Legislature(2019 - 2020)SENATE FINANCE 532
02/19/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB20 | |
| Departmental Review: Statewide | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 20 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SENATE BILL NO. 20
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; 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."
9:04:18 AM
Co-Chair Stedman clarified that Bree's Law funding was
reduced by $144,000 in the FY 20 Adjusted Base.
^DEPARTMENTAL REVIEW: STATEWIDE
9:06:28 AM
DONNA ARDUIN, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
(OMB) introduced herself.
MIKE BARNHILL, POLICY DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, introduced himself.
Mr. Barnhill looked at slide 3 of the presentation, "State
of Alaska; Office of Management and Budget; FY 2020
Governor's Amended Budget; Presentation to the Senate
Finance Committee; February 19, 2019; Director Donna
Arduin" (copy on file), ""FY2020 Budget: Legislative
Proposals":
Revenue
? Repeal Local Petroleum Property Tax (+$398 million)
? Repeal Sharing of Fisheries Business/Resource
Landing Taxes (+$28.4 million)
? 50% of Alcohol Tax as a Shared Tax (-$20 million)
Debt Reimbursement
? Repeal School Debt Reimbursement (-$100 million)
? Repeal Project Debt Reimbursement (-$4.5 million)
O&G Tax Credit Paydown
? Replace UGF with surplus AIDEA funds
? FY19 $84 million (Align w/Statutory Calculation)
? FY20 $170 million (Statutory Calculation)
9:10:56 AM
Mr. Barnhill shared that during the development of the
bill, there were different interpretations of the statutory
formula. He stated that one interpretation was that the
percentage was applied to the gross amount of levied
production tax. He stated that another interpretation was
that the percentage was applied to the net amount, which
produced a much smaller number. He remarked that the
appropriations in the Revenue Sources Book both relied on
the gross value interpretation. He stated that the source
of the fund was not available general funds to make the
appropriation. He stated that the appropriation, subject to
legislative appropriation was to use surplus funds within
Alaska Industrial Development and Export Authority (AIDEA).
He shared that the Department of Revenue (DOR) did a
liquidity analysis of AIDEA funds, and determined that
there was sufficient excess funds that were not presently
designated for any particular purpose. He stressed that
those funds could be taken, and appropriate for the
specified purpose. The state obligation would continue to
be paid down. He remarked that, if the funds were
appropriated by the legislature, it would leave a balance
of approximately $500 million. He remarked that, in the
event that the Supreme Court ruled in the state's favor,
there would be a smaller balance to which issue debt and a
smaller amount of future debt service.
Senator Wielechowski did not understand why the there was
not an inclusion of the $84 million from FY 19 in the
supplemental budget. He remarked that the interpretation
regarding the calculation of the tax was an interpretation
that included over $1 billion in deductible tax credits. He
stressed that the state was being placed in a position
where they could be paying out more in tax credits than
were received in production taxes. He felt that it was a
bizarre interpretation of the statute. He did not feel that
it was ever the intent of the legislature. He remarked that
the oil and gas tax credits were subject to appropriation.
The provision was subject to appropriation by the
legislature and the tax director may issue certificates. He
stressed that they were discretionary tax credits. He noted
that there was now an increase from Governor Walker's
budget, from $27 million to $254 million in oil and gas tax
credits.
9:14:59 AM
Co-Chair Stedman remarked that there would be a future
hearing about AIDEA, and its policy and discussions about
whether that money would be used for tax credits. He felt
that Senator Wielechowski's concerns would be better
applicable in the tax credit structure discussed as the
sole item. He understood that there was an interplay in all
the expenditures.
Ms. Arduin stressed that requesting what to say to Senator
Wielechowski's constituents was not a budget question.
Co-Chair Stedman understood that, but he wondered whether
there was any comment that may address Senator
Wielechowski's question.
Mr. Barnhill replied that all of the matters were subject
to legislative appropriation, and his department carried
the burden of proof. He addressed the interplay, and felt
that an argument could be made that oil and gas cashflow
tax credits were the sole obligation of the state of
Alaska, so they were not identical to general obligation
bond debt.
