Legislature(2009 - 2010)SENATE FINANCE 532

02/10/2010 09:00 AM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 253 APPROP: DEFERRED MAINTENANCE/REPLACEMENT TELECONFERENCED
Heard & Held
+= SB 254 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS TELECONFERENCED
Heard & Held
+= SB 229 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= SB 231 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 229                                                                                                           
                                                                                                                                
     "An Act making appropriations for the operating and                                                                        
     programs, and to capitalize funds; making supplemental                                                                     
     appropriations; making appropriations under art. IX,                                                                       
     sec. 17(c), Constitution of the State of Alaska; and                                                                       
     providing for an effective date."                                                                                          
                                                                                                                                
SENATE BILL NO. 231                                                                                                           
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
9:09:14 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman described  the agenda for the  day. He said                                                                    
that   the   operating   budget    would   be   going   into                                                                    
subcommittees.  He   listed  the   makeup  of   the  various                                                                    
subcommittees.                                                                                                                  
                                                                                                                                
9:13:27 AM                                                                                                                    
                                                                                                                                
KAREN REHFELD,  DIRECTOR, OFFICE  OF MANAGEMENT  AND BUDGET,                                                                    
OFFICE  OF THE  GOVERNOR,  related that  she had  previously                                                                    
provided  an overview  of the  governor's proposed  spending                                                                    
plan for FY 11, which  also included the capital budget. She                                                                    
explained that  the operating budget,  SB 229,  totals about                                                                    
$9.8  billion in  all funds.  The bill  has 34  sections and                                                                    
contains  several   key  elements:  operating   numbers  and                                                                    
language  sections,   fund  capitalizations,   debt  service                                                                    
costs,  special appropriations,  including revenue  sharing,                                                                    
savings,  and  all other  appropriations.  She  termed it  a                                                                    
significant bill.                                                                                                               
                                                                                                                                
Ms.  Rehfeld   highlighted  items   from  the   budget:  the                                                                    
statutory  formula  program,  education   -  a  $56  million                                                                    
increase  for  school  formula  funding,  and  increases  in                                                                    
Medicaid  by  about $36  million  more  than  in the  FY  10                                                                    
budget. She  noted that  supplemental requests  for Medicaid                                                                    
and  budget amendments  would be  forthcoming.  There is  an                                                                    
increase  in  the  enrollment,   utilization,  and  cost  of                                                                    
providing Medicaid  services. The unfunded liability  of the                                                                    
retirement system  shows about a $73  million increase. Debt                                                                    
service on an annual basis  totals about $276 million, which                                                                    
is about a $29 million increase in the FY 11 budget.                                                                            
                                                                                                                                
Ms. Rehfeld  reported that the  governor is  very interested                                                                    
in  holding the  line on  agency operating  growth. Agencies                                                                    
will  be  required to  absorb  increases  in their  budgets.                                                                    
There  are a  few areas  which will  receive an  increase in                                                                    
funding,  such  as  domestic violence  and  sexual  assault,                                                                    
which will receive about $7  million of new general fund for                                                                    
the Departments of  Law and Public Safety.  She stressed the                                                                    
importance of holding the line  on state agency growth while                                                                    
meeting the needs  of the formula programs  and the services                                                                    
that Alaskans expect from their government.                                                                                     
                                                                                                                                
9:17:30 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  commented about a statement  regarding the                                                                    
supplemental budget, which implied  that if the supplemental                                                                    
is  approved, where  there are  increments,  there would  be                                                                    
amendments forthcoming to address them  in the FY 11 budget.                                                                    
Ms.  Rehfeld said  that was  correct. In  some areas  of the                                                                    
supplemental,    the    administration   anticipated    that                                                                    
corrections would be needed and  they are in the December 14                                                                    
budget  which  is  before  the  committee.  She  noted  that                                                                    
amendments would be forthcoming.                                                                                                
                                                                                                                                
Co-Chair  Hoffman  asked  when   labor  contracts  would  be                                                                    
addressed. Ms.  Rehfeld did not  know when the  agreement on                                                                    
labor contracts  would happen. She  offered to  provide that                                                                    
information when it became available.                                                                                           
                                                                                                                                
