Legislature(2013 - 2014)HOUSE FINANCE 519
02/06/2014 10:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB31 | |
| HB150 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 31 | TELECONFERENCED | |
| + | HB 150 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 150
"An Act extending the unemployment contributions for
the Alaska technical and vocational education
program."
11:13:00 AM
REPRESENTATIVE MARK NEUMAN, SPONSOR, discussed the
legislation. He shared that he had carried a related bill
in the past that had extended the sunset date for the
Technical Vocational Education Program (TVEP). He noted
that a flow chart was present in members' packets ["State
of Alaska Tax Flow Chart: Unemployment Insurance, State
Traiining and Employment Program, Technical and Vocational
Education Program"] (copy on file).
Co-Chair Stoltze relayed that the committee would hear a
presentation by Vice-Chair Neuman and would then hear
public testimony prior to any questions.
Vice-Chair Neuman believed an important part of the
discussion pertained to the origin and flow of the money
(shown in the flow chart). The bill also included a sunset
date on the extension. The chart showed federal withholding
taxes for several programs. He detailed that TVEP came out
of the unemployment insurance tax rate; the rate had been
0.1 percent in the past and had increased to 1.5 percent a
few years back. The federal funds were distributed by the
Department of Labor and Workforce Development (DLWD)
through the schools. He noted that the bill contained a
chart showing how the money was distributed; money was
spread across various geographical locations. He remarked
that some forthcoming issues had come to light. He pointed
to the bill's immediate effective date on page 2, line 7.
He believed the committee was addressing bill version U
[actual bill version before the committee was version N].
He relayed the importance of taking action in the current
fiscal year so that federal funding was not lost. He
pointed out that there were schools hoping to be added to
the list included in the legislation. He noted that
Representative Peggy Wilson had a school in her district
that was interested in receiving some of the funds.
Additionally, he had spoken with Representative Costello
about DLWD money included in the department's operating
budget. He relayed that HB 150 had been included in Section
17 of the governor's education bill. He had spoken with
DLWD Commissioner Blumer who had communicated the
department's intent to remove some language. He discussed
the governor's proposed education bill and relayed that
Sections 1 through 5 had described the requirement to
report funding to DEED and DLWD. Many of the school
districts had struggled with the requirement because it
included social security numbers for youths under 18 years
of age. Subsequently, the discussion with Commissioner
Blumer had been to remove the related requirements. He
discussed the priority of putting the money to work.
11:17:31 AM
Vice-Chair Neuman continued to explain that the bill. He
relayed that DLWD would ensure that the vocational schools
covered under the legislation were truly teaching
vocational programs. He stated that the bill pertained to
all Alaskans because of the unemployment insurance
benefits; the goal was to ensure that adult training
programs were available. The programs had been incorporated
together and comprised a great training tool for the
schools; it provided the opportunity for adults and younger
students to work together at the same level. He relayed
that work with Commissioner Blumer was ongoing. He referred
to discussion about adding more schools and surmised that
the conversation would continue. The bill before the
committee only made a change to the sunset date [the sunset
would be extended to June 30, 2024]. He noted that the
program would be examined in the governor's education bill
as well. He preferred to address the effective date as
contained in HB 150. On a separate note, he believed there
needed to be discussion about how the funds were
distributed to the various schools. Currently DLWD had some
regulations, but he believed sideboards related to
qualification for funds should be implemented. He thought
that various issues should be addressed including how the
money was distributed geographically, was the funding even,
and was the program competing for funds with university
programs. He suggested that any added schools receive funds
out of the 50 percent allotted to the University of Alaska
given that its budget was the largest. There was currently
about $10.8 million available for the program. He believed
it was appropriate to address the issues in the committee
process. He recognized that changes to the formula
calculation could be made by the legislature in the future.
He corrected that the bill before the committee was version
N.
