Legislature(1999 - 2000)
02/17/1999 01:40 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
GENERAL SUBJECT(S): Missions and Measures Discussion
Mental Health Trust Authority
The following overview was taken in log note format. Tapes and
handouts will be on file with the House Finance Committee through the
21st Legislative Session, contact 465-2156. After the 21st Legislative
Session they will be available through the Legislative Library at 465-
3808.
Time Meeting Convened: 1:40 p.m.
Tape: HFC 99 - 22, Sides 1 & 2
HFC 99 - 23, Side 1
PRESENT:
X
Representative G. Davis
X
Co-Chair Therriault
X
Representative Foster
X
Co-Chair Mulder
X
Representative Grussendorf
X
Representative Austerman
X
Representative Kohring
X
Representative Bunde
X
Representative Moses
X
Representative J. Davies
X
Representative Williams
ALSO PRESENT:
JEFF JESSEE, EXECUTIVE DIRECTOR, ALASKA MENTAL HEALTH TRUST
AUTHORITY, DEPARTMENT OF REVENUE; NELSON PAGE, CHAIR, ALAKSA MENTAL
HEALTH TRUST AUTHORITY; PHIL YOUNKER, JR. COMMISSIONER'S OFFICE-
CHAIR, ASSET MANAGEMENT COMMITTEE, ALAKSA MENTAL HEALTH TRUST
AUTHORITY.
LOG
SPEAKER
DISCUSSION
000
HFC 99-22, SIDE 1
BEGIN TAPE
Co-Chair Mulder
Convened the meeting at 1:40 p.m.
037
Co-Chair Mulder
Provided members with a memorandum
relating to the supplemental budget,
missions and measures and subcommittee
work (copy on file). He asked subcommittee
chairmen to look at supplemental items
that are within their agencies' budgets.
Members were directed to look for
alternative funding sources and review
items and determine their justification.
236
Representative
Grussendorf
Questioned within which agencies the
disaster expenditures would go.
387
Co-Chair Mulder
Stated that the two floods and the fire
disaster expenses would be under the
Department of Natural Resources. The
judgements against the state would be
reviewed in the Department of Department
of Law's budget. The Western Alaska
fishing disaster would go under Department
of Fish and Game.
437
Representative J.
Davies
Noted that the Department of Health and
Social Services, Department of Community
and Regional Affairs, Department of
Military and Veterans Affairs, Department
of Commerce and Economic Development,
Department of Law and Department of Fish
and Game were all involved in the Western
Alaska fisheries disaster.
481
Co-Chair Mulder
Discussed missions and measures. He
directed subcommittee chairmen to review
the mission and measures for each
department.
531
Representative
Austerman
Questioned the Committee's input to
missions and measures.
Co-Chair Mulder
Emphasized that the Committee would work
with departments to draft missions and
measures.
612
Representative J.
Davies
Noted the importance of agreeing on the
missions and measures. He observed that
the governor removed the missions and
measures from the FY99 operating bill. The
missions and measures were included as
intent language for the FY99 operating
budget.
675
Co-Chair Mulder
Observed that the Office of Management and
Budget has expressed concern that they
would not have the time needed to reach
consensus on all the missions and
measures. He suggested that it is more
important to have an outer form than a
perfect wheel.
722
Representative
Grussendorf
Expressed concern that the Committee not
try to resolve missions and measures for
every component. He suggested that hot
spots be reviewed.
760
Co-Chair Mulder
Make an attempt to make it as expeditious
as possible. He noted that each division
should already have a mission statement.
Explained that the hope or desire is that
consolidations can be identified through a
review of missions and measures.
847
Representative
Austerman
Pointed out that it behooves the
Legislature to do as much as possible. The
more that is done this year the less that
will need to be done next year. Suggested
that review of missions and measures
continue during the interim.
923
Co-Chair Mulder
Noted that it is a long-term process with
a long-term gain.
991
Co-Chair Mulder
Discussed item 3 under missions and
measures. Alignment of missions. Stressed
the need to prioritize within the
departments. What things are essential,
what things could be put on the table for
reductions.