Co-Chair Hoffman  thanked Ms. Rehfeld for  her presentation.                                                                    
He said that  the budget subcommittees were  in progress and                                                                    
the Senate  Finance Committee looks forward  to working with                                                                    
the administration on the budget process.                                                                                       
                                                                                                                                
Ms.  Rehfeld  pointed out  that  SB  231, the  comprehensive                                                                    
mental health budget, contains  operating and capital items.                                                                    
She noted  that the subcommittee process  would also address                                                                    
those items.                                                                                                                    
                                                                                                                                
9:19:43 AM                                                                                                                    
                                                                                                                                
JEFF JESSEE,  CHIEF EXECUTIVE OFFICER, ALASKA  MENTAL HEALTH                                                                    
TRUST  AUTHORITY, referred  to a  handout entitled,  "Senate                                                                    
Finance  Committee  FY  2011  Budget"  (copy  on  file).  He                                                                    
referred briefly to slide 2  - trust beneficiaries. He noted                                                                    
that  in  addition  to  the  list  shown,  there  were  also                                                                    
associated  beneficiaries,  such  as people  with  traumatic                                                                    
brain  injury. He  showed slide  3  - trust  advisors -  and                                                                    
commented  that the  Alaska  Mental  Health Trust  Authority                                                                    
(AMHTA) does not work in a vacuum.                                                                                              
                                                                                                                                
Mr. Jessee spoke of AMHTA funding  for FY 2011 - slide 4. He                                                                    
said  that the  amount  of $24,870,374  is basically  stable                                                                    
from  FY 10.  He  spoke of  a  loss of  $90  million in  the                                                                    
Permanent  Fund; however,  he termed  the Trust's  financial                                                                    
structure as  extremely robust. The  Trust Fund's  payout is                                                                    
4.25 percent and  there is an income reserve  account set at                                                                    
four  times  the   annual  payout.  Even  in   a  year  with                                                                    
significant  reductions  in assets,  the  Trust  is able  to                                                                    
continue  to make  the  payout. He  noted  when compared  to                                                                    
other foundations, AMHTA fares well.                                                                                            
                                                                                                                                
Mr.  Jessee  shared joint  FY  11  legislative priorities  -                                                                    
slide 5. The first priority  is to increase the adult dental                                                                    
Medicaid reimbursement  cap. It was originally  set based on                                                                    
the cost  of one  plate of dentures,  but since  then, costs                                                                    
have increased.  Another priority is to  establish a regular                                                                    
and  periodic   schedule  of  rate  reviews   for  home  and                                                                    
community-based services.  The vehicle  for this goal  is SB
32.  The  most  expensive  level of  care  is  hospital  and                                                                    
nursing  home services.  Home  and community-based  services                                                                    
save money,  but require  monitoring to do  so. He  spoke of                                                                    
the advantages of periodic reviews.                                                                                             
                                                                                                                                
Mr. Jessee  said a  third priority is  to support  a 10-year                                                                    
plan  to reduce  homelessness, which  is making  significant                                                                    
progress.  He  reminded  the committee  about  the  critical                                                                    
aspects  of special  needs housing  - to  combine the  three                                                                    
legs of the stool:  capital, operating, and support services                                                                    
funds. This  is now  possible due  to legislative  action to                                                                    
expand  AHFC's  authority  and  provide  funding.  The  last                                                                    
priority  is  to fund  community-coordinated  transportation                                                                    
systems. He  spoke of the need  to coordinate transportation                                                                    
systems in order to save money.                                                                                                 
                                                                                                                                
9:27:41 AM                                                                                                                    
                                                                                                                                
Mr. Jessee turned  to slide 6 - the formula  for success. It                                                                    
begins with  identifying a problem  or community  need. Next                                                                    
is  collaboration   with  governmental   agencies,  advisory                                                                    
groups,   non-profits,   service  providers,   philanthropic                                                                    
organization, and  the private  sector. Another  strategy is                                                                    
to   develop  strategic,   sharply  focused   solutions.  He                                                                    
emphasized  that   the  solution  has  to   be  data-driven.                                                                    
Finally,   it   is   important  to   make   lasting   system                                                                    
improvements for Trust beneficiaries.                                                                                           
                                                                                                                                