11:20:43 AM
Representative Costello appreciated the legislation and
believed that vocational education and jobs were a
significant part of the state's work. She mentioned that
the Southern Southeast Technical Education Center and
Ilisagvak College's community and workforce development
program were likely candidates to receive some of the
funds. She wanted to hear from the department about how
some entities made it on the list and others did not. She
shared that the funding did not really fit in the current
Department of Commerce, Community and Economic Development
budget; she believed the list in the bill made sense. She
asked if the sponsor planned to talk about the effective
date.
Co-Chair Stoltze asked Representative Costello to formally
move bill version N before the committee for consideration.
Representative Costello MOVED to place House Labor and
Commerce version N before the committee as a working
document.
Vice-Chair Neuman believed Representative Costello had made
some good points related to how the money was distributed
and used to ensure there was equality across the state. He
agreed that the school mentioned in Southeast was a
probable candidate for the funds; however, he sensed that
the numbers had been determined based on which programs had
applied in the beginning. He was unsure the method was the
best way to distribute education funds. He agreed that the
committee may want to look at changing the effective date
from immediate to June 30, 2014. He wanted to ensure that
funding would not be lost. He noted that further discussion
on the issue could be addressed in the governor's education
legislation.
11:23:30 AM
Co-Chair Stoltze wanted to address why the University of
Alaska and the University of Alaska Southeast (UAS) were
listed as two separate recipients in the bill.
Representative Munoz believed the reason UAS had been
designated as a separate entity was because it had had
trouble accessing the funding despite an active and
successful vocational education program.
Co-Chair Stoltze thought that the University of Alaska
Anchorage may want the same thing as UAS to guarantee a
spot at the table.
Vice-Chair Neuman remarked on the possibility of taking
some of the funds away from the university. He relayed that
many of the schools contracted with the university for
services.
11:25:16 AM
Co-Chair Stoltze relayed that if departments had concerns
they should speak to the entire committee.
CHARLES EDWARDSON, SOUTHERN SOUTHEAST ALASKA TECHNICAL
EDUCATION CENTER (SSEATEC), discussed a brief history
related to the center. He relayed that the center was
currently building dormitories that had been funded with
state capital appropriations and $5 million of the center's
own funds. He read a statement:
This isn't just funding for school funding just for
funding sake. What this is is a workforce development
effort to support economic development in our region.
Economic development has been identified in all of our
respective areas as a priority. Truly sustainable
economic development relies on strong workforce
development efforts to train our local residents in
the relevant industries in our respective areas. Our
strong point at SSEATEC is working with industry.
Mr. Edwardson communicated that the center had a
significant ratio of investment; the center had invested a
significant portion of its own funds into the effort.
SSEATEC was a vocational facility that offered certified
postsecondary courses. The facility housed the high schools
and the alternative high school in Ketchikan; students
received math and elective credits. The center identified
the relevant industries in Southeast Alaska and developed
its curriculum based on the information. He relayed that
the center partnered with many of the industries; the
mining industry had been identified as a target industry.
The center also used Department of Labor and Workforce
Development (DLWD) statistics on projected job growth. He
relayed that the center had been in close contact with
Ucore Rare Metals Inc. regarding its plan to develop a rare
earth mine on Prince of Wales Island; the company had
agreed to priority hire of SSEATEC program graduates and
had provided a letter of support to the legislature (copy
on file). The Alaska Ship and Dry Dock directly hired out
of the Ketchikan Construction Academy that was housed in
the SSEATEC facility.
Mr. Edwardson shared that the construction academy had 100
percent job placement with 78 percent of the students going
into the construction field. He relayed that the statistics
were reported to the DLWD; he reported the information to
the Construction Education Foundation. He referenced signed
guarantees from five additional general contracting
companies located in Ketchikan. He believed the center
qualified to be included in HB 150. He recognized concerns
about how the funds were allocated to the various included
entities. He stated that the unemployment contribution was
increasing and projected to increase as a result of job
placement of local residents; the tax funded the workforce
development and vocational training. He stressed the
center's success. He believed that it was the right time to
double down on the center's efforts. He communicated that
in an effort to sustain the economic development it was
necessary to continue funding facilities such as SSEATEC.
