Legislature(2001 - 2002)
04/18/2002 01:35 PM Senate L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 252-EMPLOYMENT AND TRAINING PROGRAM/BOARD
CHAIRMAN STEVENS announced SB 252 to be up for consideration.
MS. PAT DAVIDSON, Legislative Auditor, said they had just
completed an audit on the State Training and Employment Program.
There were a number of purposes for the audit - to review the
administration of the STEP by the Alaska Human Resource
Investment Council (ERIC) to determine the compliance of the STEP
with state laws, to assess the impact of the STEP on the solvency
of the unemployment compensation fund and to calculate the
employer and the calculation of the employers' insurance tax
rates and to provide some detail expenditure information with
regard to the STEP. Their conclusions are that the STEP was
generally being administered in accordance with statutes with
five main exceptions.
The first one is that STEP served only a portion of
those that were eligible. We had found that there was
no systematic marketing of the STEP program to all
those that were eligible for the program. Secondly, we
found that federal and possibly state training funds
were being displaced by STEP. Basically, STEP was
created to assist clients that failed to meet the
federal or other programs and that it was intended to
be the employment training program of last resort. We
found that in the Municipality of Anchorage employment
coordinators used STEP funds when clients were
potentially eligible for the federal program, that STEP
grantees were not being required to ascertain if the
trainees were eligible for the federal programs when
recruiting, that STEP funds were used even when the
federal funding had not been exhausted - for example,
the Municipality of Anchorage carried forward over
$650,000 in federal adult and dislocated worker funding
and the balance of the state carried approximately $2
million of that same type of federal funds - and that
STEP funds may be displacing private funding through
union training programs. While employment coordinators
are pleased with the partnership between the unions and
the STEP funds, we question whether STEP funds are
being used to supplant private union training funds.
The third major exception was that there was a
requirement to reimburse the Department for such things
as tools, work-related clothing, safety gear or others
and this was not being actively enforced. We found that
the statutory program elements that define the STEP
program do not include a category called "employment
assistance." However, a lot of the funds were being
spent under that categorization. We found that
administrative costs exceeded the maximums defined in
statute.
In FY01, the Federal Employment Training Program was
substantially changed, the old one being JDPA, the Job
Training Partnership Act. The new federal program was a
Workforce Investment Act and referred to as WIA. The
new federal program is more inclusive and more people
are eligible for this program. Additionally, the new
federal program allows for funding of industry specific
training and, therefore, the purpose and need for STEP
needs to be reevaluated so again it's in the position
where it's the training funds of last resort - that you
maximize the use of those federal funds first. We found
that as a result of the funding mechanism for STEP and
the Alaska technical vocational education programs that
the financial benefits accruing back into the UI fund
do not exceed their cost. The difference is borne by
employers through increased UI taxes. It should be
pointed out that while all Alaskans are eligible for
the STEP program, not all employers will shoulder the
burden of the net costs of the STEP and the ATVE
programs.
We found that the STEP program does provide a direct,
though not precisely measurable, benefit to the UI fund
through either reduced UI benefit payments or larger
wage base. The ATVE program doesn't have that direct
measurable benefit.
In our opinion the STEP program should be reauthorized.
Our recommendation was for four years. The new Federal
Employment Training Program addresses many of the
reasons STEP was originally created and, therefore,
STEP needs to be realigned to fill the missing gaps. In
this report, we made seven recommendations to the
Department and they include:
-The need for additional outreach to those that are
actually eligible for the STEP program.
-To improve the monitoring of STEP grantees
-That legislation that directs the unexpended,
unobligated balance of the STEP funds to lapse into the
UI fund
-To actively monitor that admin costs to not exceed 15%
of total STEP expenditures
-That UI accounting costs that are charged to STEP and
ATVE are done in an equitable and supported manner
-That the programmatic data be collected and reported
in a manner that demonstrates legal compliance with the
statutes
-And that labor and staff work together to ensure that
STEP does not replace federal, private or other public
training funds.
