Legislature(2003 - 2004)

01/31/2003 01:25 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   HOUSE FINANCE COMMITTEE                                                                                      
                       January 31, 2003                                                                                         
                           1:25 PM                                                                                              
                                                                                                                                
 TAPE HFC 03 - 6, Side A                                                                                                        
 TAPE HFC 03 - 6, Side B                                                                                                        
 TAPE HFC 03 - 7, Side A                                                                                                        
                                                                                                                                
 CALL TO ORDER                                                                                                                
                                                                                                                                
 Co-Chair Harris called  the House Finance  Committee meeting                                                                   
 to order at 1:25 PM.                                                                                                           
                                                                                                                                
 MEMBERS PRESENT                                                                                                              
                                                                                                                                
 Representative John Harris, Co-Chair                                                                                           
 Representative Bill Williams, Co-Chair                                                                                         
 Representative Eric Croft                                                                                                      
 Representative Richard Foster                                                                                                  
 Representative Mike Hawker                                                                                                     
 Representative Reggie Joule                                                                                                    
 Representative Carl Moses                                                                                                      
 Representative Gary Stevens                                                                                                    
 Representative Bill Stoltze                                                                                                    
 Representative Jim Whitaker                                                                                                    
                                                                                                                                
                                                                                                                                
 MEMBERS ABSENT                                                                                                               
                                                                                                                                
 Representative Kevin Meyer, Vice-Chair                                                                                         
                                                                                                                                
 ALSO PRESENT                                                                                                                 
                                                                                                                                
 Representative Cheryl  Heinz; Representative Ralph  Samuels;                                                                   
 Representative    Harry    Crawford;     Joel    Gilbertson,                                                                   
 Commissioner, Department  of Health  & Social Services;  Bob                                                                   
 Labbe, Deputy  Director,  Department  of Health  and  Social                                                                   
 Services; Janet Clarke, Director, Division of Administrative                                                                   
 Services, Department  of Health  and  Social Services;  Marc                                                                   
 Antrim, Commissioner, Department of Corrections;                                                                               
                                                                                                                                
 PRESENT VIA TELECONFERENCE                                                                                                   
                                                                                                                                
 There were no teleconference testifiers.                                                                                       
                                                                                                                                
 GENERAL SUBJECT(S):                                                                                                          
                                                                                                                                
 Agency Overviews:   Department of Health and Social Services                                                                   
                     Department of Corrections                                                                                  
                                                                                                                                
The following overview was taken in log note format.  Tapes                                                                     
and handouts will be on file with the House Finance                                                                             
Committee through the 23rd Legislative Session, contact 465-                                                                    
2156. After the 23rd Legislative Session they will be                                                                           
available through the Legislative Library at 465-3808.                                                                          
                                                                                                                              
