Legislature(1999 - 2000)

01/18/2000 01:40 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
GENERAL SUBJECT(S):  REVIEW OF DEPARTMENTS ACCOMPLISHMENTS                                                                      
    DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                                                                    
    DEPARTMENT OF REVENUE                                                                                                       
                                                                                                                                
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(s):   HFC 00 - 9,  Side 1                                                                                                  
  HFC 00 - 9,  Side 2                                                                                                           
  HFC 00 - 10, Side 1                                                                                                           
                                                                                                                                
                                                                                                                                
PRESENT:                                                                                                                        
X                                                                                                                               
Representative G. Davis                                                                                                         
Absent                                                                                                                          
Co-Chair Therriault                                                                                                             
X                                                                                                                               
Representative Foster                                                                                                           
X                                                                                                                               
Co-Chair Mulder                                                                                                                 
X                                                                                                                               
Representative Grussendorf                                                                                                      
X                                                                                                                               
Vice Chair Bunde                                                                                                                
X                                                                                                                               
Representative Moses                                                                                                            
X                                                                                                                               
Representative Austerman                                                                                                        
X                                                                                                                               
Representative Phillips                                                                                                         
X                                                                                                                               
Representative J. Davies                                                                                                        
X                                                                                                                               
Representative Williams                                                                                                         
                                                                                                                                
ALSO PRESENT: KAREN PERDUE, COMMISSIONER, DEPARTMENT OF HEALTH AND                                                              
SOCIAL SERVICES; JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE                                                             
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES; PAM WATTS,                                                                  
EXECUTIVE DIRECTOR, GOVERNORS ADVISORY BOARD ON ALCOHOL AND DRUG                                                                
ABUSE; WILSON CONDON, COMMISSIONER, DEPARTMENT OF REVENUE; LARRY                                                                
PERSILY, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE; MICHAEL MAHER,                                                             
DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF                                                                    
REVENUE.                                                                                                                        
                                                                                                                                
LOG                                                                                                                             
SPEAKER                                                                                                                         
DISCUSSION                                                                                                                      
                                                                                                                                
TAPE HFC 00 - 9                                                                                                                 
SIDE 1                                                                                                                          
                                                                                                                                
                                                                                                                                
000                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Co-Chair Mulder convened the House                                                                                              
Finance Committee meeting at 1:40 P.M.                                                                                          
                                                                                                                                