Mr. Edwardson stated that throughout the bill's history
when a facility came online adjustments had been made. He
believed that if vocational training programs acted as a
team people would continue to be put into the workforce
successfully; however, if the center was stifled for
funding it would not be possible to sustain its own
investment. The center needed the state's help to address
workforce development needs in Ketchikan.
11:32:22 AM
Mr. Edwardson relayed that the center was a public
facility. He detailed that it was a subsidiary of the
Ketchikan Indian Community. He pointed to the
constitutional right to enter into profitable businesses.
He acknowledged that education was not incredibly
profitable, but it was available to all Alaskans.
Co-Chair Stoltze asked for verification that the concept
was an example of educational choice at work.
Mr. Edwardson agreed. He addressed a concern that the
facility should be open to all Alaskans; he assured the
committee that it was a public facility open to all
Alaskans. He noted that the state had contributed $3.3
million into the center. He stated that the center paid
$1.2 million in education efforts annually. He discussed
state and its own expenditures. He relayed that the prior
year he had requested an operational match for $1.2
million; however, he had selected a percentage based on
other schools of the center's size and activity. Ideally he
would like a $1.2 million state match. He thanked the
sponsor for pointing out geographical concerns related to
the distribution of funds. He communicated that the
southern Southeast region of Alaska was not represented
other than the University of Alaska Southeast (UAS). He
shared that the center worked in close partnership with
UAS; the entities had a working agreement that the center's
programs would complement UAS programs. He stated that
funding did not exist for a true vocational technical
center focused on industry demands.
Co-Chair Stoltze observed that Mr. Edwardson would be a
continued part of the discussion. Mr. Edwardson was happy
to address any questions or concerns.
Co-Chair Stoltze remarked that there would be questions at
some time. Mr. Edwardson noted that how the funds would be
divided would be up to the legislature. Co-Chair Stoltze
believed Mr. Edwardson should play a part in determining
the fund source. Mr. Edwardson did have methods he could
discuss. Co-Chair Stoltze relayed that the issue would be
addressed at a later date.
Representative Wilson asked for further information on how
the program's outcomes were measured. She wanted to
understand how many people the center put to work and where
the students came from. She wanted to receive the same
information from each entity interested in the funds.
Mr. Edwardson agreed.
11:36:29 AM
Vice-Chair Neuman asked if the educational program was
operated through a for-profit company. Mr. Edwardson
replied that the program had the ability to be for-profit,
but he noted that education was not profitable. He shared
that it had been necessary to form a business outside of
the corporation in order to make the program available to
the public. The entity had its own business license and
line item in the budget; it had been necessary to separate
the entity from the tribe.
11:37:53 AM
STEVEN ANGASAN, SOUTH WEST ALASKA VOCATIONAL AND EDUCATION
CENTER, KING SALMON (via teleconference), spoke in support
of the legislation. He noted that the committee had a
letter of support for the entity in its packets (copy on
file). He discussed changes that had occurred in the past
three to four months. The center had received a federal
grant for a rural jobs accelerator program from the United
States Department of Agriculture; the grant was one of 15
awarded nationwide. The grant provided for fisheries job
training; however, the grant did not cover a significant
portion of the items the center hoped to accomplish. The
center had partnered with a regional community development
quota (CDQ) group based on a large number of courses in the
past quarter. He explained that the center compiled reports
with the state management team; the center had discovered
that its numbers in the last three months were larger than
the numbers in center's report in member's documentation
for 2010. He communicated that the center had made historic
steps towards providing a career guide for fisheries. He
believed DLWD was also working in the same direction. The
center had recently released a career guide and would
provide copies to committee members. He stressed without
funding from unemployment tax, entities like the center
would not exist. He relayed that state funding provided was
vital to all of the regional training centers. He noted
that financial difficulties in recent years had resulted in
cuts to the entity's regional meetings. He applauded Vice-
Chair Neuman for bringing the bill forward. He stated that
the bill would do much in the future for the region. He
relayed that the center had one of the highest outcomes of
wages in the state. He thanked the committee for working on
the legislation. He hoped the finances would be available
in the future.
