Legislature(2001 - 2002)
01/15/2001 01:47 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 15, 2001
1:47 PM
TAPE HFC 01 - 7, Side A
TAPE HFC 01 - 7, Side B
TAPE HFC 01 - 8, Side A
CALL TO ORDER
Co-Chair Mulder called the House Finance Committee meeting
to order at 1:47 PM.
MEMBERS PRESENT
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative Carl Moses
Representative Richard Foster
Representative John Harris
Representative Bill Hudson
Representative Ken Lancaster
Representative Jim Whitaker
MEMBERS ABSENT
Representative Eldon Mulder, Co-Chair
Representative Bill Williams, Co-Chair
ALSO PRESENT
Representative Gretchen Guess; Representative Craft,
Representative Stevens; Representative Kevin Meyer; Yvonne
Chase, Deputy Commissioner, Early Education, Department of
Education and Early Development: Bruce Johnson, Deputy
Commissioner, Department of Education and Early Development;
Shirley Holloway, Commissioner, Department of Education and
Early Development; Dan Fauske, Executive Director, Alaska
Housing Finance Corporation, Department of Revenue; John
Bitney, Legislative Liaison, Alaska Housing Finance
Corporation, Department of Revenue; Les Campbell, Director,
Budget, Alaska Housing Finance Corporation (AHFC).
PRESENT VIA TELECONFERENCE
There were no teleconference participants.
GENERAL SUBJECT (S):
Review of Departments Accomplishments
Department of Education and Early Development
Alaska Housing Finance Corporation (AHFC)
The following overview was taken in log note format. Tapes
and handouts will be on file with the House Finance
Committee through the 22nd Legislative Session, contact 465-
2156. After the 22nd Legislative Session they will be
available through the Legislative Library at 465-3808.
LOG SPEAKER DISCUSSION
TAPE HFC 00 - 7
SIDE A
099 SHIRLEY HOLLOWAY, Introduced staff. Provided members with a
COMMISSIONER, handout on the missions and measures of
DEPARTMENT OF the Department of Education and Early
EDUCATION AND EARLY Development (copy on file). Complemented
DEVELOPMENT the Committee for the movement to the
performance approach. Noted that the
department has moved toward standards to
assess staff and students. Stressed the
benefit of combining early development
with education.
287 Commissioner Reviewed measures developed in SB 281.
Holloway Explained that the focus is on early
development and student performance.
382 Commissioner Highlighted performance in FY 01. Noted
Holloway that the department implemented the
benchmark assessment, regulation for
comprehensive assessment, an education
summit, streamlined licensing, and
finalized SB 36 report.
535 YVONNE CHASE, DEPUTY Discussed measure relating to Early
COMMISSIONER, EARLY Education. Review page 35.
EDUCATION,
DEPARTMENT OF
EDUCATION AND EARLY
DEVELOPMENT
712 Co-Chair Mulder Noted that licensing center came on line
in Anchorage in 1999. He noted that the
department asked for additional funding
with the transfer of the early education
function. Part of the increase was
funded. There has been success in
increasing childcare facilities across
the state.
834 Co-Chair Mulder Explained the difference between a
childcare home, group home and center.
865 Representative Croft Asked for clarification on the difference
between 1998 and 1999 levels. Ms. Chase
explained that not all the centers were
not in the database. Co-Chair Mulder
noted that number of licensed homes
appears to have dropped between 1997 and
1998.
957 Ms. Chase Noted that there is no incentive for
homes to license. They have moved toward
self-registration, which does not require
a home review.
1019 Co-Chair Mulder Questioned if reporting has changed. Ms.
Chase did not think there was a
significant change in reporting.
Reiterated that providers do not have an
incentive to license.
1071 Representative Croft Observed that the downward shift in
licensing homes is the result of fewer
homes licensing and more registrations.
1125 Ms. Chase Stated that registration serves a purpose
but that there is no way to enforce
standards in registered homes.
1157 Representative Asked for delineation by region.
Lancaster
1173 Representative Questioned if registered homes have to
Hudson meet basic requirements. Ms. Chase stated
that in theory they have to meet basic
health and safety, but emphasized that
there is no inspections; complaints are
responded to.