                                                                                                                                
DEPARTMENT OF REVENUE                                                                                                           
165                                                                                                                             
WILSON CONDON,                                                                                                                  
COMMISSIONER,                                                                                                                   
DEPARTMENT OF                                                                                                                   
REVENUE                                                                                                                         
Addressed the mission of the Department.                                                                                        
He explained the role of that Department                                                                                        
for the State of Alaska:                                                                                                        
*Tax division - charitable gaming laws;                                                                                         
*Treasury division - manages the State                                                                                          
tax flow;                                                                                                                       
*Child Support Enforcement Division-                                                                                            
distributing child support payments and                                                                                         
establishing and modifying child support                                                                                        
obligations.                                                                                                                    
*Permanent Fund Division; and                                                                                                   
*Policy assistance for other Divisions                                                                                          
within the Department.                                                                                                          
He continued that there are a number of                                                                                         
*Boards within the Department of Revenue:                                                                                       
*Alaska Housing Finance Corporation                                                                                             
(AHFC)                                                                                                                          
*Alaska Permanent Fund                                                                                                          
*Alaska Mental Health Trust Authority                                                                                           
*Bond Bank Authority                                                                                                            
*Alaska State Pension Investment Board                                                                                          
*ABC Board                                                                                                                      
523                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Focused on the tax divisions.  It is                                                                                            
expected that the correct tax amounts are                                                                                       
deposited into the State Treasury.  He                                                                                          
advised that the customers are everyone                                                                                         
in the State who uses public services.                                                                                          
582                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Charitable Gaming Program - Charities                                                                                           
should be the beneficiaries.  There is a                                                                                        
responsibility of the Department to                                                                                             
guarantee that the games are run                                                                                                
lawfully.  The final set of customers are                                                                                       
the municipalities for tax distribution.                                                                                        
There are 140 municipalities that the                                                                                           
State shares taxes with. He stated that                                                                                         
when collecting the correct tax, there                                                                                          
must be an effective program.  The                                                                                              
taxpayer needs to know their obligation.                                                                                        
To measure how effective the program is,                                                                                        
is determined if there is enough money to                                                                                       
pay the States bills.                                                                                                           
749                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Spoke to how the programs are currently                                                                                         
running.  Most of the money comes from a                                                                                        
few large taxpayers and that those                                                                                              
returns are usually audited. Determining                                                                                        
effectiveness is concluded by how soon an                                                                                       
audit is brought to a final conclusion to                                                                                       
close the matter.  Commissioner Condon                                                                                          
pointed out that is how the tax program                                                                                         
has been run for the past five years.  At                                                                                       
present time, subscribers are audited for                                                                                       
returns from the past two years.  With                                                                                          
respect to the corporate income tax, the                                                                                        
Department is now auditing for the past                                                                                         
three years.  With respect to the income                                                                                        
tax, taxpayers file a number of audited                                                                                         
returns.  He stressed that it is more                                                                                           
complex than a severance tax.  He noted                                                                                         
that the Department is now on target with                                                                                       
the income tax.                                                                                                                 
929                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Commented that there are there are                                                                                              
several initiatives coming forward                                                                                              
addressing tax concerns.  He noted that                                                                                         
it is difficult to determine where the                                                                                          
State will end up with regards to the                                                                                           
merger.  The Department might need to                                                                                           
move quickly in order to address the new                                                                                        
marketing situation.  The Department is                                                                                         
attempting to address the motor fuel tax                                                                                        
so as to make it more user friendly.                                                                                            
1018                                                                                                                            
COMMISSIONER CONDON                                                                                                             
In regard to the severance tax                                                                                                  
obligations, it is being attempted to                                                                                           
make them more accessible to the                                                                                                
taxpayers.  He stated that there is                                                                                             
efficiency available now and that it will                                                                                       
be achieved this year.  He explained the                                                                                        
20-mil property tax.  Taxpayers are                                                                                             
allowed to come in to put the facilities                                                                                        
forward putting the field in place.  They                                                                                       
are allowed to take a depreciable value                                                                                         
to reduce that tax obligation. The                                                                                              
taxpayers are legally entitled to do                                                                                            
this.  The taxpayer is going to be                                                                                              
aggressive.  A few of those cases have                                                                                          
come forward, however, he could not                                                                                             
address specifics at this time.                                                                                                 
Commissioner Condon noted that the                                                                                              
production facilities at Prudhoe Bay will                                                                                       
be checked this next year.                                                                                                      
1197                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Questioned if such action would need the                                                                                        
Legislature to change something in law at                                                                                       
this time.                                                                                                                      
1215                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Did not know but offered to get back to                                                                                         
the Representative at a latter date.                                                                                            
1235                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
He asked how that would impact service                                                                                          
areas in the municipalities.                                                                                                    
1258                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Replied that the Department has not                                                                                             
looked at that concern but would in the                                                                                         
future.                                                                                                                         
1290                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Addressed the taxing concern in ordering                                                                                        
cigarettes over the internet.                                                                                                   
1311                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Inquired the trends that the Department                                                                                         
anticipated for this year.                                                                                                      
1332                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Asked the total tax collected.                                                                                                  
1340                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Replied that in 1999, the total taxes                                                                                           
collected were $800 million dollars.                                                                                            
1360                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Asked about shared taxes.                                                                                                       
1368                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Responded the amount shared-back is about                                                                                       
$20 million dollars per year.                                                                                                   
1387                                                                                                                            
COMMISSIONER CONDON                                                                                                             
He noted that this year, tax revenue                                                                                            
should be $300 million higher because of                                                                                        
increased revenues.                                                                                                             
1414                                                                                                                            
COMMISSIONER CONDON                                                                                                             
In response to Representative Foster,                                                                                           
Commissioner Condon stated that in 1989,                                                                                        
total oil revenue was $19 million                                                                                               
dollars.                                                                                                                        
1451                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Questioned if the royalties had been                                                                                            