                                                                                                                                
 LOG SPEAKER                DISCUSSION                                                                                      
                                                                                                                                
      TAPE HFC 03 - 6       DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                                        
      SIDE A                                                                                                                  
 000 JOEL       GILBERTSON, Introduced his staff. He reviewed the                                                               
      COMMISSIONER,         Department's   current    structure.   The                                                          
      DEPARTMENT  OF HEALTH department is undergoing  audits regarding                                                          
      & SOCIAL SERVICES     restructuring     recommendations.     The                                                          
                            department's  goals are to streamline  the                                                          
                            administrative process  and reduced costs,                                                          
                            hold  service declines to minimize  affect                                                          
                            on  clients,  maximize  federal  revenues,                                                          
                            and improve costumer service.                                                                     
 2210 Mr. Gilbertson        The    department    is   facing    budget                                                          
                            reductions.  The current budget  authority                                                          
                            is  1.4  billion  dollars:  $487  thousand                                                          
                            general  fund  dollars, and  $832  federal                                                          
                            receipts.  He noted  that there are  2,512                                                          
                            full   time   positions.   Observed   that                                                          
                            formula  programs  represent the  majority                                                          
                            of the department's budget.                                                                       
 2249 Mr. Gilbertson        Reviewed costs for facilities: $41                                                                  
                            million.  Most  of  these  costs  are  for                                                          
                            large  facilities,   such  as  the  Alaska                                                          
                            Psychiatric Institute.                                                                            
 2302 Mr. Gilbertson        Administrative costs are approximately                                                              
                            $11.5  million, which includes the  Office                                                          
                            of  the Commissioner  and the Division  of                                                          
                            Administrative Services.                                                                          
 2340 Mr. Gilbertson        Reviewed increases in costs for formula                                                             
                            programs.   In   1993,  formula   programs                                                          
                            accounted  for  61  percent  of  over  all                                                          
                            costs.  They  are  currently  70  percent,                                                          
                            which is a 142 percent  increase. He noted                                                          
                            that  grant programs have increased by  53                                                          
                            percent   and  program   services  by   96                                                          
                            percent.   Facility   and   administrative                                                          
                            costs have also increased.                                                                        
 2359 Mr. Gilbertson        Discussed general goals: Establish fiscal                                                           
                            stability  for   Division  of  Family  and                                                          
                            Youth   Services   programs   and   reduce                                                          
                            dependence  on general  fund dollars.  The                                                          
                            department   is   undergoing   review   of                                                          
                            business     processes    to     eliminate                                                          
                            inefficiency    and    redundancies    and                                                          
                            maximize federal revenues.                                                                        
 2511 Mr. Gilbertson        Discussed federal funding. The Governor,                                                            
                            while  serving  as  a Senator,  worked  to                                                          
                            adjust  the  federal   medical  assistance                                                          
                            percentages  that  determine the  relative                                                        
                            match  rate for  Medicare funding  (FMAP).                                                          
                            In  1997, this was raised from 50 to  59.8                                                          
                            percent,  which  brought  in  $30  million                                                          
                            additional federal dollars every year.                                                            
 2543 Mr. Gilbertson        Observed that the goal is to continue to                                                            
                            work   for  adjustments  at  the   federal                                                          
                            level.   The   Governor  has   taken   the                                                          
                            position  that   the  federal  formula  is                                                          
                            flawed.                                                                                           
 2645 Co-Chair Harris       Questioned if the FMAP percentage was                                                               
                            recently  included   in  an  appropriation                                                          
                            bill.                                                                                             
 2655 Mr. Gilbertson        Explained that the most recent adjustment                                                           
                            was  the in  the  Benefit Improvement  and                                                          
                            Protection  Act,  of  the  year  2000.  It                                                          
                            would sunset on October 2005.                                                                     
 2736 BOB   LABBE,   DEPUTY Clarified  that the  current FMAP rate  is                                                          
      DIRECTOR, DEPARTMENT 57 percent.                                                                                        
      OF HEALTH AND SOCIAL                                                                                                      
      SERVICES                                                                                                                  
 2745 Mr. Gilbertson        Explained that a determination was made                                                             
                            at the federal level  that the measurement                                                          
                            to    calculate    per    capita    income                                                          
                            contributions  was not accurate.  Employer                                                          
                            contributions    to    federal    employee                                                          
                            retirement  plans, which aren't  realized,                                                          
                            were included. This  caused the per capita                                                          
                            income  of  the   state  to  rise.  Alaska                                                          
                            received  the greatest  increase in  their                                                          
                            per  capita rate,  which resulted  in a  3                                                          
                            percent reduction.                                                                                
 2846 Mr. Gilbertson        Spoke to the Fair Share Program. There                                                              
                            was  denial of the state of Alaska's  Fair                                                          
                            Share   program's    financing   operation                                                          
                            between  the  state   and  native  private                                                          
                            hospitals  to maximize federal funds.  The                                                          
                            state  of  Alaska's projected  amount  was                                                          
                            $55   million.   These  funds   were   not                                                          
                            realized.                                                                                         
 3018 Mr. Gilbertson        Emphasized that the department feels that                                                           
                            Alaska's  plan is  compliant with  federal                                                          
                            regulations   and    stressed   that   the                                                          
                            department  is aggressively  pursuing  the                                                          
                            funding through the appeals process.                                                              
 3112 Mr. Labbe             Clarified that the hearing is in March                                                              
                            and  the decision  would be  in June.  The                                                          
                            state's  position   has  not  changed.  He                                                          
                            explained that the  issue seems to be that                                                          
                            the  [federal]   Administration  does  not                                                          
                            like  the  decision.  They  are  confident                                                          
                            that the state plan  is compliant and will                                                          
                                                                     th                                                         
                            be  upheld at  the court level  by the  9                                                           
                            circuit court of appeals.                                                                         