1063
Co-Chair Mulder
Discussed the subcommittee process.
1121
Co-Chair Mulder
Discussed work suggestions from the
subcommittee. Directed subcommittee
chairmen to check the state match to
federal programs to make sure they are not
being overmatched and to ask about
opportunities to gain additional federal
funds. Cautioned subcommittee chairmen not
to always accept the department's figures
and statements as factual; utilize the
Legislative Finance Division.
1187
Co-Chair Mulder
Asked subcommittee chairmen to work with
the Administration and commissioners and
to talk to commissioners about their more
aggressive ideas. The intent is to
cooperate with the Administration.
1306
Representative
Austerman
Asked if reductions would come off of the
Governor's proposed budget.
1337
Co-Chair Mulder
Directed subcommittee chairmen to begin
with the FY99 authorized amount.
1358
Representative
Austerman
Observed that the priority for overall
government has not been set.
1425
Representative
Austerman
Questioned how many state troopers are
needed and how does the subcommittee
determine the need.
1450
Co-Chair Mulder
Maintained that it is an appropriate
question for the subcommittee chair to
ask.
1489
Representative
Austerman
Questioned what is necessary versus what
is proper for state government. Stressed
that there has not been a prioritization
of the function of state government.
Representative
Bunde
Noted that determinations will be made on
what best fits the member's constituency.
1555
Representative
Austerman
Emphasized that decisions must be made on
what is best for the state.
1578
Representative
Bunde
Stressed that it is difficult to know the
right answer to what is best for the
state.
1630
Co-Chair Mulder
Stressed that the fiscal gap has been the
major area of focus over the six years
that he has been a legislator. Pointed out
that if the FY95 budget were adopted, with
additions for inflation and population,
the state would spend $3.1 billion dollars
for the current year.
1707
Representative
Austerman
Emphasized the need to discuss how far the
state will go.
1742
Co-Chair Mulder
Noted that questions will be asked and
issues discussed in caucus.
1795
Co-Chair Mulder
Provided members with an All Funds Fiscal
Summary (copy on file). He noted that past
years' deliberation have focused on
general funds.
1833
Representative
Foster
Noted the large number of overviews and
bureaucracy. Stressed that personnel in
the field have been lost. Questioned if
government should be reorganized to make
it more efficient.
1942
Representative
Bunde
Noted that it is interesting to talk about
the management employee ratio. Pointed out
that if all funds are not recognized that
there may be a false perception that
something is being hidden. Observed that
the cost of doing business is higher in
the state of Alaska. He stressed that we
are not willing to accept that it takes
more state money to provide government in
Alaska.
2027
Representative
Kohring
Observed that he has filed a bill to merge
the Department of Community and Regional
Affairs and Department of Commerce and
Economic Development. Stressed the need to
look at other areas that can be merged.
Noted that Senator Halford has recommended
that the Department of Natural Resources
and Department of Environmental
Conservation be merged. He observed that
Senator Phillips recommends that items be
judged by whether they are constitutional,
in state statute, or was it in place
before the discovery of oil. He noted that
these are good questions to be asked. He
maintained that the Committee should
determine what is essential. They should
fully fund those things that considered to
be essential and eliminate nonessential
programs.
2162
Representative
Austerman
Maintained that there needs to be an
overall prioritization of what the state
needs to look like over the long term. He
questioned if the Department of Labor is
necessary. Recommended that the Committee
look at what federal programs that the
state is taking in that the state will
have to pay to continue. Noted that the
One-Stop program has been paid for with
federal funds. When the federal government
stops paying the cost of the program will
fall to the state.
2240
Representative
Grussendorf
Easiest to look at general funds and
program receipts. Make sure public
understands that there are other funding
sources. Stressed that it is easy for
people to get lost in all funds.
2278
Co-Chair Mulder
Asked if retirement funds or permanent
fund dividends should be reflected as
appropriations or included under all
funds. Pointed out that duplicate
expenditures and federal funds need to be
backed out.