included in the above figure.                                                                                                   
1462                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Noted that the royalties are not a tax.                                                                                         
1470                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Suggested that the oil royalties appear                                                                                         
connected to that number.  It is oil-                                                                                           
related revenues.                                                                                                               
1495                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Asked if there would be a change                                                                                                
resulting from the merger in respect to                                                                                         
income tax.                                                                                                                     
1512                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Explained that the Department is not sure                                                                                       
about that.  He noted that the State                                                                                            
income revenue could have been $20                                                                                              
million dollars less by combining those                                                                                         
two companies.  Merging does make the                                                                                           
companies more profitable.  It will                                                                                             
change a portion of income in the State                                                                                         
revenue.  It can not be efficiently                                                                                             
determined at this time.                                                                                                        
1605                                                                                                                            
LARRY PERSILY,                                                                                                                  
DEPUTY COMMISSIONER,                                                                                                            
DEPARTMENT OF                                                                                                                   
REVENUE                                                                                                                         
Provided a little tobacco tax                                                                                                   
information.  He noted that $15 million                                                                                         
went into the general fund and $32                                                                                              
million dollars went into the school                                                                                            
fund.  Next year, there is a projected a                                                                                        
slight drop to the general fund.                                                                                                
1665                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Addressed charitable gaming.  There is                                                                                          
about $300 million dollars of gaming done                                                                                       
in the State.  70% of that money is paid                                                                                        
out in prizes, the rest is paid to the                                                                                          
charitable entity.                                                                                                              
1702                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Questioned if the charitable entities                                                                                           
were receiving the amount legislatively                                                                                         
agreed upon.                                                                                                                    
1720                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Responded that the situation has become a                                                                                       
"nightmare".  A floor was established and                                                                                       
the profit above that goes to the people                                                                                        
running the organization.  These people                                                                                         
are being paid a lot and many times too                                                                                         
much.  He questioned how to correct this                                                                                        
situation and still continue to create an                                                                                       
incentive.                                                                                                                      
1814                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Addressed electronic gambling and how                                                                                           
much that would cost.                                                                                                           
1827                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Stated that the Department has not                                                                                              
checked how much that would cost, but has                                                                                       
looked at other states that use this                                                                                            
system.  He indicated that it is very                                                                                           
complicated.                                                                                                                    
1857                                                                                                                            
MR. PERSILY                                                                                                                     
Replied that the Department has looked                                                                                          
into a multiple scenarios, and that the                                                                                         
MPB's have generated an additional $1.1                                                                                         
million dollars for charities last year.                                                                                        
1887                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Commented that his office had received                                                                                          
many complaints that the larger operators                                                                                       
are taking over the smaller ones.  He                                                                                           
voiced concern regarding this matter.                                                                                           
1916                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Commented on the idea of a State lottery.                                                                                       
1935                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Responded that would not be enough money                                                                                        
to address the State's needs.  That                                                                                             
action would generated more closely to                                                                                          
the $30-$40 million dollars.                                                                                                    
1957                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Noted that the Treasury Division helps                                                                                          
raise money for the infrastructure.  The                                                                                        
Treasury customers are all Alaskans,                                                                                            
through the state political subdivisions                                                                                        
of the PERS and TERS and other political                                                                                        
subdivision that use the bond bank                                                                                              
authority.  The Division has about $19                                                                                          
billion dollars and manages $17 billion                                                                                         
dollars directly and $2 billion through                                                                                         
the State compensation division.  He                                                                                            
addressed the various boards in that                                                                                            
area.  The commissioner is responsible                                                                                          
for 17 separate reserve funds.  All these                                                                                       
funds are managed against a benchmark.                                                                                          
He indicated that the retirement fund had                                                                                       
a benchmark return for 1999 of 10.2%.                                                                                           
The target of the CBRF was 3.55%.  Public                                                                                       
school trust fund and the children's                                                                                            
trust are established with a target of                                                                                          
12.8%.                                                                                                                          
2119                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Concluded that summary addressed the                                                                                            
investment goals and asset allocation                                                                                           
policies.                                                                                                                       
2130                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Asked if there was anything that the                                                                                            
Legislature could do to change the rate                                                                                         
of return on the CBR.                                                                                                           
2145                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Stated that he would not recommend that                                                                                         
if the State might need to access it over                                                                                       
the next five years.  It is currently                                                                                           
placed into 100% fixed income activity at                                                                                       
this time.                                                                                                                      
2165                                                                                                                            
COMMISSIONER CONDON                                                                                                             
It is managed against the Merrill Lynch                                                                                         
1.5-year income.  The CBR fund is                                                                                               
allocated between two pools, treasury                                                                                           
notes and bonds.  The return last year to                                                                                       
that fund was 3.55%.  The target was                                                                                            
4.66%.  The Department did not meet the                                                                                         
targeted fund.  That was the net return.                                                                                        
2253                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Voiced concern with such a low-income                                                                                           
return on that account.  He asked if                                                                                            
there was something the Department could                                                                                        
undertake to improve the performance.                                                                                           
2276                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Stated that it could be invested more                                                                                           
aggressively but that would not be                                                                                              
appropriate or logical if it is assumed                                                                                         
that fund will need to be used within the                                                                                       
next five years.                                                                                                                
2295                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Spoke to Child Support.  He noted that                                                                                          
the customers are the 50,000 children who                                                                                       
are covered by a child support order and                                                                                        
the parents of that child.  He stressed                                                                                         
that it is the job of the Department to                                                                                         
do a good job in collecting that money.                                                                                         
2334                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Spoke to the satisfaction of those paying                                                                                       
into that account.                                                                                                              
2343                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Explained that last year, there was much                                                                                        
stress on the performance measures.                                                                                             
                                                                                                                                
