Legislature(1997 - 1998)
04/16/1998 03:12 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HB 302 - UNIVERSITY OF ALASKA OPERATING BUDGET Number 0713 CHAIRMAN BUNDE announced the next item on the agenda was HB 302, "An Act relating to the University of Alaska; and providing for an effective date." He explained the basics of the bill would suggest that if a foundation formula is valuable for an equitable distribution of state funds in K-12, then it's very likely that same philosophy would apply to postsecondary education. The bill does include a formula for distributing state funds based on the complexity of the study and the year in which a student is involved assuming that a senior of engineering requires more financial support than a freshman English major. The committee had before them a committee substitute which needed to be adopted for discussion. Number 0784 REPRESENTATIVE PORTER made a motion to adopt proposed committee substitute, 0-LS1285/F, Ford, 4/16/98, as the working draft. Hearing no objection, that version was before the committee. CHAIRMAN BUNDE directed the committee's attention to Amendment 1 to page 2, line 14, which calls for inflation proofing at 2 percent of the university's budget. He made a motion to adopt Amendment 1 on page 2, line 14, following "year", insert ", plus two percent for inflation". Number 0835 REPRESENTATIVE BRICE objected. He questioned what the 2 percent was based on - was it a conglomeration of all the various inflation factors such as periodicals, book costs, academic learning, et cetera. CHAIRMAN BUNDE responded it reflects the consumer price index (CPI) plus what he thinks is a reasonable amount in light of the state's current financial setting. REPRESENTATIVE BRICE inquired if it was straight CPI not adjusted higher education CPI. CHAIRMAN BUNDE said that was correct. He asked if there was further discussion. REPRESENTATIVE BRICE said he would feel more comfortable if it was a floating inflation factor based on what the university is facing in terms of funding. CHAIRMAN BUNDE reiterated he thought the 2 percent was feasible in today's financial situation. Number 0941 REPRESENTATIVE BRICE made a motion to amend Amendment 1 to delete 2 percent and insert 3 percent. Number 0958 CHAIRMAN BUNDE objected. REPRESENTATIVE BRICE commented that while 2 percent is nice, sometimes there's 10-15 percent inflation in certain areas of the university and in other areas there's none. It's very complex, and he thought a straight 2 percent would cause the university more problems in the future. He withdrew his amendment to Amendment 1. CHAIRMAN BUNDE asked if there was further objection to Amendment 1. Hearing none, Amendment 1 was adopted. He noted there were a number of individuals wishing to testify on HB 302. He asked Richard Benavides to testify at this time. Number 1032 RICHARD BENAVIDES testified via teleconference from Anchorage, providing his experience with the university system in Anchorage. He first attended the university in 1975 when there was just the Anchorage Community College, obtaining an associates degree in 1982. He is anticipating getting his bachelor's degree in May in journalism and public communication. He noted that Wendy Redman had previously testified she wasn't real supportive of the legislature micro managing the university system and the university had set up different committees in an effort to make some changes. For instance, the committee that's trying to increase the reallocation from $6 million to $10 million over the next three years from administration back into instruction which he thought begs the question of changing how the university is funded. He said, "We all realize that an English 111 class is going to cost a heck of a lot less than a doctoral or master's degree program, but I think we should stop this turf fighting where only doctoral degrees are allowed at the University of Alaska Fairbanks (UAF). If they feel that that's part of the problem with funding them, certainly the University of Alaska Anchorage (UAA) would love to have a couple of doctoral programs and while HB 302 may not be the answer to equitable or any more financing or funding for UAA, it sure does acknowledge the level of the courses the system has for all Alaska. .... it doesn't take a rocket scientist to see that Anchorage is the communications, transportation, financial (indisc.), administrative center for the majority of everything that occurs here in Alaska and the entire state should have a vested interest in ensuring that UAA can provide for the development of an educated work force for those areas. So, some change is necessary in the funding of UAA and if this legislation can at least eliminate that glaring fact, I'm all for it." CHAIRMAN BUNDE thanked Mr. Benavides for his testimony and asked Pearl Strub to present her comments at this time. Number 1160 PEARL STRUB, Representative, Bristol Bay Campus Advisory Council, testified via teleconference from Dillingham. She said during this past year, the Bristol Bay campus has served 650 students per semester in 32 different communities. The university system has sustained reduced budgets for many years and each of the reductions has had an effect throughout the system, reaching as far as the campus in Bristol Bay. She said the rural campuses have lost faculty and staff which has drastically reduced the effectiveness and services to students. She feels the budget reallocations between campuses if necessary are best worked out by the campuses rather than using a per student formula. Other factors need to be considered such as the number of sites a campus serves, the size of available classrooms, or the amount the campus has matched toward federal and private grants for increased outside