other was in Fairbanks.
Mr. DeBartolo advanced to slide 10 and offered an overview
of DETS. He explained that DETS had partnered with
businesses and industries across the state to build a
trained and prepared workforce. The improvements had been
achieved through the provision of labor exchange services,
employment and training programs, and unemployment
insurance support to both individual Alaskans and
employers. He relayed that DETS was the department's
largest division, with the majority of its operational
funding provided by the federal government. He noted that
the division's responsibilities had primarily been
organized into workforce services and development and
unemployment insurance.
Mr. DeBartolo continued on slide 11 and discussed the
Division of Vocational Rehabilitation (DVR). Each year, DVR
helped hundreds of Alaskans with disabilities prepare for,
obtain, and retain meaningful employment. He explained that
if Alaskans with disabilities wanted to work or continue
working and experienced physical, intellectual, or medical
conditions that made doing so difficult, they might be
eligible for DVR services. He noted that DVR also operated
the Mature Alaskans Seeking Skills and Training (MAST)
program, which provided employment assistance or skills
training to Alaskans aged 55 and older. He noted that DVR
was primarily funded by federal dollars, while the majority
of state UGF served as matching funds.
Mr. DeBartolo proceeded to slide 12, which covered AVTEC.
He relayed that AVTEC was located in Seward and was the
department's only 24-7 training facility. He stated that
AVTEC's mission was to deliver flexible, accessible, and
affordable workforce training that responded to the dynamic
needs of business and industry while serving Alaska's
diverse communities. He explained that AVTEC's funding came
from a balanced mix of tuition and fees, UGF, and DGF
through TVEP.
11:19:40 AM
Mr. DeBartolo moved to slide 13 which detailed the
department's operating budget trends from FY 24 to FY 26.
He noted that he would discuss the specific proposed
changes on the following slide but highlighted a few key
points. He explained that the decrease in UGF from FY 24
had resulted from the expiration of one-time multiyear
training funds that had originally been authorized in FY
23. He noted that the increase in DGF was largely tied to
TVEP. He explained that DLWD used the third fewest UGF
dollars among state departments and that approximately half
of its total budget came from federal sources.
Co-Chair Josephson asked for clarification about the one-
time multiyear training program that had expired.
Mr. DeBartolo responded that in FY 23, the department had
received $7.4 million in UGF that had been made available
across both FY 23 and FY 24. The funding had been used to
expand training opportunities through AWIB, with a
significant portion allocated to DETS for direct services
to individuals. He noted that the department had
successfully utilized nearly the entire allotment.
Co-Chair Josephson asked if the funds had come from a
federal grant.
Mr. DeBartolo responded that the funding had been state UGF
dollars. He stated that the appropriation had been part of
the governor's initial budget proposal and had received
legislative approval.
Mr. DeBartolo moved to slide 14 and detailed the
department's current budget requests. He began with the
first item, which involved moving the TVEP funding into the
language section of the budget. He explained that the
department's revenue projections for TVEP were conducted
multiple times per year by the unemployment insurance trust
actuary. By including the funding in the language section,
the department could more easily and quickly request an
increase in authority through OMB if revenues were to rise
midyear. The inclusion would also allow the department to
more easily and efficiently allocate funds without needing
to return to the legislature for additional authority.
Mr. DeBartolo addressed items two, three, and four on the
slide, which included requests related to Workers'
Compensation, Mechanical Inspection, and ASAP. He stated
that the requests had stemmed from changes approved at the
end of the previous legislative session that ultimately had
not made it into the final enacted budget. He explained
that the Stay-at-Work Program and the Certificate of
Fitness Program had missed inclusion during the conference
committee process despite fiscal notes having been
prepared. The funding request for ASAP was connected to the
implementation of EO 135, which he had already discussed.
He stated that the budget increment requested for the
program was intended to fund two full-time positions that
would support the program in its entirety. Historically,
the program had relied on volunteers throughout Alaska.
However, the volunteers had been able to carry out only a
limited scope of responsibilities. Through the executive
order, the department aimed to bring all functions of the
former ASAC in-house to ensure consistent oversight and
support moving forward.
Mr. DeBartolo continued to the next item related to
workforce services. He noted that during the previous year,
the department had been granted $2.4 million in federal
authority in anticipation of a partnership under the
Infrastructure Investment and Jobs Act (IIJA) with the
Department of Transportation and Public Facilities (DOT).
Over the summer of 2024, DOT informed DLWD that there were
far less funds than were initially anticipated. As a
result, funding had to be prioritized and the proposed
partnership had not materialized. The department was
requesting to reverse the $2.4 million in federal authority
as it was no longer needed.
