04/23/1998 03:45 PM House HES

HB 302 - UNIVERSITY OF ALASKA OPERATING BUDGET                                 
                                                                               
Number 1219                                                                    
                                                                               
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 noted the committee had adopted committee                 
substitute 0-LS1285\F, Ford, 4/16/98, at a previous meeting.                   
                                                                               
CHAIRMAN BUNDE read the following intent language from the 1989                
legislature:                                                                   
     "It is the intent of the legislature that the University                  
     of Alaska administration review and compile information                   
     on student enrollment, credit hours and productivity at                   
     all university campuses.  It is the further intent of the                 
     legislature that this information be used to develop a                    
     formula approach as an alternative method of allocating                   
     and reallocating funding for these campuses, and that                     
     this formula approach alternative be presented with the                   
     university's FY 89 budget request."                                       
                                                                               
CHAIRMAN BUNDE asked why the university has not complied with the              
intent of the legislature some ten years ago.                                  
                                                                               
Number 1310                                                                    
                                                                               
WENDY REDMAN, Vice President, Statewide University of Alaska                   
System, said, "Actually, we did comply with the intent.  We had a              
model that we used -- as you may recall we -- since you were                   
elected in 1992, I believe -- I believe that was the last year we              
had an increase - the only increased funding we've received other              
than we had two years in the last six where we got some salary                 
money for the collective bargaining agreements - other than that               
the only new money we've received was money that you were helpful              
in getting $2 million for University of Alaska Anchorage (UAA) for             
instructional positions.  And that's really the last increment that            
we've had for any money.  So, we've been using the model that was              
developed - we have two models that were developed -- actually it's            
a series of models -- an instructional model, physical plant model,            
and a faculty salary allocation model that were developed in 1991.             
We worked on them through the course of that year and they've been             
used essentially to sort of help us figure out how to reduce the               
budget and models aren't as effective to reduce the budget as they             
are to increase the budget."                                                   
                                                                               
Number 1380                                                                    
                                                                               
REPRESENTATIVE BRICE asked Chairman Bunde how he arrived at the                
four different groups.                                                         
                                                                               
CHAIRMAN BUNDE responded it was based on his experience working at             
the university and modeled on other states.                                    
                                                                               
Number 1420                                                                    
                                                                               
REPRESENTATIVE BRICE said, "There are a couple of other statements             
I want to be very clear.  We'd made mention that this was a funding            
formula; it's not a funding formula, it's an allocation formula,               
first of all.  The next concern I have is what happens if the                  
university develops a program that isn't in one of these four                  
groups that are currently here?  I mean, we're making the                      
assumption that the university is a static institution; that these             
are the programs that will be provided forever and ever and that if            
any other new program is to ever be developed, they're going to                
have to come back to the legislature to be put into one of these               
four groups.  What was your thoughts on that?"                                 
                                                                               
CHAIRMAN BUNDE said certainly future programs would be placed in               
one of these categories based on the university's point of view.               
                                                                               
REPRESENTATIVE BRICE said that caused him concern - it will be                 
based on the university's point of view, as well as the political              
support the program might have.  He said discussions involving                 
allocation of a shrinking pie is never a fun issue, and he believes            
the discussion should focus on how to increase the pie.                        
                                                                               
CHAIRMAN BUNDE said he agreed; he thinks the allocation comes                  
before the pie increases, but he advocates for enlarging the pie.              
                                                                               
                                                                               
Number 1528                                                                    
                                                                               
MS. REDMAN expressed her appreciation to Chairman Bunde for the                
changes that were made to HB 302 and said it now comes very close              
to the formula currently being developed with Chancellor Gorsuch's             
committee; however, she still believes it should not be put in                 
statute.  She also appreciated that HB 302 provides for allocations            
of increased money.                                                            
                                                                               
CHAIRMAN BUNDE pointed out it also calls for a 2 percent                       
inflationary increase.                                                         
                                                                               
REPRESENTATIVE GREEN recalled the UAA campus has a significant                 
number of part time students and inquired how the head count on a              
part time student compares to a full time student under HB 302.                
                                                                               
MS. REDMAN said everything is converted to full time equivalent                
(FTE) so  it accommodates the part-time students the same, so                  
there's no advantage or disadvantage.  She further explained, "It's            
depending on the number of credits that are taken by students and              
then we divide the number of credits by 12 and that equals one                 
FTE."                                                                          
                                                                               
CHAIRMAN BUNDE asked Ms. Redman for the FTE of the various                     
campuses.                                                                      
                                                                               
MS. REDMAN said the Fairbanks campus is approximately 3,500; the               
Anchorage campus is at about 6,800; and the Juneau campus is                   
approximately 1,000.                                                           
                                                                               
Number 1634                                                                    
                                                                               
REPRESENTATIVE BRICE asked, "Relating to the inflation - now if                
you've got an inflation increase on an allocation formula for all              
campuses equal, how does that work if the funding level stays                  
stagnant?"                                                                     
                                                                               
Number 1650                                                                    
                                                                               
CHAIRMAN BUNDE said the inflation factor is for the total budget               
and then it's factored out through the formula.                                
                                                                               
Number 1660                                                                    
                                                                               
REPRESENTATIVE PORTER said it would be a formula program, much like            
the others, there would be a demand for increase, whether it's by              
student or by consumer price index (CPI).                                      
                                                                               
CHAIRMAN BUNDE explained, "The Chair's vision of this is that we               
have "x" amount in the university this year, inflation factor would            
2 percent, so it would be "x" amount plus 2 percent and that money             
then would be disbursed through the formula."                                  
                                                                               
Number 1715                                                                    
                                                                               
REPRESENTATIVE PORTER made a motion to move from committee CSHB 302            
as amended with individual recommendations and attached fiscal                 
notes.                                                                         
                                                                               
REPRESENTATIVE BRICE objected.                                                 
                                                                               
CHAIRMAN BUNDE asked for a roll call vote.  Representatives Dyson,             
Green, Porter and Bunde voted in favor of the motion.                          
Representative Brice voted against it.  Therefore, CSHB 302(HES)               
moved from the House Health, Education and Social Services Standing            
Committee on a vote of 4-1.