9:30:09 AM                                                                                                                    
                                                                                                                                
Mr. Jessee  listed the five  program focus areas -  slide 7.                                                                    
They are Bring the  Kids Home, Disability Justice, Workforce                                                                    
Development,    Affordable,    Appropriate   Housing,    and                                                                    
Beneficiary Projects Initiative.                                                                                                
                                                                                                                                
Mr. Jessee  highlighted the very  successful Bring  the Kids                                                                    
Home (BTKH) program  - slide 8. He detailed  how the program                                                                    
filled a  community need.  In FY 06  there were  743 Alaskan                                                                    
children who were served out  of state. Currently, less than                                                                    
110 children are referred to  out-of-state placements. In FY                                                                    
06  $40 million  was  spent on  out-of-state Medicaid  care;                                                                    
currently, that amount  has been cut in half.  He listed the                                                                    
partners AMHTA works with.                                                                                                      
                                                                                                                                
Mr.  Jessee   explained  the  projected   BTKH  reinvestment                                                                    
process -  slide 9. There was  no promise to save  the state                                                                    
money; the  intent was to  spend effectively  by reinvesting                                                                    
savings,  which has  been very  successful. The  chart shows                                                                    
overall costs  as stable and  down from  the peak in  FY 07.                                                                    
The governor's  budget has a  number of increments  that are                                                                    
related to these investments.                                                                                                   
                                                                                                                                
9:33:12 AM                                                                                                                    
                                                                                                                                
Mr. Jessee shared the results  for beneficiaries - slide 10.                                                                    
Out-of-state  admits  are  down  85.4  percent;  Residential                                                                    
Psychiatric Treatment Center (RPTC)  recidivism is down from                                                                    
20 percent to 3.4 percent. That  means when kids come out of                                                                    
residential  psychiatric   treatment,  they   are  receiving                                                                    
support in the community.                                                                                                       
                                                                                                                                
Mr. Jessee spoke  about one of the key components  of BTKH -                                                                    
individualized services.  He called it a  reinvention of the                                                                    
Alaska Youth Initiative.  There is a plan to  phase out BTKH                                                                    
by 2013,  but continue  to have  safeguards. He  related the                                                                    
results  of  returning  youth   home  and  ensuring  quality                                                                    
programs.  He emphasized  that individualized  services used                                                                    
to require Medicaid  eligibility. He gave an  example of the                                                                    
success  of individualized  services  without  the need  for                                                                    
Medicaid  involvement. He  reported that  of over  500 youth                                                                    
who  receive individualized  services, less  than 1  percent                                                                    
received RPTC care.                                                                                                             
                                                                                                                                
9:37:55 AM                                                                                                                    
                                                                                                                                
Mr. Jessee shared data on the  BTKH FY 11 budget - slide 11.                                                                    
It  depicts what  the Trust  recommended for  GF/MH and  the                                                                    
continued investment  of MHTAAR in the  project. The numbers                                                                    
in red  show where  there is a  difference between  what the                                                                    
Trust  recommended and  what the  governor  included in  his                                                                    
budget.  There   are  some  areas  that   continue  to  need                                                                    
attention.                                                                                                                      
                                                                                                                                
Mr.  Jessee  did   not  envision  the  focus   areas  to  be                                                                    
perpetual. When the  goals are achieved, the  Trust moves on                                                                    
to other  focus areas. He requested  the committee's support                                                                    
to bring BTKH to a conclusion.                                                                                                  
                                                                                                                                