TAPE HFC 00 - 9                                                                                                                 
SIDE 2                                                                                                                          
                                                                                                                                
000                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Stated that in FY99, $45 million dollars                                                                                        
was collected, which was approximately +                                                                                        
of the amount ordered.                                                                                                          
087                                                                                                                             
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Asked the benchmark percentage for that                                                                                         
Division.                                                                                                                       
101                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Answered that 46.2% was collected.  He                                                                                          
acknowledged that the target would                                                                                              
improve this year.                                                                                                              
137                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Applauded the Department, noting that the                                                                                       
important point is to establish a                                                                                               
benchmark.                                                                                                                      
164                                                                                                                             
VICE CHAIR BUNDE                                                                                                                
Interjected that the target should be                                                                                           
100%.                                                                                                                           
179                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Acknowledged that this is just where the                                                                                        
State is at this time.  Arrearage                                                                                               
information, which has been collected, is                                                                                       
not yet available.  The money repaid to                                                                                         
the federal government was 30.6%.                                                                                               
Commissioner Condon addressed the                                                                                               
proportion of cases billed which are                                                                                            
current.                                                                                                                        
308                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Spoke to child support.  He noted that                                                                                          
the entire year was spent trying to get                                                                                         
on the new computer system.  It has been                                                                                        
a several year process getting into that                                                                                        
new system.  He warned that the                                                                                                 
switchover had consumed all of FY99.  DOR                                                                                       
now has been certified by the feds and                                                                                          
Alaska is one of thirteen states that                                                                                           
have been certified.  He noted that work                                                                                        
has placed the State behind in other                                                                                            
certain responsibilities and that many                                                                                          
people have been affected by the                                                                                                
conversion.                                                                                                                     
448                                                                                                                             
VICE CHAIR BUNDE                                                                                                                
Spoke to the backlog of arrearages for                                                                                          
CSED.  He inquired if the Department                                                                                            
intended to write some of these off as                                                                                          
uncollectable.                                                                                                                  
522                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Stated that if the case is closed the                                                                                           
balance can be written off.  One of the                                                                                         
reasons that the arrears are so high is                                                                                         
that if the information is not supplied,                                                                                        
which sometimes it is not or is so                                                                                              
complicated that the common person can                                                                                          
not read or understand was is needed.                                                                                           
Many times the situation has been                                                                                               
ignored.  He acknowledged that the work                                                                                         
must be prioritized and that the top of                                                                                         
the list relates to actions that can pay                                                                                        
people at present.                                                                                                              
676                                                                                                                             
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Noted that both the State and the feds                                                                                          
have provided extra tools to help the                                                                                           
work of the Division identify those                                                                                             
people that can be helped.                                                                                                      
716                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Permanent Fund Division (PFD) consists of                                                                                       
600,000 customers.                                                                                                              
767                                                                                                                             
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Asked if there was a protocol in which                                                                                          
PFD money was retained.                                                                                                         
793                                                                                                                             
MR. PERSILY                                                                                                                     
He replied that child support had the 1st                                                                                       
position - 100% could be taken for that                                                                                         
concern.                                                                                                                        
Private collectors - 80% can be garnished                                                                                       
for this concern.                                                                                                               
IRS - small amount of garnishes                                                                                                 
Student loans - 100% can be garnished.                                                                                          
879                                                                                                                             
REPRESENTATIVE                                                                                                                  
WILLIAMS                                                                                                                        
Addressed the PFD dividend calculation.                                                                                         
He asked how the Department would like to                                                                                       
see that calculation made.                                                                                                      
940                                                                                                                             
COMMISSIONER CONDON                                                                                                             
Spoke to the calculation system used to                                                                                         
determine the dividend.  To manage the                                                                                          
volatility of that account, market                                                                                              
distribution is used. Currently, that                                                                                           
system is okay.  He observed that if                                                                                            
business continues as it is, the State                                                                                          
will need to use the PFD sometime within                                                                                        
the future to make public services                                                                                              
available.                                                                                                                      
1040                                                                                                                            
REPRESENTATIVE                                                                                                                  
WILLIAMS                                                                                                                        
Suggested that it might be a more stable                                                                                        
atmosphere to calculate dividends.                                                                                              
1063                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Replied that over the long term, it would                                                                                       
be the same.  Someday there is going to                                                                                         
be volatility.                                                                                                                  
1089                                                                                                                            
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Asked if Senator Mackies proposal had                                                                                           
been reviewed yet.                                                                                                              
1108                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Stated that plan has not yet been                                                                                               
reviewed.                                                                                                                       
1119                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Asked about the alignment of the various                                                                                        
boards, in specific the Alcohol Beverage                                                                                        
Control Board (ABC).                                                                                                            
1148                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Agreed that entity was the board least                                                                                          
appropriate within the Department of                                                                                            
Revenue.                                                                                                                        
1173                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Inquired the percentage of federal                                                                                              
funding of the Department of Revenue.                                                                                           
1186                                                                                                                            
COMMISSIONER CONDON                                                                                                             
Could not answer that however, thought                                                                                          
that without including AHFC, probably                                                                                           
about + of the budget is federally                                                                                              
funded.                                                                                                                         
                                                                                                                                