MS. REBECCA GAMEZ, Deputy Commissioner, Department of Labor and
Workforce Development, said she wanted to comment after she had a
chance to read the amendments.
SENATOR LEMAN asked why they changed the name to ERIC.
MS. GAMEZ replied that under the Workforce Investment Act that
replaces the Job Training Partnership Act on the federal level
the name change - Alaska Workforce Board - falls in line with the
local workforce board name. "It's kind of a naming protocol, if
you will."
SENATOR TORGERSON stated that he wouldn't move amendment #1,
labeled GS2052\A.2, because the report said there was some
concern about money going to the union training programs. He
didn't have enough information to do a total ban on it. They are
asking for reports to come back to the legislature next year to
see if they have adjusted.
SENATOR TORGERSON offered amendment A.4:
22-GS2052\A.4
Craver
10/1/02
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR TORGERSON
TO: SB 252
Page 1, line 2, following "membership;":
Insert "providing that lapsing employment assistance and
training program account funds may be appropriated to the Alaska
technical and vocational education program;"
Page 15, following line 9:
Insert a new bill section to read:
"* Sec. 11. AS 23.15.625 is amended to read:
Sec. 23.15.625. Employment assistance and training
program account. The employment assistance and training
program account is established in the general fund. The
commissioner of administration shall separately account for
money collected under AS 23.15.630 that the department
deposits in the general fund. The annual estimated balance
in the account may be appropriated by the legislature to the
department to implement AS 23.15.620 - 23.15.660. The
[LEGISLATURE MAY APPROPRIATE THE] lapsing balance of the
employment assistance and training program account may be
appropriated to the Alaska technical and vocational
education program established in AS 23.15.820 - 23.15.850
[UNEMPLOYMENT COMPENSATION FUND ESTABLISHED IN
AS 23.20.130]."
Renumber the following bill sections accordingly.
Page 28, line 20:
Delete "sec. 52"
Insert "sec. 53"
SENATOR DAVIS objected for purposes of explanation.
SENATOR TORGERSON explained that the auditor suggested that there
are currently about $2 million left of unobligated funds in the
STEP and, "We created this program to train people, not to sit
around in the bank for these guys. I didn't want it to go back to
the UI trust because we're actually formally intercepting this
money, the one tenth of one percent, and putting it back in there
and taking it out again, so I would suggest this lapse into the
Alaska Training and Vocational Educational Program, which is
currently in a grant mode for one more year and then it will go
into a new vocational education program. He asked his staff, Ms.
Mary Jackson, to explain that.
MS. MARY JACKSON, Staff to Senator Torgerson, said he was correct
that this would lapse directly into the ATVE program. The
Department is currently promulgating regulations for the program
and it should be in place shortly.
CHAIRMAN STEVENS asked if there were any objections to amendment
#2. There were none and it was adopted.
SENATOR TORGERSON moved amendment #3, GS2052\A.4:
22-GS2052\A.4
Craver
10/1/02
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR TORGERSON
TO: SB 252
Page 1, line 2, following "membership;":
Insert "providing that lapsing employment assistance and
training program account funds may be appropriated to the Alaska
technical and vocational education program;"
Page 15, following line 9:
Insert a new bill section to read:
"* Sec. 11. AS 23.15.625 is amended to read:
Sec. 23.15.625. Employment assistance and training
program account. The employment assistance and training
program account is established in the general fund. The
commissioner of administration shall separately account for
money collected under AS 23.15.630 that the department
deposits in the general fund. The annual estimated balance
in the account may be appropriated by the legislature to the
department to implement AS 23.15.620 - 23.15.660. The
[LEGISLATURE MAY APPROPRIATE THE] lapsing balance of the
employment assistance and training program account may be
appropriated to the Alaska technical and vocational
education program established in AS 23.15.820 - 23.15.850
[UNEMPLOYMENT COMPENSATION FUND ESTABLISHED IN
AS 23.20.130]."