 3322 Mr. Gilbertson        The fair share language was designed to                                                             
                            stop   practices    of   intergovernmental                                                          
                            transfers from public facilities.                                                                 
 3348 Co-Chair Harris       Summarized that the state would need $50                                                            
                            plus  million  dollars   to  maintain  the                                                          
                            program at the FY03 level.                                                                        
 3422 Mr. Labbe             Explained that the state discontinued                                                               
                            payments   under  the  program  when   the                                                          
                            disapproval   was  issued.  Part  of   the                                                          
                            payment    remains    with   the    Tribal                                                          
                            government  and would not be  recoverable.                                                          
                            The assumption is  that the funds would be                                                          
                            received  and could  be used  to reduce  a                                                          
                            supplemental request by 20 - 15 percent.                                                          
 3657 Co-Chair Harris       Questioned if the department supports the                                                           
                            FY03  budget intent language, which  deals                                                          
                            with   the   reduction  of   services   if                                                          
                            Medicaid funding is not sufficient.                                                               
 3704 Mr. Labbe             Noted that the legislature inserted                                                                 
                            language that did  not hold the department                                                          
                            accountable  for the  fair share  funding.                                                          
                            The   intent   was    to   hold   to   the                                                          
                            appropriation.   There   has   been   some                                                          
                            growth.  He anticipates  some  level of  a                                                          
                            supplemental would be needed.                                                                     
 3828 Co-Chair Harris       Observed that the House Finance Committee                                                           
                            Chair would watch  the supplemental to see                                                          
                            that   the  department  manages  for   the                                                          
                            reduction.                                                                                        
 3850 Mr. Gilbertson        The Governor has directed departments to                                                            
                            look at service  delivery. There is a lack                                                          
                            of  access  to primary  care  services  in                                                          
                            rural  communities.  The  department  will                                                          
                            work  to  develop   an  integrated  health                                                          
                            service   program   with   tribal   health                                                          
                            systems,  the  Denali  Commission,  Alaska                                                          
                            Mental  Health Trust  Authority and  state                                                          
                            holder  groups   to  assure  that  primary                                                          
                            services  are being  delivered  throughout                                                          
                            the state.                                                                                        
 3942 Mr. Gilbertson        Noted that the third goal of the                                                                    
                            department is to  protect children and the                                                          
                            public   from  the  negative  affects   of                                                          
                            alcohol,   substance    abuse,   violence,                                                          
                            injury, and illness.                                                                              
 4041 Mr. Gilbertson        The state will also work with the federal                                                           
                            government     to     improve     Alaska's                                                          
                            responsiveness  to bio-terrorism  attacks.                                                          
                            The  state is in phase one of a  small pox                                                          
                            vaccination schedule.                                                                             
 4051 Mr. Gilbertson        Acknowledged budget concerns and the need                                                           
                            to   bring  financial  stability  to   the                                                          
                            department. He observed  that there is not                                                        
                            financial   stability   in  the   Medicaid                                                          
                            program,   but  stressed  that  the   core                                                          
                            mandate   of  the   department  would   be                                                          
                            protected.                                                                                        
 4231 Mr. Gilbertson        Provided a general department overview of                                                           
                            divisions and operations.                                                                         
 4257 Mr. Gilbertson        Addressed    the   Division   of    Public                                                          
                            Assistance  and  noted that  the  Division                                                          
                            provides   assistance   to  children   and                                                          
                            families.  He  noted   that  the  Division                                                          
                            provides  assistance to needy families  so                                                          
                            that  they can care for children in  their                                                          
                            own homes.                                                                                        
 4421 Mr. Gilbertson        Reviewed Chart 3: Adult Public Assistance                                                           
                            (APA)  Caseload  Projections. The  mission                                                          
                            of  the Division  of Public Assistance  is                                                          
                            to    encourage    and    promote    self-                                                          
                            sufficiency.    The    Division    handles                                                          
                            eligibility   determinations  for   public                                                          
                            assistance   and  the  Medicaid   program.                                                          
                            Benefits   have  grown  three-fold   since                                                          
                            1990.  Aid  for disabled  individuals  has                                                          
                            been   the   driving  force   behind   the                                                          
                            increase.                                                                                         
 4527 Mr. Gilbertson        Discussed the Temporary Assistance to                                                               
                            Needy Families (TANF) program.                                                                    
 4559 Representative Croft   Questioned the doubling  of the  disabled                                                          
                            line appropriation  in the APA assistance.                                                        
 4612 JANET         CLARKE, Explained that aid to disabled children                                                             
      DIRECTOR,    DIVISION is switched over when they reach the age                                                            
      OF     ADMINISTRATIVE of majority. Individuals may be living                                                              
      SERVICES, DEPARTMENT longer.                                                                                            
      OF HEALTH AND SOCIAL                                                                                                      
      SERVICES                                                                                                                  
 4742 Mr. Labbe             Agreed that there is a rapidly growing                                                              
                            senior population  that would not meet the                                                          
                            financial  requirements for  APA, but  the                                                          
                            disability  population   is  tied  to  the                                                          
                            demographics  of  aging.  There  has  been                                                          
                            substantial  growth  in  individuals  with                                                          
                            mental illness.                                                                                   
 4855 Mr. Gilbertson        Observed that the TANF reauthorization is                                                           
                            before  Congress.  All sides  are  pushing                                                          
                            for  a higher work  standard. He  referred                                                          
                            to  Chart 4: TANF Monthly Caseload.  There                                                          
                            is  currently  a plateau  in  applications                                                          
                            for  food stamps,  which is  traditionally                                                          
                            associated with TANF increases.                                                                   
 5142 Representative Croft   Noted that the low  is not in the  summer                                                          
                            months, but in October and November.                                                                
                                                                                                                              