2317
Representative
Foster
Stressed that it is easy to forget that
there is a person behind each position.
Noted that a single mother that is trying
to pay her bills could hold a reduced
position. Emphasized that positions are
being reduced in rural Alaska. He noted
that there are no Department of
Environmental Conservation employees in
his district. There is only one half-time
Department of Natural Resources position
and one Division of Motor Vehicles
position in his district. Stressed that
services need to be protected when cuts
are made. Pointed out that there are
people that live in rural areas that need
the services that cannot afford high user
fees.
000
HFC 99-22, SIDE 2
TAPE CHANGE
Representative
Foster
Stressed that less government is being
provided in rural areas and more in urban.
144
Representative
Bunde
Need to acknowledge the cost of doing
business in Alaska. Pointed out that
Alaska is unique. Stressed that there has
to be a balance between what is wanted and
what is needed and how much service the
state is going to provide.
342
Representative J.
Davies
Acknowledged that the state needs to make
sure check book is balanced, but stressed
that a focus on cutting does not address
the question: What is the right amount of
government? Noted that economic
development requires more government.
Focus should be on a healthy economy and
providing jobs. Stressed that if people
should be allowed to pay for services they
want through statutory designated program
receipts. Maintained that small government
is too small of a focus.
572
Representative
Williams
Observed that his constituents say no new
taxes until spending is under control.
Noted that he has tried to ask his
constituents what programs they can do
without. Stressed that it is clear that
education needs to be funded.
730
Representative
Foster
Stated that he has watched the budget be
cut, at the same time that legislation has
been passed with new fiscal notes.
782
Co-Chair Mulder
Noted that is less legislation has been
introduced due to the fiscal gap.
MENTAL HEALTH TRUST AUTHORITY
815
NELSON PAGE,
CHAIR, ALAKSA
MENTAL HEALTH
TRUST AUTHORITY
Provided members with a handout "The
Trust, Alaska Mental Health Trust
Authority, HB 51" (copy on file). He
maintained that the recommendations by the
Trust are based on a ver rigorous
winnowing process. He emphasized that the
recommendations are the tip of the iceberg
in terms of what is needed, wanted or
desired in mental health programs. The
Trust starts with recommendations form
advisory boards and commissions. The Trust
999
Mr. Nelson
Beneficiaries of the trust are people with
mental illness; people with mental
retardation and similar disabilities;
chronic alcoholics with psychosis; and
people with dementia. Beneficiaries range
in age from birth to death.
1079
JEFF JESSEE,
EXECUTIVE
DIRECTOR, ALASKA
MENTAL HEALTH
TRUST AUTHORITY,
DEPARTMENT OF
REVENUE
Discussed history of the Mental Health
Trust Authority. He noted that the as a
territory Alaska did not have meaningful
services. When Alaska was a territory the
mentally ill were sent to the Morningside
institution in Oregon. The federal
government paid for the Morningside
institution. Concerns were expressed at
statehood regarding Alaska's ability to
pay for the care of the mentally ill. At
statehood a three pronged strategy was
adopted to pay for the mentally ill. The
state was given $6 million dollars to
build the Alaska Psychiatric Institute,
the state received an amount of funding
that would decrease over 8 years to wean
the state, and the mental health land
trust was created. State received 1
million acres of land and act as the
trustee. The state did a good job at
selecting lands for the trust. To generate
revenue.
1289
Mr. Jessee
Noted that the state did a good job at
selecting premium land. At statehood
Alaska received 102 million acres of other
federal land. The land was all lumped
together. The best 500 thousand acres of
the 1 million acres were taken out of the
Trust. He observed that 5,000 Alaskans
received portions of trust land without
paying compensation to the Trust.
1321
Mr. Jessee
In 1979, an attempt was made to clear the
title of trust lands held by individuals.
The legislature passed a law to make all
trust lands general state land. The Mental
Health Trust Income Account was formed to
compensate the Trust. One and a half
percent of what was earned from all state
land was supposed to go into the Trust.