Renumber the following bill sections accordingly.
Page 28, line 20:
Delete "sec. 52"
Insert "sec. 53"
Page 28, line 22:
Delete "secs. 1 - 45"
Insert "secs. 1 - 46"
Page 29, line 13:
Delete "Section 49(a)"
Insert "Section 50(a)"
Page 29, line 14:
Delete "sec. 51"
Insert "sec. 52"
MS. JACKSON explained that the intent of this amendment is to
rectify the problem that was identified by the audit concerning
the 15% limitation on administrative expenses. There are two
conflicting statutes and this clarified the intent, which is that
it be 15% of program expenses.
CHAIRMAN STEVENS asked if there were any objections to amendment
#3. There were none and it was adopted.
SENATOR TORGERSON moved amendment #4, GS2052\A.3:
22-GS2052\A.3
Craver
10/1/02
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR TORGERSON
TO: SB 252
Page 1, line 2, following "membership;":
Insert "relating to repayment on promissory notes for work-
related items paid for by grant programs;"
Page 15, following line 9:
Insert a new bill section to read:
"* Sec. 11. AS 23.15.640(c) is amended to read:
(c) The department shall [, TO THE EXTENT ECONOMICALLY
FEASIBLE FOR THE INDIVIDUAL,] require an individual who
participated in a program that was funded at least in part
by a grant under AS 23.15.651 and that included as a program
element the provision of necessary tools, work-related
clothing, safety gear, or other necessities to obtain or
retain employment under (a)(6) of this section to reimburse
the department for the portion of the grant that was spent
on an element listed in (a)(6) of this section. Repayment
shall begin no later than six months after the individual
completes or leaves the state training and employment
program and may not be less than $25 each calendar month.
The department shall separately account for receipts under
this subsection. The annual estimated receipts may be used
by the legislature to make appropriations to the department
to the employment assistance and training program account
(AS 23.15.625) for grants under AS 23.15.651. The
department shall institute collection procedures on
outstanding promissory notes for amounts due under this
subsection. Collection procedures must include obtaining a
judgment for default on a promissory note. The department
shall seek satisfaction of the judgment from an individual's
permanent fund dividend to the extent possible under
AS 43.23.065 until the judgment has been satisfied. The
department shall implement this subsection by regulation."
Renumber the following bill sections accordingly.
Page 28, line 20:
Delete "sec. 52"
Insert "sec. 53"
Page 28, line 22:
Delete "secs. 1 - 45"
Insert "secs. 1 - 46"
Page 29, line 13:
Delete "Section 49(a)"
Insert "Section 50(a)"
Page 29, line 14:
Delete "sec. 51"
Insert "sec. 52"
MS. JACKSON explained that this was also identified as an issue
in the audit. The program provides for the STEP monies to be used
for individuals to purchase tools, for example. It has always
been if you purchase these tools and you get a job, you're
supposed to reimburse the program. The audit found there was no
mechanism in place to make that take effect. This amendment
specifies procedures for that reimbursement to be accommodated.
SENATOR AUSTERMAN asked how much that would offset the actual
money.
SENATOR TORGERSON said he understands that they hadn't collected
any yet. He said there could be a cost for collections; he was
sure it would take another employee.
CHAIRMAN STEVEN asked if anyone objected to amendment #4. There
were none and amendment #4 was adopted.
MS. EDEN LARSON said the issue that concerns the builders and
contractors is the funding of the union training programs to the
exclusion of open shop construction train programs.
SENATOR TORGERSON responded that he doesn't have enough
information to act on that and it's a concern of the auditors.
MS. LARSON said in the interim the language that's currently in
this bill prohibits people training in the construction trades
that are non-union from applying for grants under the STEP. For
another year they would be concerned about that.