                                                                                                                                
DEPARTMENT OF HEALTH AND SOCIAL SERICES                                                                                         
1244                                                                                                                            
KAREN PERDUE,                                                                                                                   
COMMISSIONER,                                                                                                                   
DEPARTMENT OF HEALTH                                                                                                            
AND SOCIAL SERVICES                                                                                                             
Commissioner Perdue focused on the                                                                                              
outcome and key performance measures of                                                                                         
the Department.  She provided a thumbnail                                                                                       
shot of accomplishments of the                                                                                                  
Department.                                                                                                                     
*KidCare expanded health care coverage to                                                                                       
uninsured children and pregnant women                                                                                           
making infant mortality is down;                                                                                                
*Improved the response t reports of child                                                                                       
abuse and neglect;                                                                                                              
*Completed first full year of operation                                                                                         
of Family Services Training Academy;                                                                                            
*Increased training for child protection                                                                                        
workers;                                                                                                                        
*Launched statewide "Foster a Future"                                                                                           
foster care recruitment campaign;                                                                                               
*Provided services to additional 169                                                                                            
consumers who had been on the                                                                                                   
developmental disabilities waitlist for                                                                                         
services;                                                                                                                       
*Reduced overcrowding in juvenile                                                                                               
detention and treatment facilities by                                                                                           
opening a new 22-bed treatment unit                                                                                             
addition to the existing Johnson Youth                                                                                          
Facility in Juneau and adding 20 new                                                                                            
detention beds at McLaughlin Youth Center                                                                                       
in Anchorage;                                                                                                                   
*Implemented an aggressive immunization                                                                                         
campaign at the State and local level;                                                                                          
*Reduced Temporary Assistance caseload to                                                                                       
8,721 families;                                                                                                                 
*Reduced expenditures for Temporary                                                                                             
Assistance payments from $90.9 million                                                                                          
dollars in FY98 to $74.3 million dollars                                                                                        
in FY99;                                                                                                                        
*Initiated a successful program to assure                                                                                       
that all "mission-critical" systems were                                                                                        
Y2K compliant;                                                                                                                  
*Expanded State's response to fetal                                                                                             
alcohol syndrome by conducting more than                                                                                        
200 medical chart reviews as part of FAS                                                                                        
Surveillance Project.                                                                                                           
1407                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
She reiterated that there are still a                                                                                           
number of areas for concern and that                                                                                            
child mortality is high in the State.                                                                                           
1463                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Department's mission is "to promote and                                                                                         
protect the health and well-being of                                                                                            
Alaskan Citizens."                                                                                                              
1513                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Reviewed the key performance measures. In                                                                                       
the juvenile justice mission, 86 percent                                                                                        
of restitution was collected and 95                                                                                             
percent of the community work service                                                                                           
hours were completed.                                                                                                           
1566                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Added that the Department doubled the                                                                                           
number of youth courts.                                                                                                         
1592                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Pointed out that the crime rate is coming                                                                                       
down and that misdemeanors are way down.                                                                                        
1611                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
There has been a stabilization of the                                                                                           
daily census, with only a 30%                                                                                                   
overcrowdedness.  She noted that beds                                                                                           
have been added in four locations.                                                                                              
1649                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Measurements pertain mostly to                                                                                                  
restoration.  He asked what is the                                                                                              
reciticism rate.                                                                                                                
1671                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Explained that was a performance measure                                                                                        
which the Department is working toward.                                                                                         
A baseline of 55% has been established to                                                                                       
respond to the offender.  That number                                                                                           
includes the amount of children that come                                                                                       
into the system for a full education                                                                                            
assessment.  She pointed out that there                                                                                         
are many levels of academic achievement.                                                                                        
1734                                                                                                                            
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Asked if the military family's youth                                                                                            
statistics had been taken into                                                                                                  
consideration.                                                                                                                  
1748                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
No not at this time, however, those kids                                                                                        
are referenced.                                                                                                                 
