Legislature(1997 - 1998)

03/10/1998 03:55 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
        SB 245 - EXTEND STATE TRAINING AND EMPLOYMENT PROG                     
CHAIRMAN LEMAN announced SB 245 to be up for consideration.                    
MR. MIKE ANDREWS testified in 1996 when the Legislature                        
reauthorized the State Training Employment Program (STEP), it gave             
the Alaska Human Resources Investment Council more authority for               
oversight and mandated that they monitor the program to do several             
things: to track eight cost categories for spending, to reduce the             
amount of money recaptured by the Unemployment Trust, so that more             
money could be used for the job seekers, and hold administrative               
costs to below 20 percent.  The Committee should have a final                  
assessment report for FY  97 that was prepared by the Alaska Human             
Resources Investment Council in their packets indicating that the              
legislative mandates were met, he said.  They were able to serve               
443 more customers this year with about the same funds they had                
last year, reducing the costs per client from about $2,000 to                  
$1,500.  They have also held the costs for administration to below             
20 percent.  The STEP program is the only State-funded job training            
program under AHRIC oversight.  Of their 17 programs, 16 are                   
federally funded.  This was the only State-funded one and it comes             
from the worker's contribution to the Unemployment Trust.  For                 
clients it has reduced the amount of unemployment insurance claims,            
has lengthened their annual salary, their weeks of work and is a               
very efficient and effective job training program for the State.               
He urged continued support of the STEP program.                                
Number 240                                                                     
MR. DWIGHT PERKINS, Special Assistant, Department of Labor, said               
the STEP was enacted in 1989 as a temporary two-year pilot program.            
Its success led the legislature to extend it three more times.  The            
last extension in 1996 made the STEP permanent, but subject to                 
sunset provision.  Since the last extension, STEP has made great               
strides in addressing legislative concerns with the program.                   
MS. ARBE WILLIAMS, Director, Administrative Services, Department of            
Labor, said that one tenth of one percent of an employee's wage is             
deposited to the STEP account.  The STEP status report shows that              
more of these funds are getting out on the street than ever before.            
Less than $307,000, at most, will be returned to the U.I. Trust                
Fund for FY  97.  She said the report is based on actual payments              
made and has been reconciled to financial information by State                 
delivery area, program elements listed in the legislation, and                 
includes better detail.                                                        
Number 290                                                                     
MS. YVONNE CHASE, Director, Division of Community and Rural                    
Development, said there are a number of ways they measure the                  
success of the STEP program: the reduction in claims filed against             
the U.I. Fund (down to 345 from 538 in the year after the                      
participants completed the STEP), the reductions in the benefits               
paid out of the Fund as a result of that decrease (in FY  95 from              
$1.6 million prior to the client's entering STEP to a little over              
$800,000 after they left the program), and the increase in new                 
business created in Alaska as a result of having a trained work                
force.  They measure that by looking at the STEP participants who              
complete the program and enter newly created jobs.  Statistics of              
newly created jobs are fairly phenomenal, 251 (about 29 percent)               
actually entered newly created jobs in FY  95.  In FY  96 that                 
number jumped to 48 percent (353).                                             
Number 338                                                                     
CHAIRMAN LEMAN asked why they didn't just extend the sunset date               
instead of removing the clause.                                                
MR. PERKINS answered that since 1989 it was a pilot program, but               
has proved itself to be such a worthwhile program that could be                
made permanent by removing the sunset provision.                               
CHAIRMAN LEMAN said he didn't really agree with that.                          
SENATOR MACKIE said he thought this was a good program and that he             
wanted to support it.  He thought that the way they treat the other            
programs that are also critical is with a sunset, so it can be                 
reviewed.  He thought there might be more problems being repealed              
than extending the sunset date.                                                
MR. PERKINS said they could accommodate a four-year sunset.  He                
pointed out again that they had stayed within the financial and                
administrative limits the legislature gave them two years ago.                 
SENATOR MACKIE made a conceptual amendment to delete Sections One              
and Two and insert standard language extending the program until               
June 30, 2002.  There were no objections and it was so ordered.  He            
said it was his intent to have the title redrafted according to the            
standard extension date language.                                              
SENATOR KELLY said he thought because there really aren't any                  
federal regulations guiding the use of this money, it would be easy            
for it to be used inappropriately.  But since it's such a good                 
program, it should continue as long as the legislature could keep              
an eye on it.  Senator Torgerson had questioned whether they had               
really reached their targeted 20 percent reduction, he added.                  
Number 424                                                                     
MS. MARY SHIELDS, Northwest Employment Service, said she is                    
extremely pleased that they are all up to speed on this program.               
SENATOR MACKIE moved to pass CSSB 245 (L&C) from Committee with                
individual recommendations.  There were no objections and it was so            
CHAIRMAN LEMAN asked if Ms. Tatlow had any comments.                           
MS. SHIELDS indicated that Ms. Janice Tatlow wanted to support SB
245, but had left when the Committee passed it.                                

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