Mr.  Jessee turned  to  the topic  of  disability justice  -                                                                    
slide  12. He  stated that  the Trust  has worked  very well                                                                    
with the Department of Corrections  (DOC). A study indicates                                                                    
that   42   percent   of  those   incarcerated   are   Trust                                                                    
beneficiaries.  They  serve  longer  sentences  for  similar                                                                    
crimes and  have a higher  degree for recidivism.  The Trust                                                                    
has invested significant resources  with its partners to try                                                                    
to turn  this problem  around. The Criminal  Justice Working                                                                    
Group is trying to address  the issue. He emphasized that in                                                                    
terms of impact on the  state budget, a cooperative approach                                                                    
to lessen recidivism  is critical. He expected  that the new                                                                    
prison  would be  full  within 12  to  18 months,  prisoners                                                                    
would have  to be  housed out-of-state  again, a  new prison                                                                    
would  have  to  be  built, and  costs  would  increase.  He                                                                    
concluded  that   other  states  have  been   successful  at                                                                    
lessening recidivism  and Alaska  could also with  the right                                                                    
investment.                                                                                                                     
                                                                                                                                
9:41:15 AM                                                                                                                    
                                                                                                                                
Mr. Jessee  shared information about outcome  driven results                                                                    
-  slide  13.  Therapeutic  Courts have  become  central  to                                                                    
diverting  beneficiaries from  corrections. The  basic model                                                                    
is  to engage  the participants  in treatment  and community                                                                    
service, and  provide housing and  jobs. He gave  an example                                                                    
of a success in the Anchorage Mental Health Court.                                                                              
                                                                                                                                
Mr.  Jessee   showed  what  the   Trust  is   continuing  to                                                                    
contribute to  MHTAAR and to  grants for  FY 11 -  slide 15.                                                                    
Slide 16 depicts General  Fund recommendations. The governor                                                                    
provided   significant  support   for   some   of  the   key                                                                    
components. He  drew attention to the  Bethel Project, which                                                                    
needs additional operating and capital funds.                                                                                   
                                                                                                                                
9:44:15 AM                                                                                                                    
                                                                                                                                
Mr.  Jessee  turned to  slide  17  - workforce  development,                                                                    
which  continues to  be a  major  problem. The  focus is  on                                                                    
recruitment  and retention,  wages and  benefits, which  are                                                                    
topics of SB 32, and  training and education. He shared that                                                                    
the Trust  has learned  that one of  the biggest  factors of                                                                    
job retention is having a good supervisor.                                                                                      
                                                                                                                                
Mr. Jessee  shared accomplishments of  workforce development                                                                    
-  slide  18.  He  spoke   of  looking  ahead  at  workforce                                                                    
development programs  - slide 19.  There is a plan  to start                                                                    
up a  psychiatric residency program in  Alaska. Another goal                                                                    
is to  expand the student  loan repayment program  and other                                                                    
incentives  for health  professionals. A  Ph.D. psychologist                                                                    
internship program  will be implemented, and  increments for                                                                    
University of Alaska health programs will be supported.                                                                         
                                                                                                                                
Mr.  Jessee  highlighted  the  Trust's  plan  for  financial                                                                    
support  for  workforce development  -  slide  20. Slide  21                                                                    
depicts  a  need  for   continued  discussion  and  dialogue                                                                    
regarding the governor's budget.                                                                                                
                                                                                                                                
9:48:02 AM                                                                                                                    
                                                                                                                                
Mr.  Jessee  reported  on  affordable,  appropriate  housing                                                                    
programs - slide  22. He pointed out that the  Trust has $10                                                                    
million  committed  to   affordable  housing.  He  expressed                                                                    
frustration  that   $300  million   has  been   allotted  to                                                                    
weatherization.  He preferred  to address  the needs  of the                                                                    
homeless.                                                                                                                       
                                                                                                                                
Mr.  Jessee  said that  slide  23  depicts the  Bridge  Home                                                                    
program   outcomes  when   there  are   adequate  resources.                                                                    
Supporting beneficiaries  after institutional care  leads to                                                                    
dramatic  decreases  in  admissions  to  Alaska  Psychiatric                                                                    
Institute (API) and to the  Department of Corrections (DOC).                                                                    
Each  decrease  is  an  economic  benefit.  With  additional                                                                    
resources,   the  ability   to  serve   these  beneficiaries                                                                    
improves, especially for those in corrections.                                                                                  
                                                                                                                                
