Legislature(1997 - 1998)
03/10/1998 03:55 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 ordered. 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.