CHAIRMAN STEVENS said the intent today was to adopt the
amendments and circulate the new CS and then bring it up again at
a later date.
MS. LARSON said she would save her comments until she could see
the CS.
SENATOR TORGERSON moved amendment #5, GS2052\A.6:
22-GS2052\A.6
Craver
10/1/02
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR TORGERSON
TO: SB 252
Page 1, line 2:
Delete "repealing"
Insert "extending"
Page 27, lines 24 and 25:
Delete all material and insert:
"* Sec. 46. The uncodified law of the State of Alaska enacted
in sec. 6, ch. 116, SLA 1996, as amended by sec. 9, ch. 85, SLA
1998, is amended to read:
Sec. 6. AS 23.16.620, 23.15.625, 23.15.630, 23.15.635,
23.15.640, 23.15.645, 23.15.651, and 23.15.660 are repealed
June 30, 2003 [2002]."
Page 29, following line 12:
Insert new bill sections to read:
"* Sec. 51. The uncodified law of the State of Alaska is
amended by adding a new section to read:
RETROACTIVITY OF SEC. 46. If sec. 46 of this Act takes
effect after June 29, 2002, sec. 46 of this Act is retroactive to
June 29, 2002.
* Sec. 52. Section 46 of this Act takes effect June 29,
2002."
Renumber the following bill sections accordingly.
Page 29, line 14:
Delete "sec. 51"
Insert "secs. 52 and 53"
He explained that this repeals the sunset clause and puts a one-
year extension in. He added that the next amendment is requesting
all the reports to come back, which is how they are trying to
handle the auditor's issue so it didn't have to drag on for
years.
CHAIRMAN STEVENS asked if there were any objections to adopting
amendment #5. There were no objections and it was adopted.
CHAIRMAN TORGERSON moved amendment #6, GS2052\A.7:
22-GS2052\A.7
Craver
10/1/02
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR TORGERSON
TO: SB 252
Page 27, following line 25:
Insert a new bill section to read:
"* Sec. 47. The uncodified law of the State of Alaska is
amended by adding a new section to read:
REPORT TO THE LEGISLATURE. The Department of Labor and
Workforce Development shall present a written report to the
legislature on the state training and resources program within 10
days of the beginning of the First Regular Session of the Twenty-
Third Alaska State Legislature. The report must include
(1) an outreach plan for the state training and
resources program;
(2) a certification verification plan;
(3) the department's recommendations on allowable
nonadministrative costs for program expenses;
(4) a data collection and reporting plan;
(5) the status of the governor's discretionary fund
for statewide activities established as part of the 1999 Alaska
Human Resource Investment Council action plan;
(6) facts supporting the need for the state training
and resources program;
(7) the department's recommendations on including
reimbursable employers in the state training and resources
program, and excluding current and former employees of
reimbursable employers from the program; and
(8) an analysis of the reasons for decreased public
training institution funding in relation to the increase in union
training program funding."
Renumber the following bill sections accordingly.
Page 28, line 20:
Delete "sec. 52"
Insert "sec. 53"
Page 29, line 13:
Delete "Section 49(a)"
Insert "Section 50(a)"
Page 29, line 14:
Delete "sec. 51"
Insert "sec. 52"
He explained that this is the laundry list of things that came
out of the audit report and says that we want to have a report 10
days after the beginning of the first session of the 23rd Alaska
Legislature and the report must include all of this. He didn't
have a report ready to address the union concern with the private
money and this is where he anticipated inserting that language.
MS. JACKSON pointed out a technical amendment on lines 16 and 18.
It should not say "training and resources", but "training and
employment".
SENATOR TORGERSON moved an amendment to the amendment to delete
"resources" on lines 16 and 18 and insert "employment". There
were no objections and it was adopted.
CHAIRMAN STEVENS asked if there were any objections to adopting
amendment #6 amended. There were no objections and it was so
ordered.