1430
Mr. Jessee
Noted that the state did not put any money
into account. A lawsuit was initiated to
return the land to the Trust.
1435
Mr. Jessee
Alaska Supreme Court would not allow land
to be taken, and told the state to put it
back. Three settlements before a solution
were reached.
1477
Mr. Jessee
Outlined the terms of the settlement. The
settlement would reconstitute the land
trust of 1 million acres. A one-time $200
million dollar cash compensation was
negotiated in recognition that the
reconstituted land was not equal in value
to the original land selection. An
independent Board of Trustees would
administer the Trust. The Trust Authority
was free to use trust resources to act as
a catalyst for change.
1527
Mr. Jessee
Noted that there was concern that programs
were fragmented and there was duplication
and inefficiencies, which caused people to
fall between cracks. An umbrella
appropriation bill was created for one
comprehensive set of services. It also
included prevention programs.
1659
Mr. Jessee
Discussed page 2 of the handout, Mission
and Vision. The Trust has a fiduciary
responsibility to its beneficiaries to
enhance and protect the Trust and provide
leadership advocacy, planning,
implementation, and funding of a
comprehensive integrated mental health
program to improve the lives and
circumstances of its beneficiaries.
1693
Mr. Jessee
Discussed page 2, Trust Responsibilities.
Manage the land and cash assets of the
Trust in perpetuity; provide leadership &
advocacy for beneficiaries; and recommend
the state's budget for the Comprehensive
Integrated Mental Health Program.
1711
Mr. Jessee
Discussed page 3. Noted that there were
concerns that the Department of Natural
Resources would manage land. This has not
been a problem. The focus of proper
management was successful. Investment in
the Trust Land Office, in the Department
of Natural Resources was successful. The
FY98 return was close to 70 percent.
1801
Mr. Nelson
There has been steady growth of trust. The
Trust Land Office is generating almost $5
million dollars in income.
1842
Representative
Williams
How was the money made?
1889
Mr. Jessee
Timber sales, lease agreements, gravel
sales and other sources. Will provide the
Legislature with a five-year plan.
1902
Representative J.
Davies
How is principle defined?
1920
Mr. Jessee
Explained statutes governs what is the
principle and what is considered income.
Income is available to spend. Principle
must be protected.
1957
Mr. Jessee
Discussed cash assets. Managed by the
Permanent Fund Corporation. Trustees
concern that there not be variation
between years and inconsistency in funding
levels. The total payout of fund started
at 3 percent and is now at 3.25 percent.
The number will grow to the projected rate
of return of the permanent fund and
inflation. There was concern that in years
where the permanent fund doesn't make a
sufficient profit that the payout amount
would dip into the principle. Contracted
to develop a principle reserve sufficient
to pay payout in a sustained downturn in
the market. The contractor recommended
that 400 percent or 4 years of the payout
should be set aside in case of a downturn.
2105
Mr. Jessee
The Trust lost $30 million in less then a
month during the last downturn. Because of
the Trust's setup there was no impact on
the payout.
2136
Mr. Jessee
Discussed page 3, Trust Land Management
Framework and Revenue vs. Operate costs.
Mr. Jessee
Discussed Page 4, where funds go.
2171
Mr. Mr. Jessee
Spoke to the cost per unit of service. How
will it be known if the beneficiaries have
received what they need.
2226
Mr. Jessee
Concluded that the Trustees must determine
what needs to be accomplished and then
make strategic benefit analysis.
2251
Mr. Jessee
Discussed Page 6, Changing the Culture. He
noted that the Trustees are looking for
healthy, safe, economically secure,
productive beneficiaries who are living
with dignity as valued member of their
communities.
2307
Mr. Jessee
Discussed Page 7 Measures used to gage
success.
2330
Mr. Jessee
Referred to the Governor's Council on
Disabilities and Special Education,
Investment in Results Outcome Based
Decision Making. He noted that results
based budgeting must penetrate into the
community. Make sure it is translated into
the grass roots levels.