 5148 Mr. Gilbertson        Pointed out that the reductions are a                                                               
                            result   of   permanent    fund   dividend                                                        
                            payments.                                                                                         
 5221 Mr. Gilbertson        Reviewed welfare reform caseload and                                                                
                            spending,   which  has   declined  by   40                                                          
                            percent  since 1996.  He  noted that  cash                                                          
                            assistance    has    dropped   in    half.                                                          
                            Additional  investments have been made  to                                                          
                            help facilitate the program.                                                                      
 5316 Co-Chair Harris       Observed that money saved in the welfare                                                            
                            to  work  program   has  been  shifted  to                                                          
                            childcare  assistance  and other  programs                                                          
                            and  questioned   if  there  had  been  an                                                          
                            overall savings.                                                                                  
 5347 Mr. Gilbertson        Noted that the TANF block grant ($60                                                                
                            million  per  year) contains  funding  for                                                          
                            childcare  and work services. Some of  the                                                          
                            TANF block grant  has been used to replace                                                          
                            increases  of  costs associated  with  the                                                          
                            program  and cash assistance payments.  He                                                          
                            explained   that   actual   general   fund                                                          
                            dollars in the program  have been reduced.                                                        
 5427 Ms. Clark             Noted that there was a $50 million dollar                                                           
                            reduction.                                                                                        
 5429 Mr. Gilbertson        Added that some of the TANF dollars can                                                             
                            be diverted to other  federal block grants                                                          
                            that   help  pay   for  frontline   social                                                          
                            workers.                                                                                          
 5525 Representative Joule   Noted   that   individuals   living    in                                                          
                            Anchorage are providing  services to rural                                                          
                            areas.  He pointed out that the intent  is                                                          
                            to provide employment  for rural residents                                                          
                            and questioned if  anything can be done to                                                          
                            encourage  local  employment. He  stressed                                                          
                            the   opportunity   for   departments   to                                                          
                            network.                                                                                          
 5726 Mr. Gilbertson        Observed that the Governor has made a                                                               
                            commitment    to     improving    economic                                                          
                            development  and  opportunities  in  rural                                                          
                            Alaska.    He    observed   that    tribal                                                          
                            corporations   are   handling  some   TANF                                                          
                            benefits.                                                                                         
 5815 Mr. Gilbertson        There is no 60-month limitation for those                                                           
                            living  in  Native villages  with  greater                                                          
                            than 50 percent  unemployment. He stressed                                                          
                            that  this should not  be a signal to  the                                                          
                            state  to abandon  attempts  to find  good                                                          
                            jobs in those communities.  There needs to                                                          
                            be a commitment  to job skills. Healthcare                                                          
                            is    one   of    the   fastest    growing                                                          
                            professions.  Retention  is a  key  issue.                                                          
                            The  Division of  Public Assistance  works                                                          
                            closely  with the Department of Labor  and                                                          
                            Workforce Development to find jobs.                                                               
 6044 Representative Croft   Observed that  $56 million  dollars  were                                                        
                            saved   and   questioned  how   much   was                                                          
                            reinvested.                                                                                       
                                                                                                                              