SENATOR TORGERSON moved amendment #7, GS2052\A.1:
22-GS2052\A.1
Craver
10/1/02
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR TORGERSON
TO: SB 252
Page 3, lines 30 - 31:
Delete "The commissioner of administration is a nonvoting
member of the board."
Page 4, lines 2 - 3:
Delete ", and the commissioner of administration under (b)
of this section"
Page 4, lines 9 - 10:
Delete "and the commissioner of administration under
AS 23.15.550(b)"
Page 5, line 4:
Delete " or (b),"
SENATOR TORGERSON said he has had many discussions with Mr.
Andrews about the size of this group. "It's a herd of turtles
that they're so damn big that they can't get anything done. I
don't want to add to that."
He didn't see any advantage to having the commissioner of
Administration as another part of this.
CHAIRMAN STEVENS asked if there were any commissioners on it now.
SENATOR TORGERSON replied that there are, the Commissioner of the
Department of Labor and Department of Community and Economic
Development.
CHAIRMAN STEVENS asked if there were any objections to amendment
#7. There were none and it was adopted.
SENATOR TORGERSON moved amendment #8, GS2052\A.8:
22-GS2052\A.8
Craver
10/1/02
A M E N D M E N T
OFFERED IN THE SENATE BY SENATOR TORGERSON
TO: SB 252
Page 5, lines 16 - 17:
Delete "[NOT MORE THAN THREE TIMES IN A CALENDAR YEAR]"
Insert "not more than three times in a calendar year"
He explained that the Governor's bill took out the requirement
that they couldn't meet more than three times a year and although
he wanted to limit it to two, he thought they could just leave
the language that's already in statute - three times per year.
CHAIRMAN STEVENS asked if there were any objections to amendment
#8. There were none and it was adopted. He asked Ms. Gamez if she
had enough time to read the amendments and she indicated she was
ready to testify now.
MS. GAMEZ said it was helpful to delay her testimony for the
amendments. She was surprised that a few of the amendments went
against the recommendations they both agreed on.
On amendment #2, recognizing that amendment #1 has some
work that Senator Torgerson would like to take care of,
both the legislative audit report and the Department
concurred that the lapsed money should go back into the
UI trust funds. I think that that is more appropriate
for the lapsing. There have been some problems with
expenditures of STEP monies. Part of it was an
appropriations problem and part of it was with one of
the local workforce boards in terms of expending funds.
So that has been a challenge.
On amendment #3, we, too, would like to clarify the
15%. I did have an opportunity to talk with Ms. Jackson
about this and if the language said Program Awards as
opposed to expenses, we would be in the position of
defining what is programmatic and what isn't
programmatic expenses. For example, on something that
the audit counted as an administrative cost it is
necessary for us to have a STEP program in this state
and I would argue that that would be programmatic cost.
Because without that function in the data collection
piece, we wouldn't be able to have a program. So I
would argue that that's not administrative, that that
would be a programmatic, but I think we could probably
work those differences out now that we're hammering out
the disagreement in those two statutes.
MS. GAMEZ said if there were a three-year funding period that
would be in line with the federal WIA funds, it would be easier
for them to agree with this.
Business statistics show that there are a certain
amount of administrative costs regardless of program
expenditures to a certain degree. Some of the sub-
grantee adjustments affect expenditures and those can
occur after the year-end. So, the accurate year-end
expenditures aren't always known until the process is
completed.
Moving to amendment #4 that was adopted on the
repayment of promissory notes, the point was brought up
by one of the committee members here that there may be
costs to the department to collect those funds. The
STEP program is not a loan program. We do, however,
have signed promissory notes for people who have
received monies for tools or boots or other items that
they may need. Collections will also represent an
increased cost to the department for record keeping,
tracking and accounting.
TAPE 02-23, SIDE B
MS. GAMEZ said that amendment #5 caused them concern because
it's very difficult to think ahead if you have such a short
period of time in which to make changes.