2375
Mr. Jessee
Mentioned the concept of Life Domain. It
is clear to the Trust; success depends
more than just treatment. They need
additional assistance
HFC 99-23, SIDE 1
TAPE CHANGE
96
Mr. Jessee
Pointed out that beneficiaries need health
care to be employed.
114
Mr. Jessee
Discussed Page 8, Harborview Developmental
Center. The problem was that for the state
to take the remaining budget of Harborview
and put it into community would take
decision to fund two programs at the same
time during transition.
201
Mr. Jessee
Trustees decided to put money into
Harborview so that the Legislature could
put their money back into the community.
Only one of two states to have community
care for mentally ill.
300
Mr. Jessee
Discussed Page 9, Housing. The Trust
partnered with the Alaska Housing Finance
Corporation (AHFC). Observed that AFHC has
shown a willingness to work with the Trust
and a willingness to rethink their program
as it relates to beneficiaries.
379
Mr. Jessee
Discussed Alcohol and Drug Abuse. Provided
members with a booklet, "Results Within
Our Reach" (copy on file). Referred to
page 3 of the booklet.
433
Mr. Jessee
Discussed Page 10 of the prior handout
"The Trust, Alaska Mental Health Trust
Authority, HB 51", Department of
Corrections. Stressed that until 2 years
ago there were no mental health services
for mentally ill women inmates. They were
put in segregation cells for up to 23
hours a day. The Trust did a study to
identify the health needs and scope of the
problem. The Trust funded a planner
position to develop an effective treatment
plan. The Trust paid for all of the
service for half of the first year, two-
thirds of the second year and half of the
third year.
640
Mr. Jessee
Discussed Healthy Families Program. The
Trust is funding a study to see if the
program is working and effective.
680
Co-Chair
Therriault
Questioned how long the study would run.
693
Mr. Jessee
Explained that they are presently
contracting experts to determine how long
the study needs to run. The Trust will
consult with the Legislature to determine
if the study questions are appropriate.
763
Mr. Jessee
Discussed page 11, Seniors. 50 percent of
those over 80 have some form of dementia.
The senior care system has a growing need.
838
Mr. Jessee
Discussed Page 12, Alaska Psychiatric
Institute (API). There is a three-prong
strategy to deal with the aging hospital.
Noted that Anchorage uses API for its
emergency psychiatric care. Pointed out
that statute changes need to be made in
order to switch programs to community
based service.
948
Mr. Jessee
Discussed page 13, Mental Health Quality
Assurance. Emphasized consumer
satisfaction, quality of services and
fiscal accountability. Agencies that had
up to three reviews now have one review
that focuses on their entire program.
1063
Mr. Jessee
Discussed economic security. Noted that
health care insurance is a major problem
with employability. Loss of Medicaid is an
issue for employment in low paying jobs.
1118
Mr. Jessee
Discussed Page 14, Better use of existing
resources. Observed that coordinated
transportation is encouraged to reserve
resources. The Trust matches federal
funding to develop local coordinated
transportation plans. Efficiencies need to
be done to justify expense in
transportation
1213
Mr. Jessee
Discussed The Alaska Mental Health Trust
Authority's FY00 Operating
Recommendations.
1289
Mr. Nelson
Their operating recommendations are
divided into Mental Health Trust Authority
authorized receipts (MHTARR) that are paid
to programs by the Trust and general
fund/mental health funding which comes
from the state.
1301
Mr. Nelson
Pointed out that capital appropriation
emphasizes the partnership with AHFC for
housing as one of the critical life domain
issues. Observed that a substantial
portion goes toward the Alaska Psychiatric
Institute. Maintained that all flow from
setting priorities, results and measure.
1333
Co-Chair Mulder
Asked the source of the $15 million
dollars for the replacement of API.