funding coming into the campus program. Currently, the Bristol Bay campus runs on kind of a bare bones budget, but through educational partnerships the campus brings in an additional 50 percent over and above its operating budget from other sources in Bristol Bay, including shared funding with other agencies in order to serve the 32 villages serving the 650 students. Educational partnerships with nearly every social, business, educational and health organization operating in the Bay help to extend the campus services; however, if HB 302 is enacted, the campus, because of a relatively small enrollment, may be reduced beyond the point where it can continue to provide services to a needy and deserving student body. Most Bristol Bay students would not be able to move to a larger campus to obtain an education; such a move would be a financial and social hardship from which rural families, especially those relying on subsistence, would not be able to recover. Without available education, individuals would be locked into a total reliance on the fishing economy. MS. STRUB continued that this year more than ever, due to the disastrous fishing season and the prediction of an equally disastrous fishing season this year, Bristol Bay residents need access to training that would prepare them for other work. The campus is the most effective way to deliver the necessary training programs. Therefore, she requested that no allocation of funds be made by an enrollment formula, but rather the university be allowed to make the judgment call of where the funds should go based on current training needs. CHAIRMAN BUNDE thanked Ms. Strub for testifying and asked Kevin Tritt to come forward to present his remarks. Number 1315 KEVIN TRITT, President, Union Students, University of Alaska Anchorage, expressed his appreciation to the committee for addressing this issue. He was somewhat concerned with misinformation that may be circulating regarding the situation at the university. He also expressed concern that while this bill is an effort to rectify what is viewed by many people as an unfair situation, it would also be circumventing a process which the Board of Regents has put in place to do just that - address this issue. The allocation committee is looking at the distribution formula - the allocation model - to determine how the resources provided by the state may be better allocated between the campuses. He believed it would be premature to legislate a process that really should be the purview of the regents, before the board has had a full opportunity to examine the facts and come forward with a recommendation. He is very confident with the committee's ability to examine this issue and to come up with a resolution that's equitable for everyone. He said one of the things that's come up in the committee's investigation thus far is that the disparity most people are talking about generally refers to the 60/30 split between Fairbanks and Anchorage; i.e., 60 percent of the students go to Anchorage, but UAA only gets 30 percent of the funding, and 30 percent of the students go to Fairbanks, and UAF gets 60 percent of the funding. He said that is really deceiving and when the committee started looking into it, they realized it wasn't true. MR. TRITT explained the public arguments being made are based on unresearched and inaccurate facts and it's driving a wedge between the Fairbanks and Anchorage campuses. He stated, "That's why when our assembly put forward a resolution recently in support of this legislation, I encouraged them very strongly to reword it and to account for certain factors that I didn't feel were in the resolution. That was not done and I chose not to sign it because I didn't feel it was going to be a productive effort and I knew what kind of feedback we would be getting from the Fairbanks students which has happened." In conclusion, he respects this effort on the part of the legislature and believes the issue needs to be addressed, but the regents are undertaking the process. He urged the committee to hold off on this until the regents have had an opportunity to finish what they've started. CHAIRMAN BUNDE thanked Mr. Tritt for his comments. Number 1480 REPRESENTATIVE DYSON asked Mr. Tritt how much more time would be fair in his mind for the regents to go through the process. MR. TRITT responded the committee was appointed last fall and he believes the committee is expected to have its work completed on this issue by the end of the summer. He added that he's been advised there's a lot more detail that needs to be looked into because not everything meshes real well. CHAIRMAN BUNDE noted that not everyone shares the same level of confidence as Mr. Tritt. REPRESENTATIVE DYSON observed, "It seems to me what we're after is not fairness but rationality and statistics - students and the money doesn't necessarily indicate that it's fair or unfair, but what needs to be is a rational system which is what I think the bill sponsor is after." Number 1560 REPRESENTATIVE PORTER commented the perception of unfairness in the distribution of university funds between campuses was present in the 1960s when he attended UAA and he questioned why the university was just now putting a committee together to look at this issue. CHAIRMAN BUNDE said the ultimate goal, at least in his mind, is to have more money for the university, but if there isn't a rational perception of fairness where the largest group of voters reside, there won't be any additional money. CHAIRMAN BUNDE asked Andrew Hund to present his testimony at this time. Number 1600 ANDREW HUND testified via teleconference from Anchorage and expressed his gratitude to Chairman Bunde for sponsoring HB 302, an issue that should have been addressed many years ago. The