On amendment #6 she was glad that Ms. Jackson caught the typo,
because they would have to start calling it the STREP program and
it would truly be unpopular with certain folks at the table.
We are working on an outreach plan and I would like to
make the comment that we have a certification
verification plan for classroom training only and that
is a recommendation that we have. When I was reading
over Ms. Jackson's overview to Senator Torgerson, I
think there was a typo and I would like the opportunity
to talk with Ms. Jackson after the hearing because we
already insure that there's authorization of training
ACPE and the department will require certification of
all classroom training…
She said it would be helpful to see a comprehensive package with
the CS and hoped she would be invited to staff discussions
regarding the department's concerns before a CS is adopted.
SENATOR AUSTERMAN asked her if she had concerns about the
amendments, why didn't she speak up before they were adopted.
MS. GAMEZ said she didn't realize she was in a position to
disagree with the amendments until they were on the table.
SENATOR TORGERSON said he wouldn't deviate a whole lot from what
they have, but he wants to make it work. He wouldn't have gone
with the sunset if it weren't for the reporting requirements.
CHAIRMAN STEVENS said he had a concern on page 47, which is a
summary of the type of vendors or clients served, and asked her
for a short definition of the six categories.
MS. GAMEZ said she would like to invite Mike Shiffer who is more
technically versed in those things.
MR. MIKE SHIFFER, Program Coordinator, Workforce Investment
Office, responded that examples of a private training institution
would be a charter college; the unions would be like the
operating engineers who run a training program. Public training
institutions would be things like the Alaska Vocational Technical
School in Seward; Native organizations would be training programs
such as the one run out of the Bristol Bay Native Association. He
was drawing a blank on "other" kinds of training programs, but
client reimbursements would be expenses paid directly back to an
institute directly on behalf of a participant.
CHAIRMAN STEVENS said he was confused about the difference
between a private training institution and a public training
institution.
MR. SHIFFER explained that a public training institution would be
things that the legislature appropriates directly to the
University of Alaska and the Alaska Vocational Technical Center.
CHAIRMAN STEVENS asked what the process was for the distribution
of the money on an annual basis.
MR. SHIFFER replied that in general the funds are distributed in
two methods. The first is through direct client services - an
individual comes in and is identified for services and goes to
school - and the other option is through grant funds. Grants are
announced and let out and training providers compete for the
funds and provide training programs.
CHAIRMAN STEVENS said he was concerned with the number of clients
served and asked why the numbers have changed from public and
private losses to gains with the unions. He asked if the funding
mechanism inserting the money into the program has changed in
correspondence with the change to the number of people that are
receiving the benefit.
MR. SHIFFER replied no. They rely on information received from
research and analysis and there is a great deal of effort being
focused on the areas of construction, the trades and things like
that. They target the funds towards those areas where they see
the most opportunity for creating employment opportunities for
folks. Currently, those tend to rest with training programs that
happen to parallel with union type training programs.
SENATOR TORGERSON asked what the fund balance was right now of
the STEP program.
MR. SHIFFER replied that he didn't know that right now.
SENATOR TORGERSON asked if he told him it was over $2 million,
could he tell him why.
MR. SHIFFER replied that a number of things contribute to that.
First of all, when the appropriations were occurring,
Ms. Gamez referred to that at one point where we were
sort of chasing our tails. Each appropriation would
occur and the amount that was available from the fund
would exceed the appropriation and so we saw ourselves
chasing after money that was increasing faster than we
were using it.
Another issue is that there has been several changes in
terms of how services were delivered and that resulted
in one of the local areas not expending the funds as
greatly as they had done in the past. And other funds
came into the state that were unexpected and in the
form of an unusually large award for dislocated workers
and for funds that related to foreign worker
certification. Those large amount of funds that came
into the program have served people who potentially
could have been eligible for services here.
SENATOR TORGESON asked what they were going to do with that
money.