Co-Chair von Imhof looked at the source of funds. She noted
that AIDEA paid a dividend to the state, and it was
sometimes difficult to pay that dividend. She felt that it
was interesting to assume that there were surplus funds in
AIDEA to pay the $225 million, and queried the reason for
the surplus funds in AIDEA. She queried the purpose of
AIDEA, especially whether the PCE funds were proposed to
move into the general fund.
Co-Chair Stedman felt that there was a deviation from the
budget, but rather a policy discussion.
Mr. Barnhill replied that he did not know why AIDEA had
surplus funds. He stressed that there were obligations on
the balance sheet that should be cleared in an appropriate
manner.
Senator Olson felt that he question was already answered.
Senator Hoffman agreed that the state must "balance its
checkbook and live within its means." He wondered how the
administration justified spending $225 million in
additional revenue and not spending it on education.
9:21:21 AM
Mr. Barnhill replied that there were difficult decisions.
He regarded the issue in the category of state debt. He
remarked that there was a discussion about the debt
reimbursement section of the budget, which was
approximately $215 million. That debt would by reduced by
$100 million for school debt reimbursement. He stated that
the remaining $100 million was in general obligation bond
debt, and there was not a proposal to reduce that debt,
because of the impact to state's reputation and credit
rating. He stressed that it was important for the state's
credit story and reputation that the debts were managed
appropriately.
Senator Hoffman wanted to point out that there are
different approaches between the administration and
legislature.
Co-Chair Stedman stressed that the issue would be taken up
in more detail at a later date.
Senator Micciche encouraged Alaskans to read the Revenue
Source Book, chapter 8, which addressed the difference
between deductions and credits.
9:24:25 AM
Mr. Barnhill highlighted slide 4, "FY2020 Budget:
Legislative Proposals":
Program Reform
? Exempt position reform
? Pay increment reform
? Bi-weekly payroll
? Begin to eliminate quasi-dedicated funds
? Power Cost Equalization Endowment Fund ($1.1
billion)
? Community Assistance Fund ($60 million)
? Higher Education Investment Fund ($344 million)
Mr. Barnhill continued with slide 4:
Unleashing Entrepreneurialism
? Eliminate most revolving loan funds
Examples:
? Agriculture Revolving Loan Fund ($5 million)
? Mariculture Revolving Loan Fund ($4 million)
? Alaska Microloan Revolving Loan Fund ($2.4
million)
? Development Initiative Revolving Loan Fund
($3.5 million)
Co-Chair von Imhof looked at the $1.1 billion in the PCE
endowment, and wondered where that money go.
Mr. Barnhill replied that, in each case, the funds would
lapse to the general fund. He remarked that, in connection
with each of there, there was no suggestion to change the
funding for the program. He stressed that it was consistent
with the original constitutional intent.
Co-Chair von Imhof felt that it had taken years to save
$1.1 billion. She wondered whether it was proposed that the
money be put in the general fund to be spent until its
gone.
Mr. Barnhill replied that he was not suggesting that the
money be fretted away. He stressed that the governor was
calling on the legislature to be frugal and be a very
strict steward of its funds.
9:30:58 AM
Co-Chair Stedman surmised that that the funds would not be
swept into the CBR.
Mr. Barnhill agreed.
Co-Chair Stedman asked whether it would be counted as
potential payback owed to the CBR.
Mr. Barnhill replied that it would count.
Senator Hoffman remarked that the PCE program had been in
existence for over thirty years. He felt that the people of
the state would rather see it voted on by the legislature,
and remain in the fund. He remarked that there were
villages that paid close to seven dollars for diesel to
generate electricity. He stressed that there was a twenty
times higher cost to generate electricity to a community
that probably had the lowest income in the state. He
understood that the administration would prioritize that
issue. He stressed that PCE was set up as a quasi-dedicated
fund. He looked forward to continued conversation on the
program. He helped build the funds over the years, and the
program was well on its way before he was in the
legislature.