Mr. Jessee  related fiscal goals  for FY  11 - slide  24. He                                                                    
voiced  appreciation for  the $10  million  included in  the                                                                    
governor's   budget  to   begin  implementing   the  10-year                                                                    
homeless plan.  He spoke highly of  AMHTA's partnership with                                                                    
AHFC  and  Housing First  projects.  He  shared examples  of                                                                    
project  needs   for  those  with  alcohol   addictions.  He                                                                    
maintained  that   the  solution  is  "housing   first".  He                                                                    
dispelled several  commonly held  myths about  homeless with                                                                    
alcohol addictions.  He shared  results and  cost reductions                                                                    
from a successful Seattle program.                                                                                              
                                                                                                                                
Mr. Jessee  shared information about a  project in Anchorage                                                                    
sponsored by the  Trust. He suggested that  members may want                                                                    
to view the Seattle program.                                                                                                    
                                                                                                                                
9:54:47 AM                                                                                                                    
                                                                                                                                
Mr. Jessee  shared budget  recommendations for  the homeless                                                                    
assistance  program in  FY 11  -  slide 25.  He praised  the                                                                    
governor's  support  for  the program.  He  highlighted  the                                                                    
Trust beneficiary projects initiative  - slide 26. The Trust                                                                    
will continue  to carry these  projects because  it believes                                                                    
that beneficiaries can do a lot to support each other.                                                                          
                                                                                                                                
Mr.   Jessee   referred   to  slide   28   -   results   for                                                                    
beneficiaries. He  commented on  slide 29 -  the beneficiary                                                                    
budget picture. The Trust is  carrying a large amount of the                                                                    
load - nearly $4 million.                                                                                                       
                                                                                                                                
Mr. Jessee  concluded by voicing support  for the governor's                                                                    
domestic  violence   and  substance  abuse   initiative.  He                                                                    
suggested other strategies for dealing  with the problems of                                                                    
domestic   violence  and   for   enhancing  the   governor's                                                                    
initiative. He  shared problems with the  current system. He                                                                    
suggested  integrating  behavioral   health  and  addressing                                                                    
children's   needs.   He   mentioned   that   Representative                                                                    
Fairclough was  forming a group  to look at ways  to enhance                                                                    
the governor's initiative.                                                                                                      
                                                                                                                                
Mr. Jessee  suggested using a strategic  approach similar to                                                                    
that of  the Trust's to  address domestic violence.  He also                                                                    
thought  that  a  work  group   should  be  formed.  He  was                                                                    
optimistic  about  "turning  the curve"  regarding  domestic                                                                    
violence. He listed obvious gaps  to addressing the problem,                                                                    
such as lack of substance abuse help for the victim.                                                                            
                                                                                                                                
9:59:35 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman spoke of a  concern about the high rates of                                                                    
suicide  in Alaska.  Mr. Jessee  agreed that  suicide was  a                                                                    
serious problem. He  listed ways the Trust  was working with                                                                    
partners on the  problem. He stated that the  Trust needs to                                                                    
have a focus in order to be effective in this area.                                                                             
                                                                                                                                
Co-Chair Hoffman  asked if there  was any movement  to solve                                                                    
the problem in the near  future. Mr. Jessee did see progress                                                                    
if  the  legislative  task  force   could  come  forth  with                                                                    
evidence-based  strategies that  are  data driven.  Co-Chair                                                                    
Hoffman  emphasized that  it is  an  area that  needs to  be                                                                    
addressed.                                                                                                                      
                                                                                                                                
10:02:18 AM                                                                                                                   
                                                                                                                                
Senator  Ellis  requested  information  on  traumatic  brain                                                                    
injuries and about  only half of the current  state taxes on                                                                    
alcoholic beverages going to  substance abuse prevention and                                                                    
treatment services.  He wondered how to  proceed to increase                                                                    
treatment services if that amount were to be increased.                                                                         
                                                                                                                                