It upsets me that it's not out in the street and that
we're not training people. We went in there a couple of
years ago and took $4 million out of there. Now you've
got $2 million again. If you're not going to use the
damn money, let's do away with the program. Put it in
the ATV program. That's where I'm coming from on this…
MR. SHIFFER replied that they have an opportunity to utilize
those funds by looking at the way they're distributing the funds
by focusing on the opportunities for spending the STEP funds as a
last resort. "We'd be happy to work with you on clarifying how
that goes."
SENATOR TORGERSON replied, "Don't work with me. Work with the
University…or work with others out there who are wondering why
they can't get into this pot of money."
SENATOR AUSTERMAN said he wanted to see a good description of how
the grant program works - who sets it up, etc. - that might be
helpful in figuring out exactly why there are institutions that
want to train people, but can't get the funds.
MR. SHIFFER said he would be happy to provide that information.
MR. MIKE ANDREWS, Alaska Works Partnership, Inc., said they are a
statewide construction job training organization that's formed in
partnership with Alaska's construction trade unions and sponsors
a statewide apprenticeship program that is not a union program.
They have a lot of experience across the board with some of these
issues. He thanked Senator Torgerson for withdrawing the one
amendment until more information came forward in terms of why
there is a discrepancy between union and non union training
programs. He thought they could give them some reasoning behind
that.
MR. ANDREWS supported continuing the STEP program and said he
used to work as director of the Alaska Human Resource Investment
Council and worked very closely with the Senate Majority and
Senator Torgerson on a lot of these issues of how to make a very
hard-to-understand workforce development system in this state,
particularly that is mostly federally funded, work well for
Alaskans. "How do we align job training with the University of
Alaska, with AVTEC, with Alaska Technical Center and also with
private sector training that occurs in the state."
With this kind of background, Mr. Andrews said he thought he had
some things he could add and he would like to come back and add
them. One of the problems that needs to be looked at is that STEP
has been a pilot program for 10 years. It's reauthorized every
two years and in 1997, when they did the major reform, they
aligned STEP performance with the Job Training Partnership Act
and other performance measures that the majority wanted to see in
their performance based budgeting. Now there's quite an extensive
performance report on all these programs. They can look at the
performance of STEP, which is a high performing program, in terms
of short-term less-expensive training that put people to work and
keeps them employed.
One of the problems they have reached with reauthorization is
that STEP has always had a two-year timeline.
Federal programs allow two or more years for a rollover
for the ability to monitor and spend funds. STEP has
always fought this battle of getting reauthorized and
then trying to basically lurch out there again as a
pilot, be a low priority on someone's table, because
it's a pilot and try to function as well. We have
worked hard, the state, the legislature, and people
involved to cap administrative cost, to bring those
costs down from 20% to 15% and to really understand
what line items go into a program and what would go
into actual admin. I would say just in general that's a
good move to cap that, but that does also make it
harder for some of the public institutions that have
indirect cost fees that have administrative fees set
who can't reach that barrier. They cannot necessarily
apply for training because of that cap. I'm not saying
remove that cap, but that may be one of the reasons why
we're seeing more of the grants go out to private
sector training vendors. For example, the union
apprenticeship training programs are private sector
programs funded by labor and management and they are
one of the programs that has received more recently. To
compete for that on the open market, announce bids,
etc. One of the reasons I think is the actual nature of
STEP being reauthorized on a two-year basis and then
between that, there's all kinds of things added on in
terms of performance and measuring and other things
that people want to see done that add a cost to the
system. I think what we really need to focus in on is,
are we putting Alaskans to work? Are we increasing
Alaska hire as a result of STEP? Are they getting more
income in their pockets and are they paying less
unemployment with this? Let's all work together so that
we can have the best workforce in Alaska….
CHAIRMAN STEVENS thanked him for his testimony and adjourned the
meeting at 3:30 pm.
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