Legislature(2003 - 2004)

03/18/2003 03:31 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
        SB 115-CORRECTIONAL INDUSTRIES PROGRAM EXPENSES                                                                     
CHAIR GARY STEVENS asked Mr. Burnett to introduce SB 115.                                                                       
MR.  JERRY   BURNETT,  Department  of  Corrections   Director  of                                                               
Administrative   Services,   explained   the  bill   allows   the                                                               
Correctional  Industries Fund  to  pay state  employee wages  and                                                               
benefits  for  the  product  managers  employed  in  correctional                                                               
industries.  Effectively, $960,000  would  be  paid from  product                                                               
revenues instead of from the general fund.                                                                                      
CHAIR GARY STEVENS asked what  the current product revenue figure                                                               
MR.  BURNETT  replied  the estimate  for  FY04  is  approximately                                                               
$4,150,000. If SB 115 passes, they  would have to manage the fund                                                               
more aggressively in an effort to increase revenues.                                                                            
CHAIR GARY STEVENS asked him to elaborate.                                                                                      
MR.  BURNETT added  they have  product managers  and correctional                                                               
inmates  who  are  employees.  Currently   they  run  the  Juneau                                                               
Commercial  Laundry,  Fairbanks  Garment/Flat goods  Shop,  Kenai                                                               
Office Furniture  Systems Plant, Eagle River  Garment Shop, Kenai                                                               
Metals  Plant,  Seward Wood  Furniture  Plant,  Palmer Auto  Body                                                               
Shop, and Juneau Staph Guard Hospital Laundry.                                                                                  
SENATOR JOHN COWDERY  asked if the purpose was  to shift employee                                                               
costs from the general fund.                                                                                                    
MR. BURNETT replied  the salaries and benefits of  all 14 product                                                               
managers  associated with  correctional industries  are currently                                                               
paid from the general fund.  This bill would allow their salaries                                                               
and benefits to be paid from correctional industries revenues.                                                                  
SENATOR  HOFFMAN asked  if the  salaries and  benefits for  those                                                               
positions would remain the same.                                                                                                
MR. BURNETT replied there is no proposal to change them.                                                                        
SENATOR GUESS asked for the current revenues and expenditures.                                                                  
MR.  BURNETT   advised  current  revenues  for   Fy04  are  about                                                               
$4,150,000 and  without any changes,  they expect to have  a fund                                                               
balance  of  about $300,000  at  the  end  of this  fiscal  year.                                                               
Therefore,  they  would need  to  increase  revenues to  pay  the                                                               
salaries and benefits.                                                                                                          
SENATOR GUESS  asked what would  be eliminated if  those revenues                                                               
don't increase.                                                                                                                 
MR. BURNETT  said they  would have  to "find  efficiencies within                                                               
the department to cover the costs."                                                                                             
SENATOR GUESS queried  whether passing this bill  would result in                                                               
positions being cut.                                                                                                            
MR. BURNETT replied  they did not plan to cut  any positions as a                                                               
result of passing SB 115.                                                                                                       
SENATOR  GUESS  questioned  whether  the  salaries  and  benefits                                                               
discussed could  be part  of the reduction  if the  department is                                                               
unable to make up the more than $600,000 difference.                                                                            
MR.  BURNETT wasn't  able to  offer an  answer regarding  how the                                                               
department would  handle reductions if  they were unable  to make                                                               
up the revenues.                                                                                                                
SENATOR GUESS  said she wasn't  making herself clear.  She wanted                                                               
to  know if  including salaries  and  benefits would  make it  an                                                               
option to  exclude them in  a reduction because they  wouldn't be                                                               
excluded now.                                                                                                                   
MR.  BURNETT replied  salaries and  benefits  are currently  paid                                                               
from  the  general fund  and  a  general  fund reduction  to  the                                                               
department could result in a cut to those positions.                                                                            
SENATOR  GUESS  said  she  was  talking  about  the  Correctional                                                               
Industry Fund.                                                                                                                  
MR.  BURNETT advised  cutting  positions would  be  one of  their                                                               
options if  the industry fund  was unable to  generate sufficient                                                               
revenues to pay for the salaries and benefits of its employees.                                                                 
SENATOR  GUESS  asked, "But  it  wouldn't  be  right now  if  the                                                               
Correctional Industries  Fund fell  short. You  couldn't actually                                                               
reduce salaries and benefits."                                                                                                  
MR.  BURNETT  replied,  "Currently,  if  correctional  industries                                                               
revenues were  to fall short, it  is likely that we  would reduce                                                               
the number  of product managers we  have even though it  is not a                                                               
direct  relationship to  the general  fund. We  would because  we                                                               
wouldn't have  sufficient work and  sufficient income  to justify                                                               
those positions."                                                                                                               
CHAIR GARY STEVENS commented the task  isn't easy but the idea is                                                               
the program should pay its way.                                                                                                 
MR. BURNETT agreed.                                                                                                             
SENATOR  HOFFMAN   asked  how  they   planned  to   generate  the                                                               
additional revenue.                                                                                                             
MR.  BURNETT wasn't  in a  position  to answer.  The manager  was                                                               
going to retire  and the department would look for  a new manager                                                               
with the entrepreneurial skills to actualize the goal.                                                                          
SENATOR COWDERY  asked what  the money  in the  fund is  used for                                                               
MR.  BURNETT replied  it  is used  to buy  supplies  and pay  for                                                               
equipment  and  pay the  salaries  of  the  inmates who  work  in                                                               
correctional industries.                                                                                                        
SENATOR COWDERY asked how much inmates are paid per hour.                                                                       
MR.  BURNETT wasn't  sure,  but  thought they  were  paid in  the                                                               
neighborhood of  fifty cents per  hour. Even so, they  would need                                                               
significant new revenues.                                                                                                       
SENATOR   DYSON  advised   he  has   a  continuing   interest  in                                                               
correctional  industries.  The  capacity   crisis  in  the  state                                                               
prisons makes  it very  difficult to  take advantage  of training                                                               
and  job opportunities.  The prison  population must  become more                                                               
stable before meaningful training is  possible. He sees no reason                                                               
why  the auto  body shop  at Sutton  couldn't one  day become  as                                                               
successful as the  Nevada prison auto shop  where inmates restore                                                               
antique and  classic automobiles.  The men  and women  trained in                                                               
that Nevada  shop have few  discipline problems and  an extremely                                                               
low recidivism  rate. Those  inmates have  a trade  and typically                                                               
one or two job offers when they  are released so they are able to                                                               
support themselves and their families.                                                                                          
SENATOR  COWDERY asked  whether  Florence,  Arizona inmates  were                                                               
required to  get a GED  [General Educational  Development] before                                                               
they could apply for a job while in prison.                                                                                     
SENATOR HOFFMAN recalled  inmates were required to  work toward a                                                               
GED before they could get TV privileges.                                                                                        
SENATOR COWDERY thought the idea was worthwhile.                                                                                
CHAIR GARY  STEVENS acknowledged  that Mr.  Burnett had  his work                                                               
cut out  for him, but this  could provide a good  opportunity for                                                               
everyone involved.                                                                                                              
There was no further testimony.                                                                                                 
CHAIR GARY STEVENS asked for a motion to move SB 115.                                                                           
SENATOR DYSON  made a motion to  move SB 115 and  attached fiscal                                                               
note from committee with  individual recommendations. There being                                                               
no objection, it was so ordered.                                                                                                

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