      TAPE HFC 03 - 6,                                                                                                        
      Side B                                                                                                                  
 6103 Mr. Gilbertson        Explained that a number of the block                                                                
                            grant  funds were  reinvested: $5  million                                                          
                            in   general   fund  dollars   have   been                                                          
                            supplanted  by TANF  [including some  Head                                                          
                            Start funds], $7  million for childcare is                                                          
                            administered  by  the Division  of  Public                                                          
                            Assistance and $22  million dollars of the                                                          
                            TANF   block   grant   is   diverted   for                                                          
                            childcare [development program].                                                                  
 6100 Ms. Clark             Clarified that the above $34 million has                                                            
                            been reinvested.                                                                                  
 6009 Representative Croft   Asked what  has  happened to  those  that                                                          
                            have  come off of benefits. He  questioned                                                          
                            if they had found employment.                                                                     
 5931 Mr. Gilbertson        Stated that it is too early to know the                                                             
                            results.                                                                                          
 5916 Ms. Clark             Noted that a "Leaver" study was done,                                                               
                            which  contains some data regarding  those                                                          
                            that have gone off of [TANF] benefits.                                                            
 5827 Representative        Referred to private sector creation of                                                              
      Stoltze               jobs and questioned if the administration                                                           
                            supports  [private  sector stimulation  of                                                          
                            jobs] programs such  as the one in Oregon.                                                        
 5820 Mr. Gilbertson        Explained that the Division of Public                                                               
                            Assistance  has  worked  with  individuals                                                          
                            who have come out  of the Oregon system to                                                          
                            develop  a  workforce   first  agenda.  He                                                          
                            stressed  that   the  intent  is  to  help                                                          
                            clients stay off of cash assistance.                                                              
 5700 Mr. Gilbertson        Pointed out that having a job is very                                                               
                            important  to self-esteem and providing  a                                                          
                            role  model. It is  very important to  get                                                          
                            persons to work.                                                                                  
 5556 Representative        Noted that the state is beginning to feel                                                           
      Whitaker              the affects of the 60-month [benefit]                                                               
                            limit.   He   questioned    if   data   is                                                          
                            available.                                                                                        
 5512 Mr. Gilbertson        Clarified that data is available and that                                                           
                            it would be provided at a later date.                                                             
 5438 Representative        Referred to the cycles of poverty.                                                                
      Whitaker                                                                                                                  
 5428 Mr. Gilbertson        Noted that there are links between                                                                  
                            parents that are  dependent on welfare and                                                          
                            the  likelihood that their children  would                                                          
                            require  future  assistance.  He  stressed                                                          
                            the  importance of job training  programs.                                                          
                            The  state would  receive  the benefit  if                                                          
                            the   next   generation  does   not   need                                                        
                            assistance   if  their   parents  can   be                                                          
                            transitions into the workforce.                                                                   
 5253 Representative        Questioned how the state of Alaska                                                                  
      Hawker                compares to other states in regards to                                                              
                            programs  services and  benefits that  the                                                          
                            Department  of Health and Social  Services                                                          
                            provides.                                                                                         
 5146 Mr. Gilbertson        Pointed out that there are a wide variety                                                           
                            of  ways  that states  administer  federal                                                          
                            block  grants and  programs. Medicare  and                                                          
                            Welfare   reform  are  the  two   largest.                                                          
                            Tennessee  delivers   services  through  a                                                          
                            HMO.  Some  states administer  all  grants                                                          
                            through the Medicaid  program. Some states                                                          
                            have been slow to  implement their Welfare                                                          
                            to  Work  programs.  Denali Kid  Care  has                                                          
                            been  a tremendous  success  in Alaska  in                                                          
                            terms  of enrollment.  Some  of the  money                                                          
                            that has allowed  Alaska's program to grow                                                          
                            so  quickly came  from  what other  states                                                          
                            left  on the table. That is being  changed                                                          
                            and   Alaska   may    not   receive   this                                                          
                            redistribution money in the future.                                                               
 4728 Representative        Summarized that Alaska has done a good                                                              
      Hawker                job of availing itself of federal                                                                   
                            resources programs.                                                                               
 4632 Mr. Gilbertson        Maintained that, while the state of                                                                 
                            Alaska has availed  itself to the majority                                                          
                            of programs offered  at the federal level,                                                          
                            the state has not  maximized the potential                                                          
                            for  federal  revenues.   Alaska  has  the                                                          
                            highest  amount allowable in terms of  its                                                          
                            income   levels    for   children   health                                                          
                            insurance   program    (200   percent   of                                                          
                            poverty,  which is the maximum allowed  at                                                          
                            the  federal level). The Medicaid  program                                                          
                            in  the state  of  Alaska has  implemented                                                          
                            cost sharing, but  there is flexibility to                                                          
                            implement containment  measures within the                                                          
                            Medicaid  program for additional  savings.                                                          
                            The  state still  controls its ability  to                                                          
                            structure federal programs.                                                                       
 4529 Representative        Asked the Commission to address the                                                                 
      Hawker                department's vision for shifting the cost                                                           
                            of  various programs to dollars  leveraged                                                          
                            from the federal system.                                                                          
 4506 Mr. Gilbertson        Explained that Medicare is an insurance                                                             
                            program  and financing  system to  provide                                                          
                            services   where  the  costs  are   shared                                                          
                            between the state  and federal government.                                                          
                            The state of Alaska  has looked at ways to                                                          
                            draw down of additional federal money.                                                            
 4334 Mr. Gilbertson        Concluded that the federal government is                                                          
                            not   paying  its  fair  share  for   care                                                          
                            delivered  in  the  state  of  Alaska  and                                                          
                            other  rural  states  where  the  cost  of                                                          
                            delivery is greater.  The formula is based                                                          
                            on per capita income,  which does not have                                                          
                            a correlation with  the cost of delivering                                                          
                            care.  There are ways to find  commonality                                                          
                            to  assure that services are delivered  in                                                          
                            the   most  efficient   manner  and   that                                                          
                            federal revenues are maximized.                                                                   
 4114 Mr. Gilbertson        Stressed the need for financial stability                                                           
                            to   the  Medicaid  Program.  This   means                                                          
                            financial stability  in grants and program                                                          
                            services.  General  fund  dollars  support                                                          
                            and  supplemental  requests  needs  to  be                                                          
                            reduced.                                                                                          
 4106 Mr. Gilbertson        Continued    by   referring   to    charts                                                          
                            illustrating  growth  in  eligibility  and                                                          