1761                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Pointed out that the probation system is                                                                                        
now accredited.                                                                                                                 
1789                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Advised that 90% of all calls are now                                                                                           
answered.  She addressed things that are                                                                                        
working well in the child protection                                                                                            
area, such as a pilot project to help                                                                                           
investigate priority III's in the Mat-Su.                                                                                       
She elaborated that now in that area,                                                                                           
every call is being answered.  This new                                                                                         
system is working.                                                                                                              
1848                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Asked how much money had been contracted                                                                                        
with through the other agency.                                                                                                  
1858                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Replied that this was expensive and                                                                                             
amounted to a $250 thousand dollar                                                                                              
project.                                                                                                                        
1873                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Reiterated the things that are going                                                                                            
well.  Every social worker is being                                                                                             
trained now at the University of Alaska                                                                                         
in Anchorage.                                                                                                                   
1920                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
In foster care, there are more children                                                                                         
needing care than before and that those                                                                                         
cases are now being moved more quickly.                                                                                         
1940                                                                                                                            
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Asked how the number of foster care has                                                                                         
been traced.                                                                                                                    
1959                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Advised that there has been a 32%                                                                                               
increase in the number of adoptions.  A                                                                                         
good percentage of the 600 children                                                                                             
needing placement has been addressed from                                                                                       
foster care to adoption.  She noted that                                                                                        
the subsidized adoption program has                                                                                             
really helped.  Most of these children                                                                                          
come with large needs, mostly medical                                                                                           
needs and the current system makes it                                                                                           
financially possible to adopt.                                                                                                  
2034                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Asked about the protocol and procedures                                                                                         
used in adopting a child and the problems                                                                                       
with previous records and abuse.                                                                                                
2065                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Noted that people can change.  She                                                                                              
acknowledged that this is a difficult                                                                                           
point of consideration.  Every state is                                                                                         
struggling with these concerns.  Each                                                                                           
adoption goes through a very complete                                                                                           
home study and that each case is                                                                                                
addressed on an individual basis.                                                                                               
2123                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Encouraged that the side of safety always                                                                                       
be followed.                                                                                                                    
2139                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Continued the conversation regarding the                                                                                        
adoptive process and the anguish involved                                                                                       
in that decision.                                                                                                               
2165                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Stated that there is no greater duty than                                                                                       
being responsible for the children in                                                                                           
foster care.  In reference to past                                                                                              
history concerns, Commissioner Perdue                                                                                           
pointed out that there are well meaning                                                                                         
people who experience that in which "life                                                                                       
happens".                                                                                                                       
2191                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Addressed the legitimate cries of harm.                                                                                         
He asked if it is true that foster homes                                                                                        
standards are sometimes lowered in order                                                                                        
to accommodate all the children in need.                                                                                        
2222                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Acknowledged that the State is desperate.                                                                                       
Sometimes the placement is questionable.                                                                                        
She added that the Department was working                                                                                       
with Rep. Dyson on Foster Care criteria                                                                                         
so that the good foster parents are not                                                                                         
lost through the cracks.                                                                                                        
2259                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Pointed out that the State would ideally                                                                                        
like to have people that do not have                                                                                            
problems with substance abuse.                                                                                                  
2275                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Stated that there are waivers.  There is                                                                                        
a standard and the Department tries to be                                                                                       
flexible within that so as to place all                                                                                         
children.                                                                                                                       
2299                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Spoke to workers safety.  She noted that                                                                                        
this is a growing issue for Department of                                                                                       
Health and Social Services workers.  She                                                                                        
listed the numerous threats which the                                                                                           
division workers have received.  She                                                                                            
noted that many social workers visits are                                                                                       
done alone.                                                                                                                     
                                                                                                                                