Co-Chair Stedman remarked that there was a question about
the speed at which the money had been put in the account in
the years of surplus.
9:34:38 AM
Senator Olson remarked that he had seen Mr. Barnhill in the
community. He felt that PCE was a successful program, and
wondered why the money would be spent for other things than
it was originally intended.
Mr. Barnhill replied that he appreciated the kindness that
Senator Olson had shown him over the years. He stated that
the proposal was not intended to be punitive, and was not
an attack on the program. The funding for the program
remained in place. He stressed that the characteristics of
the PCE program that were identified by Senator Hoffman
were good characteristics, and were meritorious. He
stressed that there was an attempt to increase the
legislature's flexibility to deal with all the
stakeholders. He recalled that the minutes of the
constitutional convention showed a discussion about having
a level playing field. He stated that the wisdom was that,
in the current times when there was not enough money to
meet the needs, there must be an examination of the merits
and the needs of the state.
Senator Micciche felt that the discussion was important,
because of the state's financial lurch. He remarked that
the PCE Rural Electric Capitalization fund (RuralCAP) would
go on in its current state. He queried the source of the 5
percent POMV if the fund did not exist.
Mr. Barnhill replied that there were some mechanical
changes in the statute in order to keep the formula. He
stated that the appropriation would not come a fund
pursuant to the formula, rather the appropriation would
come from the general fund pursuant to a formula subject to
appropriation.
Senator Bishop looked forward to further discussions,
because he did not want future lawmakers to forget the
history and foundation of the program.
Senator Shower wondered whether the administration felt
that it was not constitutional to set aside funding for
special classes of people.
Mr. Barnhill replied he would defer to the Department of
Law. He furthered that the state had historically
established funds, and nothing in the statute created a
dedicated fund.
Senator Shower queried the view on how it was beneficial to
consolidate the funds, rather than keep them in separate
funds.
9:40:00 AM
Co-Chair Stedman requested a brief synopsis of the state's
savings position. He queried the balance of the CBR.
Mr. Barnhill replied that the starting balance of the CBR
was $2.4 billion. The balance in the Permanent Fund
Earning's Reserve was between $14 billion and $16 billion.
The total balance of the Permanent Fund was approximately
$60 billion.
Co-Chair Stedman stated that there was roughly $2 billion
the CBR and it required a three-quarter vote from the
entire legislature to access. He Stated that there was
approximately $200 million in the Statutory Budget Reserve
(SBR), and required a simple majority of the legislature to
access. The PCE had about $1.1 billion. There was the
ability to access the Permanent Fund, and it would be
accessed by about 5.1 percent. He felt that the legislature
was being "cornered" to make its payroll. He remarked that
the Permanent Fund would not be liquidated. He felt that
the $1.1 billion in PCE was a significant portion of the
available liquidity, after $14 million in savings
reductions.
Mr. Barnhill stressed that it was only liquid when it's
used as general fund. The budget and flexibility was
created with the smaller general funds.
Co-Chair Stedman remarked that the committee will decide on
its recommendation on any potential restructuring.
Senator Bishop commented that he appreciated the
administration's diligence in recognizing the hardships in
receiving funding for commercial fishing. He appreciated
that those grants did not have proposed reductions.
9:43:33 AM
AMANDA HOLLAND, MANAGEMENT DIRECTOR, OFFICE OF MANGEMENT
AND BUDGET, looked at slide 5, "FY 2020 Budget:
Administrative Orders":
Business process realignment
? Alaska Oil and Gas Conservation Commission to
Department of Commerce, Community and Economic
Development
Program reform
? Procurement Consolidation
? HR Consolidation Eliminate duplication
? Statewide Investigator Unit
9:45:59 AM
Senator Bishop requested assurance that it would not take
six months for a department commissioner to make a hire.
Ms. Holland replied that the Human Resource centralization
and decentralization had occurred several times over the
decades. The intent of the administrative order was to
create a task force that would include human resource
experts in the agencies to ensure that the implementation
of the consolidation would result in realizing the
efficiencies. She furthered that metrics would be in place
for agencies could ensure the appropriate level of service
to be efficient.