11:42:39 AM
KAREN CEDZO, DELTA CAREER ADVANCEMENT CENTER AND PARTNERS
FOR PROGRESS IN DELTA, DELTA JUNCTION (via teleconference),
testified in support of the bill. She relayed that the TVEP
funds made available to Delta Junction had been life-
changing for youth and adults in the community. She
communicated that the goal was to provide training and
education to enable the students to pursue careers or
other. She expressed intent to provide additional
information throughout the bill process.
PEARL BROWER, PRESIDENT, ILISAGVIK COLLEGE, recognized that
the bill focused on the extension of the sunset date. She
understood that the funds were incredibly important to the
state. She asked that the college be considered as a
candidate for funding moving forward. She relayed that the
college was designated as a regional training center
through its connection with the North Slope Training and
Education Cooperative. She shared that the college had
offered 247 workforce development classes with close to
1,900 students in the last fiscal year. She believed the
college was meeting the workforce development training
needs across the state; it had had programs in Barrow to
Metlakatla. She stressed that the college was a statewide
entity and she looked forward to being part of the
conversation going forward.
Representative Gara agreed that the sunset should be
extended. He noted that Anchorage had vocational education
needs as well, but they were not as severe as needs in
small communities. He addressed that if funds were expanded
to additional entities that a portion of funds would be
taken from one of the other recipients. He wondered about
any recommendations.
Ms. Brower answered that she did not currently have
recommendations. The college had not been aware of TVEP
funding until recently. She was unsure why the college, as
a regional training center, had not been included in the
initial list of recipients. She would be grateful to be a
part of the conversation going forward.
Representative Gara replied that he hoped the college would
be a part of the conversation as well.
Co-Chair Stoltze believed he had visited all of the
facilities that were on the list and that hoped to be on
the list. He remarked that it was not possible to give 110
percent to the budget. He expressed frustration that DWLD
had been unable to answer a handful of questions. He
believed the department had provided an embarrassing
performance. He was frustrated when the public's money was
treated in a cavalier fashion.
11:48:53 AM
Representative Wilson replied that the subject was on the
upcoming DLWD budget subcommittee meeting. She would make
sure the questions were reiterated and answered. She had
also asked the department whether the funding percentage
could be changed.
Co-Chair Stoltze remarked that the legislature could make
the change.
Representative Gara agreed that answers were necessary in
order to make decisions during the legislative session. He
had been disturbed by testimony provided by DEED earlier in
the week related to the Base Student Allocation (BSA). He
understood the frustrations.
Representative Costello thanked Ms. Brower for her
testimony. She had been to Ilisagvik College and was
impressed by the entity. She relayed that its funding
currently fell within the Department of Commerce, Community
and Economic Development operating budget. She noted it was
difficult to determine where the funds for the college
should come from; the legislature had also discussed
providing funds from the capital budget. She appreciated
Ms. Brower's testimony and hoped that there could be
continued discussion about including other entities
deserving of the funds.
11:51:43 AM
Co-Chair Stoltze remarked on the complexity of the issue.
Vice-Chair Neuman understood that the issue was not simple.
He believed it may be prudent for the committee to look at
how the funds were distributed.
Co-Chair Stoltze remarked that the discussion would
continue. He recognized the importance of the issue to many
Alaskans. He commented that criteria other than merit could
have entered into the picture when it had been determined
which entities would receive the funding. He appreciated
the sponsor's work on the subject. He thanked the committee
for its participation.
HB 150 was HEARD and HELD in committee for further
consideration.