1346
Mr. Nelson
Explained that federal funds would be
available to fund community programs that
are part of the API process. He noted that
decisions must be made in regards to what
is done with the old hospital, how the new
hospital is funded, and what will be done
with patients that used to be in the old
hospital but would now be served in the
community. The Federal Substance Abuse and
Mental Health Administration will provide
some funding. Some funding would come from
the federal Department of Housing and
Urban Development. Noted that they are
looking for federal funds for the
building.
1391
Representative G.
Davis
Pointed out that the Mental Health Trust
Authority funded the task force on
insurance that will be out next week.
1432
Co-Chair
Therriault
Noted that the under the agreement the
interest from the Trust was not suppose to
replace general funds. Asked what level of
general funds spending is mandated by the
settlement.
Mr. Jessee
Clarified that the settlement doesn't
eliminate the responsibility of the state
to fund a mental health program under its
constitutional responsibility.
1497
Representative J.
Davies
Observed that the agreement stated that
the Alaska Mental Health Trust Authority
would propose a mental health budget. If
the budget they recommend is not adopted
by the legislature, the legislature is
directed to explain why items were not
funded.
1524
Mr. Nelson
Agreed. The process provides that budget
recommendation be given to the governor by
Sept 15 of each year. The settlement
requires the Governor to also present
reasons if budget is not accepted.
1561
Co-Chair Mulder
Asked what are the adjustments to the FY99
base.
1573
Mr. Jessee
Discussed adjustments to the mental health
base. Each year the boards recommend
additional programs under the overall
umbrella. They are parts of the existing
mental health general funds budget that
should be under the overall umbrella. He
explained that the $4 million dollars
identified for the Office of Public
Advocacy and Pioneer Homes would only
resize the box
1619
Co-Chair
Therriault
Asked if the Trustees put together the
entire request for all mental health.
Mr. Jessee
Yes entire package goes independently to
the legislature and the governor. At the
time of the settlement it was acknowledged
that there is no way to mandate level to
the state. Allows Trustees to make
recommendations and see why their advice
was not accepted to make better
recommendations.
1677
Representative
Williams
Questioned why Ketchikan Residential
Center was not included in the budget.
1687
Mr. Jessee
Clarified that the project was included in
the Alaska Mental Health Trust Authority's
recommendation. The Governor's letter of
rejection focused on the fiscal gap.
1734
Representative
Williams
Noted that the project is ongoing and
questioned what would happen to it.
1748
Mr. Nelson
The Trust will continue to press for its
recommendations. The Trust is trying to be
aware of the fiscal problems.
1779
Co-Chair
Therriault
Pointed out that the fiscal situation has
gotten worse since the Governor submitted
his budget.
1805
Representative G.
Davis
Referred to a letter from a realtor in his
district. The Alaska Mental Health Trust
Authority now manages his lease. His lease
has increased from $211 to $2,900 dollars
a year.
1865
Mr. Jessee
Clarified that the Authority has picked up
leases that were formerly managed by the
Department of Natural Resources, but
emphasized that they are obligated to
honor all terms of lease. Fair market
value is used when leases are reevaluated.
1937
Mr. Nelson
Pointed out that the Trust has to exist in
perpetuity, but acknowledged that it needs
to be a good neighbor and that promises
were made.
1963
Representative J.
Davies
Referred to Page 3 of the organizational
chart. Pointed out that other state lands
refers to the Department of Natural
Resource's management of other state
lands. One of reasons this structure was
set up was to allow mental health lands to
be managed for the benefit of trust while
recognizing that the general good needed
be kept in perspective.
2011
Mr. Jessee
The Trust Land Office set up regulations
to look at compatibility with trust
management.
2081
Mr. Jessee
In response to a question by
Representative J. Davies, Mr. Jessee noted
that the Department of Natural Resources
has competing interests. No matter what
they do someone will be upset. Noted that
the Department of Natural Resources refers
timber sales to the Trust. Discussed
cooperative efforts with the Department of
Natural Resources.
2291
Co-Chair Mulder
ADJOURNMENT
The meeting adjourned at 4:00 p.m.
HOUSE FINANCE COMMITTEE
LOG NOTES
February 17,1999
House Finance Committee 1 2/17/99
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