Senator Bishop wanted to ensure that nothing would
jeopardize its primacy.
Senator Hoffman wondered whether the administration had
examined consolidation of the purchasing of health care. He
remarked that the area had great potential for savings.
Ms. Arduin replied in the affirmative, but hoped to discuss
the issue further.
Senator Micciche looked at the Alaska Oil and Gas
Conservation Commission (AOGCC) realignment order. He
wondered whether it was related to function or mission, and
asked for a definition of "administrative purposes only."
Ms. Holland replied that the AOGCC would be moved to be in
more in line with the Department of Commerce, Community and
Economic Development (DCCED), as opposed to the Department
of Administration (DOA).
Senator Micciche wondered how it saved money for the state.
Ms. Holland replied that the focus was to make DOA a more
efficient agency by pulling misaligned outside of the
department so it could focus its resources on its core
mission.
Senator Wielechowski stated that the mission of AOGCC was
to essentially protect against waste from its natural
resources. He felt that there would be a better alignment
with the Department of Natural Resources (DNR). He wondered
why it was not moved into DNR.
Ms. Holland agreed to provide that information.
9:50:23 AM
Ms. Holland addressed slide 6, "FY 2020: Governor's
Directives":
Unleashing Entrepreneurialism
? Alaska Marine Highway System
Maximizing Return on Assets
? Property Disposal
? Rural Airport System
Program reform
? Laboratory Consolidation
? Travel Hire Policy
Co-Chair Stedman felt that the return on assets would fall
to the Department of Transportation and Public Facilities
(DOT/PF). He stated that he wanted the committee to hold
their questions on those issues to DOT/PF.
Senator Olson felt that DOT/PF addressing budget questions
was shortsighted, because the points could be addressed
with OMB.
Co-Chair Stedman stated that DOT/PF would be presenting at
a later date along side OMB.
Co-Chair von Imhof "chuckled" at the header of "Unleashing
Entrepreneurialism" with shutting down state funding on so
many areas and hoping that the private sector would pick up
the slack. She stressed that the reason the state played in
the transportation space, because it was not altogether
profitable. She stressed that the state was doing a service
to the community. She stated that perhaps that header was
more related to decreasing regulations and streamlining
permits. She wondered whether the state was looking at
truly unleashing entrepreneurialism by providing AIDEA
funds, or public/private partnerships using some of the
state's PCE to attract outside investment to help with
projects.
9:55:35 AM
Ms. Arduin replied that attracting outside capital was one
of the administration's goals. She felt that, for too long,
there was a reliance on state capital for state investment.
Co-Chair Stedman stressed that DOT/PF would address the
issues further. He wanted to get to the University
presentation.
Mr. Barnhill discussed slide 17, "FY 2020 Budget:
University of Alaska." The slide showed a comparison
between FY 19 Management Plan and the current governor's
proposal. He stated that the columns were equal, but there
was a reason behind that. He pointed to the dark blue
section of the two bars at the bar, which was the
unrestricted general fund section of the columns. It showed
that in FY 19 there was an appropriation of $327 million.
He stated that, in the governor's budget, it was a proposal
for an unrestricted general fund appropriation of $193
million, or a $134 million reduction in the budget. He
stated that the shaded sections above the dark blue were
designated general fund, other, and federal funds. It
showed a corresponding increase in designated general funds
from FY 19 to FY 20, but there was hollow authority.
Co-Chair Stedman queried the definition of "hollow
authority."
Mr. Barnhill replied that hollow authority was authority
that was given by the budget to collect and expend funds
from other sources. In the University's case that would be
tuition, donations, and other fund sources they have the
authority to collect and expend.