                            costs   among   all   populations.   These                                                          
                            growths  are associated  with  demographic                                                          
                            changes,  regional and  economic and  some                                                          
                            are the result of  efforts by providers to                                                          
                            maximize  payment   rates  by  signing  up                                                          
                            individuals  that are  dual eligible.   He                                                          
                            discussed  cost  and payment  issues  with                                                          
                            the  Medicaid  program.    The  State  has                                                          
                            flexibility   in   program   design,   but                                                          
                            federal  law  establishes some  things.  A                                                          
                            new contract will  address some issues, to                                                          
                            deliver  the right care to  beneficiaries.                                                          
                            Issues  that  will   be  reviewed  in  the                                                          
                            coming  year include:  the preferred  drug                                                          
                            list,    (determining   the   most    cost                                                          
                            effective  ones  and making  sure all  are                                                          
                            accessible),  transportation costs,  abuse                                                          
                            activities, and third party liability.                                                            
 3654 Mr. Gilbertson        Discussed Youth Services; DFYS did not                                                              
                            meet some federal  standards last year and                                                          
                            will  bring  on a  new director  to  bring                                                          
                            about  improvements.   He  explained  that                                                          
                            this would require  investment of time and                                                          
                            management.  Once  the plan  is  approved,                                                          
                            federal  standards  will  have to  be  met                                                          
                            within two years.                                                                                 
 3523 Mr. Gilbertson        Referred to Chart 10 regarding Child                                                                
                            Reports    of   Harm    and   Chart    12,                                                          
                            illustrating juvenile  justice activities.                                                          
                            He   noted  that   there  are   facilities                                                          
                            throughout the state,  including detention                                                          
                            and   treatment   facilities,   with   490                                                          
                            employees.   Pointed out  that there is  a                                                          
                            new  facility  in  Kenai, which  would  be                                                          
                            completed   in    March.   The   Ketchikan                                                        
                            facility    now   fully   operating.    He                                                          
                            discussed the Bethel,  Nome and McLaughlin                                                          
                            Youth  Center  facilities.    Overcrowding                                                          
                            issues  were  discussed as  being  handled                                                          
                            internally.                                                                                       
 3248 Mr. Gilbertson        Reviewed the Division of Public Health.                                                             
                            He  observed that the Division has a  wide                                                          
                            purview,  including   epidemics,  studies,                                                          
                            birth  defect prevention,  etc. There  are                                                          
                            686  full time  positions.  The most  high                                                          
                            profile  positions  involve the  issue  of                                                          
                            bio   terrorism,   and   the   small   pox                                                          
                            vaccination program.  A confidential state                                                          
                            plan  would  be  shared with  the  federal                                                          
                            government.  He added that the  department                                                          
                            would  begin the  initial vaccinations  of                                                          
                            the  response team within the next  month,                                                          
                            which   would    be   ready   to   conduct                                                          
                            vaccinations if  there is an detected case                                                          
                            of small pox any where in the world.                                                              
 3106 Mr. Gilbertson        Discussed the Division of Alcohol and                                                               
                            Drug  Abuse. Alaska  leads  the nation  in                                                          
                            alcohol     abuse;    79    percent     of                                                          
                            incarcerations   resulted   from   alcohol                                                          
                            abuse;  this also relates to child  abuse.                                                          
                            The  Governor  is   looking  at  treatment                                                          
                            programs in rural Alaska.                                                                         
 2951 Co-Chair Harris       Asked about the planned use of revenues                                                             
                            from an increase in the alcohol tax.                                                              
 2933 Mr. Gilbertson        Explained that the Administration is                                                                
                            still  in the  process  of developing  the                                                          
                            FY04 budget. No  decision had been made at                                                          
                            the time.                                                                                         
 2904 Representative Joule  Referred  to  tribal entities,  which  are                                                          
                            attacking  social  ills  through  wellness                                                          
                            programs.                                                                                         
 2821 Mr. Gilbertson        Referred to an appropriation of $15                                                                 
                            million   to  the  Alaska  Federation   of                                                          
                            Natives,     which     Senator     Stevens                                                          
                            appropriation    for   alcohol   treatment                                                          
                            programs  in  the  state of  Alaska.    He                                                          
                            acknowledged that  substance abuse and the                                                          
                            impacts  of substance abuse are  pervasive                                                          
                            throughout    many    areas    of    state                                                          
                            government.  The Governor is aware of  the                                                          
                            need of native corporations  for resources                                                          
                            and is committed  to local communities. He                                                          
                            expressed  a  desire   to  have  community                                                          
                            ownership in success of programs.                                                                 
 2641 Ms. Clark             Provided an update on the Alaska                                                                    
                            Psychiatric    Institute    facility    in                                                          
                            Anchorage.  She  noted that  the  facility                                                          
                            would  be  located  on property  near  the                                                        
                            McLaughlin  Youth  Center.   The  property                                                          
                            was  part  of  the  Alaska  Mental  Health                                                          
                            Trust   Land   Settlement.    The   crisis                                                          
                            treatment  center must  be vacated in  two                                                          
                            years.  A solution must be found for  that                                                          
                            facility.                                                                                         
 2332                                                                                                                           
                            DEPARTMENT OF CORRECTIONS                                                                       
 2308 MARC          ANTRIM, Introduced department staff and discussed                                                           
      COMMISSIONER,         their duties.                                                                                     
      DEPARTMENT         OF                                                                                                     
      CORRECTIONS,                                                                                                              
 2002 Co-Chair Harris       Questioned the difference between a                                                                 
                            deputy commissioner and an assistant.                                                             
 1943 Commissioner Antrim   Explained  that  a deputy  takes over  for                                                          
                            the commissioner in his absence.                                                                  
 1848 Commissioner Antrim   Discussed   the    Deputy   Commissioner's                                                          
                            Office, which oversees  training, prisoner                                                          
                            transport and prisoner classification.                                                            
 1652 Co-Chair Harris       Questioned    if   the    Administration's                                                          
                            priority  would   be  to  house  prisoners                                                          
                            close  to  home  or  if cost  would  be  a                                                          
                            factor in long-term incarcerations.                                                               
 1558 Commissioner Antrim   Noted  that  the  Department  attempts  to                                                          
                            house  prisoners   as  close  to  home  as                                                          
                            possible   while   meeting  security   and                                                          
                            financial needs.                                                                                  
 1509 Commissioner Antrim   Reviewed  the Division  of  Administrative                                                          
                            Services,   which   oversees  budget   and                                                          
                            finance,  data processing,  human  rights,                                                          
                            procurement,  facilities   management  and                                                          
                            inmate health care.                                                                               
                                                                                                                              