Mr. Jessee  addressed the issue  of traumatic  brain injury.                                                                    
He commented  on new studies  about screening  for traumatic                                                                    
brain  injuries  and  the  high  number  of  prisoners  with                                                                    
traumatic  brain  injuries. He  opined  that  Alaska is  too                                                                    
small to have  three separate systems of  care for traumatic                                                                    
brain  injuries: the  state, the  tribal health  system, and                                                                    
the  Department  of  Defense and  Veterans'  Administration.                                                                    
There is  a need for  more collaboration. He noted  that the                                                                    
state  has not  integrated services  with the  tribal health                                                                    
care  system,  the VA,  or  the  Department of  Defense.  He                                                                    
suggested there should be one system of care.                                                                                   
                                                                                                                                
Mr. Jessee answered  the question about the  alcohol tax and                                                                    
needing more  services for alcohol treatment.  He thought it                                                                    
would  be  a  challenge  even  with  significant  additional                                                                    
dollars. He suggested continuing  to partner with the tribal                                                                    
health  system.  He  thought the  state  could  absorb  more                                                                    
resources  and  enhance  services over  time.  He  suggested                                                                    
being very  specific about expected outcomes.  He noted that                                                                    
the Trust  produced statistics about the  cost of alcoholism                                                                    
to  the  state  -  over  $5  million.  He  shared  a  recent                                                                    
frustration  with  the   association  between  drinking  and                                                                    
sports.                                                                                                                         
                                                                                                                                
10:09:24 AM                                                                                                                   
                                                                                                                                
Senator  Thomas  asked  about  the  number  of  out-of-state                                                                    
admissions in the BTKH program,  both in FY 04 and currently                                                                    
- slide  10. He also  wondered how  much of the  capacity is                                                                    
being used in Fairbanks. Mr.  Jessee replied that 740 is the                                                                    
number  of  kids served  at  some  time in  an  out-of-state                                                                    
facility during FY 04. The  high-water mark for out-of-state                                                                    
admissions  at a  point in  time  was about  435. Right  now                                                                    
there are around 117 kids served out of state.                                                                                  
                                                                                                                                
Mr.  Jessee  provided  some  history   of  the  program.  He                                                                    
discussed  the  need  for   early  community  support.  Most                                                                    
referrals do  not come  from the  families, so  an education                                                                    
subcommittee  was formed  to partner  with  schools to  help                                                                    
identify the  kids who need  residential services.  He spoke                                                                    
of a  need to focus on  family issues as a  prevention tool.                                                                    
He explained  that small facilities are  more successful and                                                                    
can be converted to family homes.                                                                                               
                                                                                                                                
Senator  Thomas asked  if the  in-state  capacity was  being                                                                    
fully  utilized.  He asked  if  the  state was  lacking  the                                                                    
capacity  to bring  the remaining  117 back  to Alaska.  Mr.                                                                    
Jessee replied that there are  vacant beds in the state, but                                                                    
they  are not  able to  provide the  level of  care that  is                                                                    
needed. The kids living outside  have the most severe needs.                                                                    
They should be brought back  to appropriate services, so the                                                                    
Trust  is  working with  in-state  programs  to build  their                                                                    
capacity.  The facility  in  Fairbanks is  not  yet able  to                                                                    
receive Level  5 kids. The  kids' needs and the  capacity of                                                                    
the programs need to be matched.                                                                                                
                                                                                                                                
10:16:50 AM                                                                                                                   
                                                                                                                                
Senator  Thomas referred  to slide  12 and  asked if  the 42                                                                    
percent of  those incarcerated included in-state  as well as                                                                    
out-of-state  prisoners.   Mr.  Jessee   said  it   was  all                                                                    
correctional inmates,  but he did  not know  the percentages                                                                    
of each.                                                                                                                        
                                                                                                                                
Ms. Rehfeld  spoke favorable of  working with Mr.  Jessee on                                                                    
common programs and achievements.                                                                                               
                                                                                                                                
SB  229  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SB  231  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
2010 Senate Finance Presentation 2_10_10.pdf SFIN 2/10/2010 9:00:00 AM
SB 231