10:01:40 AM
Mr. Barnhill continued that the green shaded section of
"other" remained the same. He wanted to focus the
discussion on the reduction of $134 million in UGF. He
wanted to take the committee through the process to arrive
at the number. He stated that it was largely a comparative
process. They compared the University of Alaska to
institutions of higher education across the country. They
relied on two sources of data, with hundreds of data
points. He remarked that it was available online. He stated
that the two data sources were the State Higher Education
Executive Officers Association, which compared state
funding across all the states. The second data source was
the National Center of Education Statistics, which had a
database called "The IPEDS Database." He explained that
they learned that that the state of Alaska contributed a
substantially higher percentage of funds to the University
of Alaska than most states. The average contribution of
state funding to state-funded universities was just over
$7000 per student. The state of Alaska contributed more
than double that, between $16,000 and $17,000 per student.
There was also a comparison of percentage of state support
across land grant universities.
10:07:38 AM
Ms. Arduin furthered that the size of the reduction
proposed by the governor had been mischaracterized as "over
40 percent", when it was really about 17 percent of
university funding.
Senator Hoffman recalled mentioning the DGF amount, and
queried the guidelines. He wondered whether there was an
examination of the tuition for the University of Alaska
system. He asked for further explanation. He felt that the
proposal would be balanced on the backs of the university
students.
Mr. Barnhill shared that the average tuition at state-
funded universities was $6000 in 2010; $7000 in 2016; and
$7300 in 2019. The University of Alaska's average was $5100
in 2010; $6000 in 2013; and $6500 in 2017. The University
of Alaska had a number of recent tuition increases, at
about 5 percent each time. He did not believe that they
could increase much more than 5 percent. He did not suggest
that the budget should not be balanced on the backs of the
students. He remarked that tuition increase was not part of
the proposal.
10:10:32 AM
Senator Hoffman believed that the DGF increase was
primarily dependent on tuition and fees. He wondered why
tuition and fees would increase over 50 percent.
Co-Chair Stedman stressed that there would be more detail
in the budget subcommittee process.
Senator Micciche wondered whether the administration was
planning to engage in resources to determine why the state
was exorbitantly higher, and whether there could be a
managed glidepath to lower spending.
Ms. Arduin did not understand the question.
Co-Chair Stedman asked for a question restatement.
Senator Micciche restated his question.
Ms. Arduin replied that there would be engagement with
experts in the field, and noted that that occurred already.
Senator Micciche wondered whether the processes were taking
place in the large areas of spending
Ms. Arduin replied that there was a proposed premium to
other states, but believed that the university could
deliver a cost effective higher education.
10:15:07 AM
Senator Wilson wondered whether the administration had
asked the university to prioritize their programs and
services.
Mr. Barnhill replied that the administration did not ask
the university to provide a prioritization.
Senator Wilson felt that the exercise should be asked of
the university.
Senator Wielechowski felt that it was not fair to compare
UA to the other states. He requested information on how
much higher the operating costs Alaska had compared to
other states. He surmised that it was probably 30 percent.
He also requested the amount of local contributions
provided in those other states versus Alaska. He understood
that the average for other states was approximately 19
percent of the state appropriation. He remarked that Alaska
received virtually no local support. He also requested the
number of campuses per square mile. He remarked that UA
operated 20 times fewer university and square mile than
other states.
Senator Shower wondered whether there was an examination of
what would occur if some of the expensive satellite
campuses were either closed or consolidated.
Mr. Barnhill replied that he was not making the suggestion
to close or consolidate satellite campuses. He explained
that the data showed that the community campuses were quite
cost effective, and were not the cost driver. He stated
that UAF was the largest cost driver. He remarked that the
UAF community was the lowest cost structure. He accepted
that there was a 30 percent cost premium, and it was built
into the proposal at a 40 percent premium over the national
average.
Senator Shower was only asking what would happen if the
smaller campuses were closed.
10:22:05 AM
AT EASE
10:23:33 AM
RECONVENED
10:24:49 AM
RECESSED
1:01:54 PM
RECONVENED
1:03:22 PM
JIM JOHNSON, PRESIDENT, UNIVERSITY OF ALASKA, discussed the
presentation, "University of Alaska FY 20 Budget Impacts."
He quoted a French Army marshal in 1914, "My center is
giving way. My right is retreating. Situation excellent. I
am attacking."