      TAPE HFC 03 - 7,                                                                                                        
      Side A                                                                                                                  
 28   Commissioner Antrim   Discussed  the Division  of  Institutions.                                                          
                            He   observed  that  costs  vary.   Larger                                                          
                            facilities  are cheaper to house  inmates.                                                          
                            New  prisoner  costs  are  higher  due  to                                                          
                            assessment  mandates. Location  determines                                                          
                            some of the cost.                                                                                 
 157 Co-Chair Harris        Questioned why the Palmer facility has                                                              
                            the lowest cost.                                                                                  
 219  Commissioner Antrim   Explained  that  it  is a  large  facility                                                          
                            with  low  security needs.  Capital  costs                                                          
                            were not included.                                                                                
 339 Co-Chair Harris        Questioned the cost of housing inmates in                                                           
                            Arizona.                                                                                          
 354  Commissioner Antrim   The  cost to house  inmates in Arizona  is                                                          
                            approximately  $54   a  day  or  $65  with                                                          
                            program  costs  included.  This  does  not                                                          
                            include travel.                                                                                   
 415 Jerry         Burnett, Observed that the Department is looking                                                             
      Special    Assistant, at including travel in their final                                                                
      Department         of figures.                                                                                          
      Corrections                                                                                                               
 425  Commissioner Antrim   Continued discussions  of inmate programs:                                                          
                            adult basic education,  general education,                                                          
                            youth   offender  program  (spring   Creek                                                          
                            Correctional  Center),   substance  abuse,                                                          
                            sex  offender treatment, anger  management                                                          
                            and vocational and technical training.                                                            
 556  Commissioner Antrim   Reviewed  the Community  Jail  Initiative,                                                          
                            which   operates  15  local  jails   under                                                          
                            contract  to police departments and  costs                                                          
                            $2,844,900 dollars.                                                                               
 703  Representative  Ralph Asked   the   timeline   on   audits   and                                                          
     Samuels               determinations of recidivism rates.                                                                
 734  Commissioner Antrim   Clarified  that the  sex offender  program                                                          
                            at   Highland   Mountain  is   the   first                                                          
                            scheduled  for audit. He  was not able  to                                                          
                            provide  information on recidivism  rates.                                                          
                            He   observed  that   "recidivism"   needs                                                          
                            further definition.                                                                               
 920 Representative         Questioned how the decline in dividends                                                             
      Stoltze               has impacted the Department.                                                                      
 1002 Mr. Burnett           Observed that it would have an affect,                                                              
                            but was not able to quantify it.                                                                  
 1028 Commissioner Antrim   In    response    to   a    question    by                                                          
                            Representative    Stoltze,    Commissioner                                                          
                            Antrim  noted  that  there is  a  victims'                                                          
                            rights  advocate  in  the  Department.  An                                                          
                            automative   notification  system   allows                                                          
                            people to call in  and receive information                                                          
                            regarding prisoners.                                                                              
 1109 Representative Joule   Asked which  inmate  programs  are  court                                                          
                            ordered.                                                                                          
 1128 Commissioner Antrim   Explained  that  substance abuse  and  sex                                                          
                            related  cases general have court  ordered                                                          
                            treatment.                                                                                        
 1198 Representative Joule   Questioned if there was a correlation  to                                                          
                            recidivism.                                                                                       
 1224 Commissioner Antrim   Affirmed   that  there   is  a  level   of                                                          
                            recidivism.  He  could  not  quantify  the                                                          
                            rate.  He acknowledged  that  he has  seen                                                          
                            inmates that have  gone through all of the                                                          
                            substance abuse programs return.                                                                  
 1251 Representative Joule   Stressed the need to utilize  traditional                                                          
                            cultural  programs   in  conjuncture  with                                                          
                            western methodologies.                                                                            
 1420 Commissioner Antrim   Acknowledged   that  34  percent  of   the                                                          
                            incarcerated  population   is  Native.  He                                                          
                            agreed  that  what  is  occurring  is  not                                                          
                            working and spoke  to the consideration of                                                          
                            including  Native  entities to  work  with                                                          
                            inmates.                                                                                          
 1516 Commissioner Antrim   Discussed   the   Division  of   Community                                                          
                            Corrections/Probation   and   Parole.   He                                                          
                            noted  that  it   staffs  field  probation                                                          
                            officers  in most  major cities.  Caseload                                                          
                            is   between  70   and  75  inmates.   The                                                          
                            caseload  should  not  exceed  60-65  when                                                          
                            there  is  a  requirement   for  1-2  pre-                                                          
                            sentence reports per month.                                                                       
 1712 Commissioner Antrim   Reviewed  the caseload and noted that  the                                                          
                            state  is  at  the edge  of  the  standard                                                          
                           requirements.                                                                                      
 1748 Commissioner Antrim   Referred   to   the   Interstate   Compact                                                          
                            Agreement,  which allows  prisoners to  be                                                          
                            transferred between states.                                                                       
 1818 Commissioner Antrim   Discussed  budget  units.  The  Department                                                          
                            was reduced to two  budget review units in                                                          
                            order     to      provide     flexibility:                                                          
                            Administration    and    Operations    and                                                          
                            Community Residential Centers.                                                                    
 1922 Commissioner Antrim   Observed  that there  are 3,123  prisoners                                                          
                            in  state  facilities.   They  are  at  98                                                          
                            percent of capacity  at present. There are                                                          
                            622   prisoners    incarcerated   at   the                                                          
                            contract  facility in  Arizona. There  are                                                          
                            21   prisoners  in  other  out  of   state                                                          
                            facilities  (due   to  medical  and  other                                                          
                            reasons).                                                                                         
 2035 Representative Joule   Asked when the Arizona contract would  be                                                          
                            up  for renewal. He asked the impact  of a                                                          
                            5 or 10 percent reduction.                                                                        
 2075 Commissioner Antrim   Responded  that the out-of-state  contract                                                          
                            is up in June 30, 2003.                                                                           
 2122 Mr. Burnett           Noted that there is an option for a one-                                                            
                            year  renewal,  with an  additional  four-                                                          
                            month   extension  at  the  end  of   that                                                          
                            period.     The     state    can     enter                                                          
                            renegotiations  in the current year or  do                                                          
                            an  automatic  extension   up  to  October                                                          
                            2004.                                                                                             
 2149 Commissioner Antrim   Stressed  that the Department is heavy  in                                                          
                            general   fund  spending.   It  would   be                                                          
                            difficult to incorporate a reduction.                                                             
 2226 Commissioner Antrim Spoke to the electronic monitoring.                                                                 