1236 Co-Chair Mulder Referred to measurements for the Division
of Early Development. Ms. Chase clarified
that the measure in section 59 of SB 291
measures the capacity of the facilities.
The capacity has not increased greatly.
1340 Representative Croft Questioned if the quality is measured
through the quantity. Co-Chair Mulder
stressed that the assumption is that
licensing enforces quality.
1427 Representative Croft Stressed the need to assess how many
children are being harmed in childcare.
1447 Vice-Chair Bunde Emphasized that the number is needed.
1546 Ms. Chase The cost for licensed and registered
facilities is close. Some states
establish a volunteered starring system
to allow parents to have a sense of what
they are choosing.
1506 Ms. Chase Explained in response to a question by
Representative Lancaster, that the State
created legally exempt as a federal
requirement.
1538 Representative Questioned if it is too soon to tell what
Harris the current numbers are.
1576 Co-Chair Mulder Stressed the need to have the numbers to
refine the measurements. Ms. Chase
pointed out that the department does not
have a direct knowledge of number of
licensed facilities and children in
licensed care.
1625 Co-Chair Mulder Reviewed the number of children in Head
Start. The intent is to increase by 2
percent.
1711 Representative Questioned where extra money should be
Hudson spent
1733 Ms. Chase Responded that money should be spent on
adding programs. The majority of the
programs would be in small communities.
1771 Ms. Chase Reviewed the measure of staff in
childcare facilities. She noted that the
data will be collected on a statewide
basis and would be available in the
future.
1795 Ms. Chase Observed that 57 percent of the eligible
population is served in the federal food
program. There are only 8 school
districts that do not participate. There
are about 56,000 students being served.
1866 BRUCE JOHNSON, Outlined the key measures for teaching
DEPUTY COMMISSIONER, and learning support, reviewed page 7. He
EDUCATION, discussed benchmark assessments. He
DEPARTMENT OF observed that proficient and advance
EDUCATION AND EARLY students are often lumped together.
DEVELOPMENT
1980 Representative Questioned why the math proficiency drops
th
Harris between 6 and 8 grades. Mr. Johnson
could not identify the factors.
2051 Representative Asked if the numbers reflect statewide
Hudson trends. Mr. Johnson confirmed that the
numbers are for the entire state. The
department's web site will have each
district delineated.
2084 Representative Croft Clarified that the categories are
appropriate to the grade level. He
observed that it is the advanced level
students that fall off.
2113 Mr. Johnson Speculated that the drop is spread across
the whole curriculum.
2160 Vice-Chair Bunde Noted that young children enjoy school
more than older children.
2193 Representative John Agreed that there is a complicated
Davies tapestry of societal factors. He noted
that it is possible that the bar is too
high.
2225 Mr. Johnson Stated that the department is comfortable
with the exam and the passing score, but
that they are assessing the reaction to
the passing score.
2259 Mr. Johnson Responded to a question by Representative
Whitaker regarding math standards.
2357 Vice-Chair Bunde Noted that members of the community
established the standards.
TAPE HFC 01 - 7,
Side B
12 Mr. Johnson Discussed page 9. He noted that the
California Achievement Test 5 (CAT 5) was
moved from grade 8 to 7, since the
benchmark test is given in grades 4 and
8.
121 Representative Croft Observed that results are consistent from
grades 4 to 7, but they fall off in the
8th grade benchmark.
207 Mr. Johnson Noted that this will be the subject of an
education discussion.
234 Representative Croft Questioned if the national standards also
thth
fall off between 7 and 8 grades. Mr.
Johnson could not answer the question. He
noted that the CAT 5 test does not drive
the Alaska benchmark test.
rd
363 Co-Chair Mulder Observed that the Alaska benchmark in 3
th
grade and the 4 grade CAT 5 tests are
consistent.
400 Representative Asked if the expectations nationally are
Lancaster different from the state standard. Mr.
Johnson responded that the Alaskan
standards are unique.
486 Representative Questioned if there were unified
Hudson standards in Alaska previously. Mr.
Johnson observed that standards vary by
school district, school and classroom.
The current approach is to standardize
expectations.
563 Representative Expressed concern that a normal social
Whitaker phenomenon is not being reflected.