Mr. Johnson looked at slide 2, "University UGF Funding
History." The history went back to 1915, when the US
Congress created the Alaska Agricultural College and School
of Mines. He noted 1935 when the Territorial Legislature
said there shall be a University of Alaska. He noted the
Constitutional Convention in the mid-1950s when the
University of Alaska was included in the Constitution. He
suggested that there be a core purpose and a core mission
for Alaska. He stated that that mission was in place for
over 100 years. He remarked that the cumulative impact
number the year prior equaled $195 million, which was what
would have been received from the state in UGF. He
explained that, with the governor's proposed budget
reducing the UGF to $193 million. He noted that the
cumulative impact on UA would be $380 million.
1:05:37 PM
Mr. Johnson highlighted slide 3, "University of Alaska
Budget." He stated that the governor's proposal was for a
41 percent cut of the UGF. He stated that the other
portions of funds were not state dollars.
Senator Wilson queried the percentage that would be gained
in DGF.
Mr. Johnson replied that he believed it was a negative
number. He stated that the ability to offer classes would
drive enrollment and tuition revenue. The ability to hire
research faculty would drive the ability to receive the
research grants and contracts.
Senator Wilson surmised that Mr. Johnson had zero
confidence in the University's ability to increase its DGF
funds.
Mr. Johnson replied in the negative. He believed that
history will show that when budgets were cut, enrollment
follows because of fewer faculty, fewer courses, and fewer
programs.
Co-Chair von Imhof wondered whether the highest funding
point in history the best reference to continue to
maintain. She wondered whether the university should be at
the 2014 funding levels. She wondered whether the
university should accommodate funding levels over the
course of several decades, which normalized over time.
Mr. Johnson stated that the regents' budget request, which
had been subsumed by the governor's budget, was a modest
increase of up to $351 million, which did not return to
$378 million.
1:10:07 PM
Senator Wielechowski recalled that the legislature shall by
general law establish a system of public schools. He
furthered that the courts had consistently interpreted that
to mean adequate funding and oversight. He noted the
similar language with the state university. He wondered
whether there could be constitutional violations because of
lack of funding.
Mr. Johnson replied that he had not yet considered that
issue.
Senator Bishop wondered what the proposal would say to
potential grantees.
Mr. Johnson felt that it did not provide a vote of
confidence.
Senator Wielechowski noted an argument about the higher
spending argument than other states. He wondered whether
that was a good argument.
Mr. Johnson felt that it was more of a "pears to apples"
comparison.
Senator Bishop noted that there were not extremely rich
people on the university's alumni association.
Senator Hoffman remarked that for every dollar spent on
research gets six dollars in return. He wondered whether a
reduction of a dollar could anticipate a reduction of six
dollars in DGF.
Mr. Johnson could not predict that outcome, but felt that a
reduction in research funding would result in a reduction
in research revenue.
1:15:47 PM
Mr. Johnson displayed slide 4, "University of Budget":
? UGF $134 million cut is real
? DGF $154 million increase is not
? In the face of declining enrollments, and
year-over-year increases to tuition?.
? Our ability to capture $154 million in new tuition
and fees is not realistic
Senator Shower wondered whether there was a level at a
compromise.
Mr. Johnson replied that he was not here to negotiate,
rather he was here to advocate the Regents' budget.
Senator Olson wanted to know why there was not willingness
to negotiate.
Mr. Johnson remarked that there could be a discussion of
the details in the budget, and remarked that the university
had survived through budget cuts. He stressed that critical
mass was important for quality.
1:21:40 PM
Mr. Johnson addressed slide 5, "FY20 Governor Dunleavy's
Budget":
? $134 mill UGF Reduction - 41% (FY19 $327 to FY20
$193.0)
? Structure: Single appropriation to two
appropriations
o UA System wide reduced $154.3 million (-54%)
o UA Community Campuses increased $20.4 million
(+49%)
? Additional $154.3 million university receipt
authority without an identified revenue source
o BOR reduced three sources of "hollow" budget
authority in their FY20 budget
? Community Campus UGF appropriation $61.7 million
o $11,000 times 5,611 student full-time equivalent
(FY18)
? Legislation proposed (SB59) to repeal debt service
reimbursement. Equals loss of $1.2 million annually
for (principle balance of $9.3 million):
o University Center in Anchorage ($877.4k
annually)
o Joint Use Readiness Center in Juneau ($338.2k
annually)
? WWAMI program support eliminated from DEED budget.
o WWAMI program is offered at UAA in partnership
with Univ of Washington School of Medicine
Co-Chair Stedman asked for more information about
Washington, Wyoming, Alaska, Montana, and Idaho (WWAMI).