Mr. DeBartolo continued by discussing the next item, which
was a $2.15 million reduction in federal pandemic receipt
authority that was part of a routine budget cleanup. The
pandemic-related funds had diminished over time and the
department had gradually stepped down the authority to
reflect current needs.
11:24:53 AM
Mr. DeBartolo continued to slide 15 which concerned an
increment for expanding Alaska's electrical and plumbing
workforce. He acknowledged that Representative Hannan had
asked about the initiative during a previous meeting. He
explained that AVTEC would expand its capacity to offer
more plumbing classes and grow the industrial electrical
program from 15 seats to 30 seats.
Mr. DeBartolo stated that AVTEC had the capacity and space
to offer more plumbing classes immediately. The goal for
the industrial electrical program was to accommodate more
students each year and address the recurring waitlist. He
emphasized that increasing the number of trained
electricians was a workforce priority and that the expanded
program would help meet the goal.
Mr. DeBartolo moved to slide 16 and described the current
industrial electrical lab setup, which included large
industrial electrical panels used by 15 students. The plan
was to double the lab space by building out the other half
of the facility. The supplemental request would primarily
be used for new equipment at a cost of approximately
$660,000 and an additional $85,000 for shipping the
materials to Seward due to the size and weight of the
items. The remaining $91,200 would fund an adjunct
instructor to set up the lab and prepare the space ahead of
the fall semester. The total cost of the request was
$888,000 in UGF.
Mr. DeBartolo explained that the corresponding FY 26
increment would fund the ongoing position of a second full-
time instructor for the expanded industrial electrical
program. He acknowledged that enrollment might not reach
full capacity immediately but emphasized the importance of
having the necessary resources and infrastructure in place
to support the ramp-up of the program.
Representative Hannan noted that the FY 26 capital budget
request was a one-time expenditure, while the ongoing
increment to support the expanded program would add
$182,000 annually to the DLWD's base budget if adopted. She
asked if her understanding was correct.
Mr. DeBartolo responded that the FY 25 supplemental was a
one-time request to procure and install the necessary
equipment and to bring on an adjunct instructor to help
prepare for the expanded instructional program. He
emphasized that the funds would not be needed on an ongoing
basis. The FY 26 increment would instead cover the salary
and related administrative overhead for the new full-time
instructor.
Representative Hannan noted that Mr. DeBartolo had used the
term "supplemental," but the request also appeared in the
capital budget. She understood that the total cost was just
over $1 million and asked for confirmation that the amount
would not be added to the department's base budget
permanently. She reiterated her understanding that only
$182,000 of the request was ongoing.
Mr. DeBartolo responded in the affirmative. He clarified
that the over $1 million expense would not be added to the
base.
11:28:39 AM
Co-Chair Josephson expressed that he had lingering concerns
that could be addressed offline regarding expiring
programs, including one of the governor's own initiatives.
He expressed hope that the programs had been sufficiently
resourced. He understood that Alaska did not offer
unemployment benefits as generously as other states.
Instead, the state seemed to invest more heavily in
retraining and workforce development programs funded by the
unemployment insurance tax. He wondered whether Alaska's
weekly unemployment compensation was low relative to other
states, and if the state had instead taken a policy
approach favoring reinvestment in workforce services.
Commissioner Muñoz replied that she would not use the term
"instead." She clarified that the training portion was
supported by the employee's contribution, which came from a
portion of the 0.5 payroll tax. Most businesses paid a 1
percent tax on wages and the resulting funds were directed
to the Unemployment Insurance Trust Fund, which covered
benefits for individuals who were temporarily out of work.
The trust fund balance currently stood at approximately
$740 million and was overcapitalized in relation to the
state's present need. Even during high-demand periods such
as the pandemic, the fund remained solvent. The fund dipped
to $250 million at its lowest point during the pandemic.
She noted that the fund was structured to rebuild quickly
and respond flexibly to economic conditions. She added that
Alaska had been one of the few states to maintain a solvent
trust fund throughout the pandemic.
Co-Chair Josephson commented that the information was good
to hear. He remained concerned about the relatively low
maximum unemployment benefit of reportedly around $350 per
week and asked how someone could live on that amount. He
acknowledged that the topic could be revisited at another
time.
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 was HEARD and HELD in committee for further
consideration.
Co-Chair Josephson reviewed the agenda for the afternoon's
meeting.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2025_0211_DOLWD Department Overview_House Finance Committee_2025_0207 Final.pdf |
HFIN 2/11/2025 10:30:00 AM |
HB 53 |