650 Mr. Johnson Acknowledged that it is an interesting
thought. Standards try to establish what
th
an 8 grader should have in order to be
prepared for high school.
745 Mr. Johnson The cost per student in meeting the
measures.
820 Mr. Johnson Spoke to the number of dropouts. Some
students are reclassified at their grade
level. He noted that 79% of the current
Junior class has met the expectation of
the standardized test.
906 Mr. Johnson Addressed the benchmark assessments. Not
speaking of students failing out of high
school at this time. Examinations are
designed for those students leaving high
school.
949 Representative Asked about the measure of determining
Harris the true percentage of those kids that
will really graduate.
984 Mr. Johnson Suggested those students that graduate in
year 2002 will be the ones that determine
the number.
1022 Mr. Johnson In response to Vice-Chair Bunde, agreed
that semantics are important. They do
not want the student to take the test in
their sophomore year. They could fall
short.
1060 Co-Chair Mulder Asked if the student could re-take the
test in the fall after failing it in the
previous spring.
1093 Mr. Johnson Replied that the student has six
opportunities to take the test. Taking
the test if voluntary. There is no state
law, which declares when the test must be
taken.
1154 Co-Chair Mulder Where do the private school students take
it?
1165 Mr. Johnson There is no requirement for a private
school student to take the test. The law
requires that in a public school, the
test be given every year.
1223 Representative Asked about home schooling.
Hudson
1232 Mr. Johnson Students receiving public funds would be
required to take the test.
1250 Representative Asked if once the test is passed, would
Whitaker the child ever have to take the test
again.
1270 Mr. Johnson Replied that once taken, it is not taken
again if the student passes it. The test
is costly to administer.
1294 Representative Croft Asked about the national average scores
in math, which shows that Alaskans are
above average.
1325 Mr. Johnson Stated that the standards need to be
continually analyzed and made better.
The statistics nationally show that some
students excel in certain areas and fail
others. He referenced Arizona and noted
that legislators are now conducting
hearings. Standards could be abandoned.
1406 Commissioner Stated that the Department is preparing a
Holloway list that indicates each state and the
standards that they recommend. Some
states have scraped the standards.
1465 Mr. Johnson Concluded his remarks and performance
measures.
1498 REPRESENTATIVE Asked about the costs associated with the
STEVENS testing.
1516 Mr. Johnson Replied that each district covers the
local district costs. The Department
only pays some of the costs.
1577 Representative Asked if additional staff had been added
Hudson to the Department to execute the program.
1592 Mr. Johnson Replied that there are 2 full time staff
working on the program. Have attempted
to do the work through the technical
review committee.
1620 Representative Referred to federal standards and noted
Hudson that the federal government is investing
in state standards.
1706 Vice-Chair Bunde Spoke in support of standards as a way of
evaluating how money is being spent.
Recounted funds spent on education and
stressed that without standards spending
would continue to increase indefinitely.
1771 Co-Chair Mulder Spoke in support of continuing standards
1784 Representative John Acknowledged the good of standards but
Davies expressed concern that they create a high
stakes approach that will result in
insurmountable barriers for some
children.
1838 Commissioner Concluded that the state Board of
Holloway Education is eager to work for solutions
to special needs children, English as a
second language and children of military
families.
1874 Co-Chair Mulder Stated that the committee would like an
overview of the foundation formula.
1905 ALASKA HOUSING FINANCE CORPORATION (AHFC)
1930 Dan Fauske, Introduced staff. Provided members with a
Executive Director, booklet, AHFC Draft FY2002 Budget (copy
Alaska Housing on file).
Finance Corporation,
Department of
Revenue
2049 Mr. Fauske Reviewed the performance measures on page
22. Noted that 5.82 percent of the money
generated is used for administrative
response. The federal receipts and
interagency receipts have increased
resulting in a small increase in the
administrative cost.
2122 Mr. Fauske Reviewed the second performance of
maintaining net income. He reviewed
changes since 1998. One major change is
the use of market value. There has been
an increase from FY 99.
2206 Mr. Fauske Discussed the percentage of AHFC owned
housing per privately owned housing.
There has been a significant increase
over FY 99, from 33 to 43 percent.
Activities have been increased through
arbitrage.