Mr. Johnson replied that the WWAMI program was critically
important, and the funds were funneled through the
Department of Education and Early Development (DEED), and
were eventually funneled through tuition.
1:24:12 PM
Co-Chair von Imhof agreed that WWAMI was a significant
benefit to Alaska. She hoped that she would hear through
the subcommittee process how many students were applying,
returning to Alaska, and potential to meet halfway to
perhaps require WWAMI participants to serve in a smaller
community. She commended the University with its strategic
initiative recently. She noted that sometimes the credits
could not move between UA, UAF, and UAS. She felt that
there should be more collaboration and cooperation between
campuses, rather than silos.
Mr. Johnson replied that all credits transferred between
the universities. He stressed that they may not transfer
for a particular degree. He understood the issue with the
recent accreditation loss, but noted that all of those
students were provided the alternative without moving to
complete the graduation through UAF. He felt that it was an
example of campuses working together.
Co-Chair Stedman wondered why there should not be a single
appropriation.
Mr. Johnson replied it limited the Regents' ability to
manage the entire university system.
1:30:13 PM
Co-Chair Stedman wondered whether the comparisons should be
considered erroneous as related to the main cost drivers in
the university system.
Mr. Johnson stressed that there should be a real
differentiation between the rural community campuses and
the larger ones in the big city.
Senator Wielechowski felt that it was important to note
that the university had been cut $195 million five years.
He felt that there should be continued investment in the
university. He requested the economic and job impact of the
proposed cuts. He also asked about the impacts of the young
Alaskans staying in Alaska.
Mr. Johnson replied that 80 percent of the graduates stayed
in Alaska. He remarked that the largest challenge in Alaska
education was about the people who did not attend any post-
secondary education in Alaska.
1:34:06 PM
Senator Wilson recalled the number of programs, and
wondered whether the university had prioritized its
programs.
Mr. Johnson remarked that there were various factors, and
had recently reduced over 50 programs. He stressed that
there was currently contingency plans in place.
Mr. Johnson looked at slide 6, "Magnitude $134 Mill
Reduction." He remarked that there were many ideas that
related to closing campuses.
Mr. Johnson highlighted slide 7, "UA Tuition History." He
noted that the higher tuition increases in 2018 and 2019
for Prince William Sound College and Kodiak. He remarked
that those two community campuses were lower than all the
other community campuses, so the Board of Regents chose to
set them at the same rate. He noted that, starting in 2019,
there was a discount for tuition for high workforce demand
occupational endorsements such as welding, across the
system.
Co-Chair Stedman queried the tuition comparisons with
Idaho, Montana, and Oregon.
Mr. Johnson replied that the tuition was high compared to
those states.
Co-Chair Stedman wanted to have a further conversation in
the subcommittee.
Mr. Johnson replied that he looked forward to that
conversation.
1:40:32 PM
Mr. Johnson addressed slide 8, "Employee Headcount
Reductions." He stated that it was tied to the $195 million
cumulative reduction.
Mr. Johnson discussed slide 9, "State Divestment Compounds
Enrollment Challenges."
1:51:09 PM
Co-Chair Stedman discussed the following day's schedule.
SB 20 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| FY2020 Gov Amend Budget to SFC 2.19.19 Statewide JUD MVA DOR UA DOT.pdf |
SFIN 2/19/2019 9:00:00 AM |
SB 20 |
| 2019 02 19 UA Senate Finance FY20 Budget Final2.pdf |
SFIN 2/19/2019 9:00:00 AM |
SB 20 |