Union Students, University of Alaska Anchorage, recently passed a resolution in support of HB 302 and believes the bill will accomplish two things. First, HB 302 brings to light the unfair distribution of funding between UAF and UAA campuses. The unequal distribution of funds has been the result of the Board of Regents lack of decisions and as a result the UAA campus has suffered. One way in which the difference in funding can be seen is the adjunct faculty rate between campuses. For example, UAA has an adjunct faculty rate of 65 percent, whereas UAF has an adjunct faculty rate of 35 percent. He stressed the union students are not advocating that UAF faculty rate be lessened, but rather advocating that UAA have the same rate as UAF. The second area is that HB 302 will indirectly address the excessive administration costs of the university system. Currently, the UAF administration is 250 percent more than comparable universities, even with a 28 percent cost of living increase added on. This is a major problem for getting any more funding because currently $49.8 million is spent in administration costs. He urged the committee to pass HB 302. CHAIRMAN BUNDE thanked Mr. Hund for his testimony and asked Judith Nelson to present her comments at this time. Number 1709 JUDITH NELSON, Executive Director, Bristol Bay Economic Development Corporation, testified via teleconference from Dillingham. She said the Bristol Bay Economic Development Corporation is the CDQ group for Bristol Bay and one of the focuses of their program is training in employment and education of residents of Bristol Bay to provide skills for gainful employment. They work closely with the Bristol Bay campus in this endeavor. She pointed out that much of the delivery of services is done via telephone which is a hard way to learn, but people are doing it successfully. She noted Bristol Bay has a very small campus, has always been very poorly funded and has continually fought for equity in funding. She said the current budget of $600,000 barely funds the necessities and the Bristol Bay campus also needs quality in education delivery, but the formula proposed in HB 302 will further harm the Bush campuses. CHAIRMAN BUNDE thanked Ms. Nelson for her testimony and asked Patrick Casey to come forward to present his comments. Number 1800 PATRICK CASEY, Student, University of Alaska Fairbanks, testified that as a former member of the military, he knows that micro managing doesn't work and in his opinion HB 302 is micro management. The mentality of "robbing Peter to pay Paul" doesn't help the university campuses, but rather hurts the entire university system. He suggested the level of funding should be increased to the high level instead of taking from one campus and giving to another. CHAIRMAN BUNDE thanked Mr. Casey for his comments and asked Terry Hoefferle to testify at this time. Number 1860 TERRY HOEFFERLE, Chief of Operations, Bristol Bay Native Association, testified via teleconference from Dillingham, expressing his outrage at HB 302. He said a funding formula that looks at degrees and the number of graduates that a university seems tied to, does not accurately reflect what postsecondary education is really all about in rural Alaska. He stated in rural Alaska, postsecondary education is more than a means of getting a degree, it's a means of getting a job and one of the ways rural areas work toward local hire and higher employment is by hiring people who may not have quite the necessary skills or education for a position, but to train that person while on the job. The Bristol Bay campus is a dynamic and invaluable part of the local economy. Currently, the Bristol Bay Native Association has got a number of partnerships going on with the Bristol Bay campus, providing a variety of training and education programs. He further discussed the Bristol Bay campus programs and achievements. He concluded this legislation would cripple the Bristol Bay campus and the local economy's ability to respond to living in the twentieth century. Number 2036 CHAIRMAN BUNDE recalled the Bristol Bay campus had a $600,000 budget and approximately 600 students which makes that campus one of the more economical campuses. He recollected the cost per student at UAA is approximately $15,000, $20,000 at UAF and $22,000-$23,000 at UAS. MR. HOEFFERLE pointed out the accomplishments at the Bristol Bay campus are done with considerable partnering throughout the community. The accomplishments he had spoken to were those which the Bristol Bay Native Association has with the Bristol Bay campus and there are similar partnerships with other agencies and institutions. CHAIRMAN BUNDE thanked Mr. Hoefferle and asked Jean Richardson to present her comments at this time. Number 2095 JEAN RICHARDSON, Student, University of Alaska Fairbanks, said parts of HB 302 would be great if the university budget actually increased with inflation. However, the reallocation between campuses would be terrible. She said the university budget is complex; there's research, community services, the community colleges and universities have been combined so some schools are commuter colleges, others are residential campuses and UAA is making a transition to a stronger on-campus life, all of which take different amounts of funding. It's a very complex system and the Board of Regents exist to balance those needs and in her opinion has done so fairly well. She said reallocating from rural campuses at this point where overhead is a big part of their budget would be extremely detrimental. Number 2163 CHAIRMAN BUNDE asked if there was additional public testimony. Hearing none, he announced HB 302 would be held in committee and heard at a later date.
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