2265 Vice-Chair Bunde Observed that AHFC focuses on people that
might not qualify for other programs. He
questioned if the increase in AHFC
activity is a reflection of Alaska's
economy.
2293 Mr. Fauske Responded that the amount of income has
decreased in some occupations such as
fishing. Interest rates affect the
ability to buy homes. Delinquency rates
are decreasing.
2333 Co-Chair Mulder Questioned if the assumption that AHFC
caters to low-income buyers is adequate.
2357 Mr. Fauske There were 28,000 loans in the portfolio.
He concluded that the number of loans has
broadened.
TAPE HFC 01 - 8,
Side A
24 LES CAMPBELL, Responded to a question by Co-Chair
DIRECTOR, BUDGET, Mulder.
ALASKA HOUSING
FINANCE CORPORATION
106 Vice-Chair Bunde Stressed that AHFC should not be
competing with private sector loans.
160 Mr. Fauske Clarified that AHFC is not in competition
with City Mortgage and other mortgage
companies.
252 Co-Chair Mulder Stressed that local banks only have a
small percentage of loans in the state.
287 Representative Croft Observed that an increase in the measure
could mean a downturn in the private
sector and questioned if the benchmark
needs to be changed.
396 Co-Chair Mulder Stressed that the mission is to be
profitable and to provide affordable
loans to a sector of the public that may
not be able to find them in other ways.
446 Representative Questioned if there is a downside to
Whitaker increasing the percentage of AHFC
housing. He did not think there was a
downside, but stated that he would review
the issue.
490 Representative Observed that realtors like AHFC because
Lancaster they pay a dividend.
549 Mr. Fauske Stressed that some analysis must be given
to the dividend. He noted that AHFC does
not participate in service relief.
th
659 Mr. Fauske Discussed the 4 performance measure:
High Performer of the Public Housing
Management Assessment Program (PHMAP)
score. This score has dropped some, but
he felt comfortable with the rating of
92.9 percent.
783 Representative Referred to page 23, number of rural
Hudson loans. He noted that the number has
dropped.
838 Mr. Fauske Responded that there has been some
disruption in the market relating to how
the money is coming into housing
authorities from the federal government.
901 Mr. Campbell Observed that the rural housing
authorities can make or combine loans
without going through AHFC.
941 Mr. Fauske There is some interaction with AHFC to
maximize dollars. Over a $100 million
federal dollars go into tribal
organizations for housing.
1017 Co-Chair Mulder Pointed out that the scope the same.
1045 Mr. Campbell Smaller, same in that they want to
provide safe affordable housing in their
local areas.
1061 Mr. Fauske Bonding mechanism to leverage money is a
potential to enhance and strengthen
dollars.
1098 Mr. Bitney Explained that some tribes collect the
block grant directly. This number is
growing.
1133 Co-Chair Mulder How much interaction with federal funding
to tribal organizations.
1160 Mr. Bitney Explained that there is not a great
amount of coordination. He observed that
there are only 2 housing authorities that
are certified to offer AHFC housing
loans.
1224 Vice-Chair Bunde Stressed that there are millions of
federal dollars coming to Alaska without
passing through the General Fund.
1287 Mr. Fauske Spoke to tobacco securitization. He noted
that the true interest cost was 6.5
percent and was the first of its type.
1374 Mr. Fauske Felt that the market place would accept
additional securitizations. He did not
think there was a federal movement to
prohibit or suspend the activity.
1537 Representative Stressed the need to have legal
Hudson foundation to the question of the federal
government's ability to affect the
process.
1561 Representative Croft Questioned where the risk fell.
1579 Mr. Fauske Explained that the risk was transferred
to the investor. The bonds will be paid
off by 2015. He observed that the average
bond payment is $18 to $20 million
dollars.
1715 Co-Chair Mulder Noted that only 40 percent was obligated.
1725 Representative Croft Summarized that in the event of total
default the state would still keep the
remaining amount.
1755 Vice-Chair Bunde Summarized that the ability of future
legislatures to use the money is
inhibited until 2015.
1792 Mr. Fauske Continued to discuss tobacco
securitization.
ADJOURNMENT The meeting was adjourned at 4:02 p.m.
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