 2242 Representative        Questioned if the Department anticipates                                                            
      Stevens               increasing    the   use   of    electronic                                                          
                            monitoring.                                                                                       
 2305 Commissioner Antrim   Acknowledged  that  electronic  monitoring                                                          
                            is  cost  effective,  but  noted  that  it                                                          
                            doesn't  prevent actions by prisoners.  He                                                          
                            felt  that there  was room for  expansion,                                                          
                            but  stressed  that it  would have  to  be                                                          
                            done  cautiously.  The monitoring  is  not                                                        
                           GIS locating.                                                                                      
 2515 Representative        Questioned how success was defined.                                                               
      Samuels                                                                                                                   
 2527 Commissioner Antrim   Clarified  that recidivism rates have  not                                                          
                            been  determined, but that the  technology                                                          
                            is  successful in  monitoring the  inmates                                                          
                            and  the  inmates   successfully  complete                                                          
                            their requirements.                                                                               
 2631 Representative Joule   Questioned if there has been an expansion                                                          
                            of   roles  for   village  public   safety                                                          
                            officers.  He observed  that there are  no                                                          
                            contract  jails in  villages. He  observed                                                          
                            the  difficulty of  allowing prisoners  to                                                          
                            travel to participate  in family funerals.                                                        
 2735 Commissioner Antrim   Stated  that the issue is: To what  degree                                                          
                            is   the  Department   able  to  get   the                                                          
                            prisoner   back  to   their  hometown   to                                                          
                            participate  in  family funeral  services.                                                          
                            It     is     difficult     to     arrange                                                          
                            transportation,  even  in a  larger  town.                                                          
                            Prisoners  may  require  a high  level  of                                                          
                            custody, which requires  escorts. There is                                                          
                            a  question as to  who is responsible  for                                                          
                            payment of the escort and travel.                                                                 
 2847 Representative Joule   Noted that the family often offers to pay                                                          
                            the  transportation  and escort  costs.  A                                                          
                            larger  issue is  that  village jails  are                                                          
                            not state contract facilities.                                                                    
 3100 Commissioner Antrim   Reviewed the Department's  staffing level.                                                          
                            There   are  1484  authorized   positions.                                                          
                            There are 143 vacancies.                                                                          
 3207 Commissioner Antrim   Discussed the Department's  larger role as                                                          
                            a social service  provider. The Department                                                          
                            is   going  to  engage  in  medical   cost                                                          
                            containment.                                                                                      
 3329 Commissioner Antrim   Looked   at  population  management.   The                                                          
                            Department  has  decided  not  to  install                                                          
                            temporary  housing,  as  the  increase  in                                                          
                            prisoner population has not manifested.                                                           
 3421 Representative        Spoke in support of the use of temporary                                                            
      Stoltze               housing.                                                                                          
 3429 Commissioner Antrim   Stressed  the  need  to  engage  in  staff                                                          
                            recruitment.  Over  the last  eight  years                                                          
                            the Native Alaskan  staff has dropped from                                                          
                            6  to  4  percent. The  number  of  female                                                          
                            staff  has  decreased,  to a  point  which                                                          
                            makes it difficult to operate.                                                                    
 3609 Commissioner Antrim   Spoke  to workforce employment monies  for                                                          
                            training.                                                                                         
 3626 Commissioner Antrim   Observed   that   the   Department   would                                                          
                            continue   to   work   on   missions   and                                                          
                            measures.                                                                                         
 3700 Commissioner Antrim   Approximately  300 prisoners are  mentally                                                          
                            ill.  He questioned  if the Department  of                                                          
                            Corrections  is  the best  place to  house                                                          
                            these individuals.                                                                                
 3742 Commissioner Antrim   Pointed  out that there are few sleep  off                                                          
                            centers.  The  Department  of  Corrections                                                          
                            was  intended to  be the  last resort  but                                                          
                            has become the first resort.                                                                      
 3818 Commissioner Antrim   Anchorage   and   Juneau  are   the   only                                                          
                            communities    that    routinely    charge                                                          
                            arrested  persons with violations of  city                                                          
                            ordinances.  Most cities and towns  arrest                                                          
                            persons  for violations of state  charges,                                                          
                            leaving   the  Department  and  State   to                                                          
                            assume all the costs.                                                                             
 3956 Mr. Burnett           Clarified that Anchorage and Juneau do                                                              
                            reimburse the state.                                                                              
 4019 Representative        Questioned if the Department receives                                                               
      Stoltze               Alaska Mental Health Trust Authority                                                                
                            funds.                                                                                            
 4031 Mr. Burnett           The Department receives a little over $4                                                            
                            million  in  general  fund  mental  health                                                          
                            dollars.                                                                                          
 4049 Commissioner Antrim   The Department is  anticipating a need for                                                          
                            an  additional $1.2 million stemming  from                                                          
                            a  vehicle  accident  out  of  Seward  for                                                          
                            direct  health care costs and the lost  of                                                          
                            the transportation van.                                                                           
 4116 Commissioner Antrim   Added  that the  Department  is trying  to                                                          
                            work on charge back  costs associated with                                                          
                            ITG  costs. There  are a  large number  of                                                          
                            openings   for   probation   officer   and                                                          
                            correctional officers,  which transfers to                                                          
                            a high level of overtime.                                                                         
 4149 Representative        Referred to the cost schedule on page 2.                                                            
      Hawker                He asked for the calculated support of                                                              
                            the numbers. He  noted that there are over                                                          
                            600   prisoners  housed  in  the   Arizona                                                          
                            facility   and   questioned   if   outside                                                          
                            housing   is  an  acceptable  as  a   cost                                                          
                            reduction solution.                                                                               
 4248 Commissioner Antrim   Replied  that it is a logistical  problem.                                                          
                            There    are   costs    associated    with                                                          
                            transport.  He  discussed  other  problems                                                          
                            and  noted that  doctors are being  shared                                                          
                            with  other  units.   There  is  a  policy                                                          
                            question   of  whether  Alaskan   citizens                                                          
                            should be in Alaska.                                                                              
 4501 Representative        Questioned if the inmate population is at                                                           
      Hawker                risk in Arizona.                                                                                  
 4520 Commissioner Antrim   Did  not think that  prisoners in  Arizona                                                          
                            were  at risk  and  noted that  grievances                                                        
                            are monitored.                                                                                    
      ADJOURNMENT           The meeting was adjourned at 3:54 PM                                                              
                                                                                                                                

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