TAPE HFC 00 - 10                                                                                                                
SIDE 1                                                                                                                          
                                                                                                                                
000                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Spoke to the transcription services.                                                                                            
043                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Vacancy rates are down from training and                                                                                        
extra help.                                                                                                                     
067                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Spoke to the immunization program,                                                                                              
pointing out that there has been success                                                                                        
in lowering the States position for                                                                                             
outbreaks.                                                                                                                      
143                                                                                                                             
VICE CHAIR BUNDE                                                                                                                
Pointed out that there is a growing                                                                                             
resistance to having children immunized.                                                                                        
He asked for comments regarding that                                                                                            
concern.                                                                                                                        
197                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Stated that was not a new concern.  The                                                                                         
State immunologists recommend that all                                                                                          
kids should be given the innoculation.                                                                                          
The resistance is sure to continue, as                                                                                          
the State is proposing more vaccinations.                                                                                       
294                                                                                                                             
VICE CHAIR BUNDE                                                                                                                
Expressed that this is a growing concern,                                                                                       
as people become more informed regarding                                                                                        
the health of their child.                                                                                                      
336                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Interjected that largest measles outbreak                                                                                       
occurring in the nation was in Anchorage                                                                                        
brought in by a little boy from Japan.                                                                                          
377                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Spoke to the Denali Kid Care.  That                                                                                             
program consumes a moderate amount of                                                                                           
dental use, but there has not been a drop                                                                                       
in personal insurance.  The cost per                                                                                            
child has been between $600-$700 dollars                                                                                        
per year.  This is a large pool coverage                                                                                        
and that the Indian Health Service covers                                                                                       
all Native children.                                                                                                            
471                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Asked how many children participate in                                                                                          
that program.                                                                                                                   
488                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Replied 12,000                                                                                                                  
496                                                                                                                             
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Asked who provides the initial referral.                                                                                        
509                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Explained that it was provided by                                                                                               
insurance.  There are no systems that                                                                                           
must be used.                                                                                                                   
527                                                                                                                             
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Questioned if all dentists were required                                                                                        
to accept these children as patients.                                                                                           
550                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Responded that there has been some                                                                                              
problems and that the issue of access                                                                                           
must be watched.                                                                                                                
577                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
In response to Representative J. Davies                                                                                         
query, she noted that program was 75%                                                                                           
federally funded.                                                                                                               
602                                                                                                                             
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Suggested that the premium was high for a                                                                                       
child.                                                                                                                          
625                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
She replied that was the yearly cost of                                                                                         
$600 dollars not the monthly cost.                                                                                              
650                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Reiterated that it was high.                                                                                                    
661                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Explained that these are not premiums,                                                                                          
but are the actual costs of the service.                                                                                        
705                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Asked if the cost was lower because the                                                                                         
Native population was serviced by the                                                                                           
Native hospital.  He asked how big the                                                                                          
total appropriation is per child.                                                                                               
753                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Responded that the federal government                                                                                           
covers the full cost.  The Health Aid                                                                                           
system provides much of the work.                                                                                               
778                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Asked if that money passed through the                                                                                          
general fund.                                                                                                                   
790                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Explained that Medicaid dollars do pass                                                                                         
through the general fund.  If the unit                                                                                          
costs covers all beneficiaries, the                                                                                             
federal contribution triples.                                                                                                   
860                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
What is the total amount spent for kids                                                                                         
health.                                                                                                                         
875                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Replied around $50 million dollars.                                                                                             
887                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Suggested that was a high amount for                                                                                            
payment for kids only.                                                                                                          
904                                                                                                                             
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Asked how it compared to insurance costs.                                                                                       
935                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Noted that the active versus the retirees                                                                                       
system is different.                                                                                                            
957                                                                                                                             
COMMISSIONER PERDUE                                                                                                             
Spoke to the youth smoking rate, which                                                                                          
has been reduced by 10%.  She commented                                                                                         
that this is an area to determine if the                                                                                        
performance measure is what is expected.                                                                                        
In the sample of preliminary data, there                                                                                        
is a decline in the area of middle school                                                                                       
kids smoking.                                                                                                                   
1017                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
By excluding Anchorage, then smokeless                                                                                          
tobacco is excluded.                                                                                                            
1051                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Agreed.  The data will be available in a                                                                                        
couple of months.                                                                                                               
1072                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Addressed efforts made by the anti-                                                                                             
smoking groups.  He recommended that                                                                                            
could be big assets to the Department.                                                                                          
1096                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Pointed out that Anchorage is about to                                                                                          
survey for data.  At this time, it is a                                                                                         
mess.                                                                                                                           
1117                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Spoke to decreasing the publicly funded                                                                                         
hospital rates.  She noted that                                                                                                 
downsizing has been successful.  The                                                                                            
length of stay at API has decreased but                                                                                         
the facility is more used more often than                                                                                       
before.                                                                                                                         
1196                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Voiced concern that the long-term need is                                                                                       
not being met.  He asked if there are                                                                                           
measures to come before the Committee                                                                                           
addressing that concern.                                                                                                        
1215                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Referenced the comprehensive mental                                                                                             
health plan.  There has been a great                                                                                            
amount of work done on outcoming                                                                                                
measures.                                                                                                                       
1247                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Asked how that would information would                                                                                          
include various boards in order to be                                                                                           
able to utilize that information and                                                                                            
experience.                                                                                                                     
1275                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Agreed that information should be                                                                                               
included.  Some agencies have spent                                                                                             
tremendous time and money in surveying                                                                                          
conditions throughout the State.                                                                                                
1306                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Recommended that perhaps on the                                                                                                 
Subcommittee level that consideration                                                                                           
could be made.                                                                                                                  
1331                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Stated that the Mental Health Trust                                                                                             
Authority has helped tremendously.                                                                                              
1327                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Spoke to the per capita consumption                                                                                             
concern and that the trend is moving                                                                                            
downward.  She noted that there is good                                                                                         
outcome information available on                                                                                                
treatment.  She addressed outpatient                                                                                            
success rate.                                                                                                                   
1425                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Asked about the consumption per capita.                                                                                         
1450                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Stated that she did not know.                                                                                                   
1456                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Spoke to alcohol consumption and the                                                                                            
effects on the youth.  He stated that it                                                                                        
is a challenge.                                                                                                                 
1500                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Stated that the alcohol problem in Alaska                                                                                       
is a huge issue, however, public dollars                                                                                        
has made a dramatic difference in the                                                                                           
State's problems.                                                                                                               
1535                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Voiced concern with the effectiveness of                                                                                        
funding the alcohol control issues in the                                                                                       
schools.  He asked if there are                                                                                                 
alternatives that should be looked at.                                                                                          
1571                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Responded that the Department is tracking                                                                                       
what it is getting.  She acknowledged                                                                                           
that there is a lot of tension with how                                                                                         
those resources are being spent.  She                                                                                           
addressed the various arguments being                                                                                           
discussed within the State and the                                                                                              
Criminal Justice group.  The tension                                                                                            
exists because there is not enough money                                                                                        
to go around.                                                                                                                   
1665                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Spoke to the Title 47 usage which is                                                                                            
declining as communities begin addressing                                                                                       
more appropriately where individuals                                                                                            
should be placed.  She commented on                                                                                             
various programs which address basic life                                                                                       
skills.                                                                                                                         
1704                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Asked the recidivism rate and the length                                                                                        
of time associated with it.                                                                                                     
1724                                                                                                                            
PAM WATTS, EXECUTIVE                                                                                                            
DIRECTOR, GOVERNORS                                                                                                             
ADVISORY BOARD ON                                                                                                               
ALCOHOL AND DRUG                                                                                                                
ABUSE                                                                                                                           
Spoke to the amount of time involved in                                                                                         
the recidivism findings.                                                                                                        
1753                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Spoke to the consumption population                                                                                             
problems.                                                                                                                       
1784                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Briefly addressed Public Assistance.  She                                                                                       
noted that it has been beneficial                                                                                               
providing the electronic benefit cards.                                                                                         
1875                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Spoke to the tracking medical assistance,                                                                                       
which tracks to make sure what, is                                                                                              
occurring with the benchmark services.                                                                                          
1902                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Noted that the legislature is looking for                                                                                       
a task force to look at benefits for the                                                                                        
statewide system.                                                                                                               
1925                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Was not aware of that.                                                                                                          
1930                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Voiced concern with the area of extended                                                                                        
care and the cost associated with that.                                                                                         
1947                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Spoke to the Nursing Care Program.  She                                                                                         
stated that Medicare does not cover long-                                                                                       
term care and that Medicaid ends up                                                                                             
paying the full load for many people.                                                                                           
1989                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Asked if this was a statewide issue.                                                                                            
1997                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Replied that Anchorage is one place where                                                                                       
there are not a lot of facilities.  The                                                                                         
size of most nursing homes is under 16                                                                                          
beds.  This is a concern which the                                                                                              
Department has struggled with.                                                                                                  
2036                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Voiced concern with what will happen in                                                                                         
the next 15 years.                                                                                                              
2046                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Pointed out that in order to be eligible                                                                                        
to participate in Medicaid, there are                                                                                           
certain eligibility requirements.  He                                                                                           
warned of the spiraling costs of health                                                                                         
care.                                                                                                                           
2082                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Discussed the Medicaid budget on the                                                                                            
federal level.  He asked if the State                                                                                           
will need to change the mind-set and life                                                                                       
styles.  He emphasized that this is a big                                                                                       
problem.                                                                                                                        
2125                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Stressed that the Department is trying to                                                                                       
support community alternatives.                                                                                                 
2137                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Noted that the Department is aware of the                                                                                       
issue of the aging population and the                                                                                           
heavy-duty medical costs associated with                                                                                        
those concerns.  She applauded the                                                                                              
Pioneer Homes throughout the State which                                                                                        
allow people to stay in their own                                                                                               
communities.                                                                                                                    
2175                                                                                                                            
COMMISSIONER PERDUE                                                                                                             
Medicaid does not cover the alzihmiers                                                                                          
condition.  She concluded that a pension                                                                                        
could make a person ineligible for                                                                                              
Medicaid.                                                                                                                       
2198                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
ADJOURNMENT                                                                                                                     
                                                                                                                                
The meeting adjourned at 3:55 P.M.                                                                                              
                                                                                                                                
                                                                                                                                
HOUSE FINANCE COMMITTEE                                                                                                         
LOG NOTES                                                                                                                       
January 18, 2000                                                                                                                
                                                                                                                                
                                                                                                                                
H.F.C.     16     1/18/00                                                                                                       
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects