Legislature(2011 - 2012)HOUSE FINANCE 519
04/05/2011 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Confirmations: | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 5, 2011
8:41 a.m.
8:41:41 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 8:41 a.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Mike Hawker (alternate)
Representative Reggie Joule
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Bryan Butcher, Commissioner, Department of Revenue; Mike
Barton, Juneau; Wendy Redman, Executive Vice President,
Statewide Programs, University of Alaska.
PRESENT VIA TELECONFERENCE
Mike Powers, Fairbanks; Jyotsna "Jo" Heckman, Fairbanks.
SUMMARY
^Confirmations:
Department of Revenue
Bryan Butcher - Commissioner
Alaska Mental Health Trust Authority Board of Trustees
Mike Barton, Juneau
Russell Webb, Anchorage
University of Alaska Board of Regents
Jyotsna "Jo" Heckman, Fairbanks
Michael K. Powers, Fairbanks
8:42:35 AM
BRYAN BUTCHER, COMMISSIONER, DEPARTMENT OF REVENUE,
explained to the committee that his grandfather arrived in
Alaska in the 1940s after completing law school. His
grandfather had been appointed by former Governor Walter
Hickel as a judge. Mr. Butcher was married and had two
children that attended school at the same school his father
did. He attended college at the University of Oregon and
moved back to Alaska to take advantage of the school loan
forgiveness program. He discussed that he had worked for
various senators in the Alaska State Legislature and
emphasized that he had much experience with the finance
committees. He worked as legislative liaison for the Alaska
Housing Finance Corporation (AHFC) under Dan Fauske. He
relayed that he had been very happy to dig into the finance
aspects at AHFC.
8:49:02 AM
Representative Wilson asked about the top priorities of the
Department of Revenue (DOR).
Commissioner Butcher replied that formerly DOR had been
referred to as the department of "no." He wished to change
the reputation to that of the "department that solves
problems." He stated that the housing and gasline issues
were very important to him. He credited Pat Galvin and
Brian Andrews for changing DOR culture.
Commissioner Butcher continued that another priority
involved the focus on the department as a whole. He valued
his connection with each individual employee as modeled by
Dan Fauske.
Representative Gara expressed that dedication and
intelligence were important qualities for a commissioner.
He appreciated the governor's choice in appointing a
commissioner who believed in his agenda. He stated that he
supported the commissioner despite recent disagreements
about HB 110. He credited Marcia Davis for her organization
and preparation when presenting arguments.
Representative Doogan wondered about the turnover in the
upper echelons of the department.
Commissioner Butcher informed the committee about an
available master auditor and several commercial analyst
positions. The primary focus included filling the tax
director position.
Representative Doogan wondered whether the positions would
be filled by the next legislative session.
8:57:33 AM
Commissioner Butcher responded that a year was a reasonable
time and that he hoped to have the positions filled during
the summer of 2011. He praised the DOR staff.
Vice-chair Fairclough recalled that the Alaska Children's
Trust encountered difficulties acquiring financial
statements for smaller subaccounts. She relayed that boards
in the past had experienced difficulty obtaining accounting
information in a timely manner. She asked how many types of
funds were managed by DOR. She understood the challenges of
a small fund.
Commissioner Butcher responded that many funds were managed
in the GeFonsi pool. He offered to research the question
for Vice-chair Fairclough.
Vice-chair Fairclough wondered about Commissioner Butcher's
highest priority regarding the staffing and work
environment for DOR.
Commissioner Butcher replied that his goals were related to
improvement of the department on a division by division
basis. He planned to "get the work done and get the right
answer." He furthered that the number of complaints in
Child Support Services and the Permanent Fund Dividend
Division were down from five years before.
9:01:44 AM
Vice-chair Fairclough commented on the vacant positions
within DOR. She suggested that the commissioner inform the
committee of the potential need for salary adjustments to
enable the department to hire the right people.
Commissioner Butcher replied in the affirmative. He agreed
that communication with the legislature would further the
process of hiring for the very important vacant positions.
Representative Guttenberg discussed the audit division. He
understood that locating the right people for the positions
was important; however, he asked whether systemic issues
might lend clues to filling positions of master auditor or
director.
Commissioner Butcher replied that the primary issue in the
audit division was lack of auditors. He expressed pride in
the skill of the master auditors regarding analysis of
regulations and decisions. He agreed that the tax director
held a very important, yet vacant position. He stated that
the interview process was ongoing. The department continued
to seek the right person for the position.
9:04:53 AM
Representative Costello wondered about Mr. Butcher's views
on the departments' missions and measures. She believed
that accountability to the public was very important. She
asked about the commissioner's view of missions and
measures in his department.
Commissioner Butcher replied that he had been involved in
missions and measures since his time as a legislative
finance aide. He agreed with Representative Costello's view
regarding the importance of missions and measures. He
discussed a measure that had been developed when he had
worked at AHFC. He believed that the measure must
accurately express the department's desires and goals.
Representative Costello wondered what Mr. Butcher hoped to
accomplish during his tenure as commissioner.
Commissioner Butcher hoped to leave the department in great
condition. He wished to leave the department with competent
employees to enable the best.
9:08:10 AM
Vice-chair Fairclough thanked Mr. Butcher for his work and
that of Lennie Dees, and Bruce Tangeman. She appreciated
the DOR team.
Co-Chair Thomas wondered why the department refrained from
purchasing new computers.
Commissioner Butcher responded that he was unsure. He
recalled that the legislature removed a request for new
computers from OMB one year. He agreed that the problem
deserved resolution.
Co-Chair Thomas commented on the loss of millions of
dollars during the auditing process. He blamed the
computers and hoped that the problem would be addressed
soon.
Representative Edgmon supported AHFC energy programs. He
commented on the past focus on urban issues by other
commissioners. He hoped that opportunities to travel to
rural areas were never overlooked. He credited Sean Parnell
for travelling extensively around Alaska to gain the
greater perspective. He hoped that Commissioner Butcher
would choose to travel often as well.
Commissioner Butcher promised the committee that he would
focus on the entire state.
Representative Doogan hoped that Mr. Butcher felt welcome
in Spenard anytime. He discussed the poor results reported
for DOR in its last audit. He wondered what could be done
to improve the process and ensure that the department was
not so far behind. He wondered whether there was a plan in
place increase alignment.
Commissioner Butcher replied that filling the vacant
positions within the department was his greatest concern.
He expressed even greater concern about improving the
process at DOR.
9:15:55 AM
Representative Doogan asked if the commissioner had a
target for the improvement.
Commissioner Butcher replied that the summer of 2011 was
the department's target. He offered to meet with the
representative on their progress at a later time.
Representative Joule discussed the generation of oil
revenue for the state. He encouraged a conversation
regarding diversification of the economy and expansion of
sources of revenue aside from oil. He believed that the
conversation would prove difficult, but that the state
would be in a much better position having had it.
Commissioner Butcher agreed.
Vice-chair Fairclough discussed the DOR Revenue Source
Book. She asked if the commissioner had ideas to improve
the accuracy of the forecast. She recalled discussions
during hearings for HB 110 where a 20 percent differential
was noted. She credited the book for helping legislators
make decisions about deficit and surplus spending.
Commissioner Butcher replied that the forecast was often
overly optimistic. He wished to make the process of revenue
forecasting an objective one.
Vice-chair Fairclough wondered how many volumes the DOR
statute enveloped.
Commissioner Butcher did not know.
Vice-chair Fairclough wondered about the return of
investment. She queried whether the regulations established
for the state were coordinated or in conflict with other
areas of state statutes. She thought that the information
would be valuable for Alaskans. She suggested regulation
review to determine whether DOR was carrying out the will
of the legislative body.
Commissioner Butcher promised to look into the matter.
Vice-chair Fairclough stated conflict with the chosen
amount of $10 for non-profit proceeds from gambling. She
pointed out that non-profits were struggling while the
department had chosen through regulation to cap the amount
of proceeds.
Commissioner Butcher offered to look into it.
9:24:10 AM
Co-Chair Stoltze wondered whether there were objections to
moving Mr. Butcher's name forward as the commissioner.
There being NO OBJECTION, it was so ordered.
Co-Chair Stoltze appreciated the role of Mr. Butcher's wife
and children in his public service.
9:25:17 AM
MIKE BARTON, JUNEAU, reported that he lived in Alaska for
33 years. He mentioned that he and his wife and family
members had been blessed to live in the state. He looked
forward to serving on the Alaska Mental Health Trust if
confirmed.
Vice-chair Fairclough wondered about Commissioner Barton's
passion related to mental health.
Commissioner Barton responded that Alaska had been so good
to him that he wanted to give back to the state. He
referred to experience with beneficiaries of the trust. He
stated that he wished to remain professionally active.
Representative Wilson asked about the board's strengths and
weaknesses.
Commissioner Barton responded that he was new to the board
and felt it presumptuous to comment on weaknesses. He
stated that the board and staff for the trust worked
extremely hard. He hoped to contribute by enhancing the
revenues received from the trust assets.
9:29:15 AM
Representative Wilson recalled that the Board tended to
start programs and then turn them over to the state. She
wondered if some programs should continue with funding from
the Mental Health Trust.
Commissioner Barton understood the issue.
Co-Chair Thomas spoke to his experience working with
Commissioner Barton. He voiced concerns about Tongass old-
growth land exchange issues and queried the board's
position.
Commissioner Barton explained that the issue was under
discussion and evaluation.
Co-Chair Stoltze appreciated Commissioner Barton's service.
MIKE POWERS, FAIRBANKS (via teleconference), reported that
he was a candidate for the university Board of Regents. He
moved to Alaska in 1982 with the Vista program. He earned a
master's degree in business with an emphasis in health
administration from the University of Wisconsin at Madison.
He had returned to Alaska after school and lived in
Fairbanks for 25 years. He worked at Fairbanks Memorial
Hospital for 25 years as CEO for the last 16. He served as
chairman for two terms for the Alaska Hospital Association.
Co-Chair Stoltze asked about his interest in the Board of
Regents.
9:35:00 AM
Mr. Powers explained that he originated from a family of
teachers. Upon returning to Fairbanks, he was impressed
with the University's impact on the community and the
responsiveness to the needs for nursing outreach programs.
He believed that the University members were well
integrated within the community. He added that he had the
time required to commit to the Board.
Representative Joule wondered whether Mr. Powers would have
the ability to focus on the state as a whole and not just
on Fairbanks.
Mr. Powers replied in the affirmative. He witnessed a
statewide focus from all of the regents. He worked with the
Alaska Hospital Association on statewide issues, which he
believed demonstrated a strong interest. He expressed a
worldview that encompassed the entire state. He responded
that the Fairbanks campus retained a strong relationship
with the Tanana Chiefs Conference, which also demonstrated
a broad view.
Representative Joule wondered about Mr. Powers' view
related to rural outlying campuses.
Mr. Powers believed that rural campuses were vital. He
believed the rural challenge related to resources. He
opined that the campuses felt overlooked and that it was
important for Board members to engage with the campuses. He
believed that the rural programs defined the uniqueness of
our state.
9:41:41 AM
Vice-chair Fairclough explained that she had been the sub-
committee chair for the university for the past several
years. She wondered whether he had read the Fisher report.
She asked for a job description of a member of the Board of
Regents.
Mr. Powers had read the report. He provided that the job
involved advocating for and holding the President
accountable for advancing the quality of the University.
Vice-chair Fairclough wondered whether he believed he
should be directing the president of the university to
accomplish a goal.
Mr. Powers replied that he would approve plans proposed by
the president. The president had the expertise to develop
and recommend, with the approval coming from the Board of
Regents.
Vice-chair Fairclough estimated that the Board of Regents
should be setting a strategic plan for the University
system. She stated that the Chief Operating Officer would
then implement the plan. She asked if the state had one
university or three.
Mr. Powers replied that the state had one university with
three main campuses containing three slightly different
missions. He elaborated on the university system and the
unique needs of the separate campuses.
Vice-chair Fairclough shared that she was informed by three
chancellors that the universities were threefold. She
discussed the difficulty in promoting the growth of the
university without an alignment between the three campuses.
She stated that the university budget was approaching $1
billion. She feared a challenge that the board was not
prepared to meet. She wondered how he might handle an
environment where less money was available to the
university.
Mr. Powers replied that universities across the nation were
struggling with the same issue. He proposed clarification
of the university's missions. He expressed the need to
avoid duplication.
9:48:41 AM
Representative Costello expressed concern that every member
of the Board of Regents would have graduated from the
Fairbanks campus. She asked how he would work to overcome
the perception that the board would represent a system with
statewide campuses.
Mr. Powers replied that he was not a graduate of UAF. He
understood the concern that affiliations with Fairbanks may
drive a certain philosophy. He recalled a past conversation
regarding the shortage of health care practitioners in the
state. The solution was to create training opportunities
outside of Anchorage. He shared the opinion that services
must be offered outside of Anchorage and Fairbanks.
Representative Wilson wondered when Mr. Powers had arrived
in Alaska.
Mr. Powers relocated to Alaska in 1982.
Representative Wilson wondered why he attended graduate
school outside of Alaska.
Mr. Powers replied that he had liked the social relevance
of health administration, but the University of Alaska did
not offer the necessary program in health administration.
He did find the program in his home state of Wisconsin.
Representative Wilson discussed that she had been the chair
of K-12 education committee. She asked whether the
university system required higher standards for students.
Mr. Powers responded that while his children had the
advantage of engaged and involved parents, not all children
are as fortunate. He opined that standards must be
increased and greater preparation for students in the K-12
years must occur. He believed that the faculty must become
highly engaged. He noted the importance of university
advisors who often help to keep students focused on a four
year time line.
Representative Wilson wondered about community colleges and
Mr. Powers' opinion.
Mr. Powers replied that the Tanana Valley campus provided
opportunities for student to acquire necessary skills.
Vice-chair Fairclough asked Mr. Powers' thoughts regarding
an Alaskan medical or law school.
Mr. Powers responded that Alaska was faced with a shortage
of physicians. He stated that he was not in favor of an
Alaskan medical school, but preferred the idea of
purchasing services. He spoke about a new medical school in
Washington that would provide one source of physicians.
9:58:47 AM
Co-Chair Stoltze wondered whether the medical school was
more of a political grandstanding idea.
Mr. Powers replied that the idea called attention to the
issue.
Vice-chair Fairclough was relieved that the medical school
was not a high priority, as the cost was extensive. She
wondered whether Mr. Powers communicated in favor of a law
school.
Mr. Powers believed that collaboration with other
universities would produce the best opportunities.
Vice-chair Fairclough asked Mr. Powers about his position
on the scholars program versus the governor's scholarship
program. She asked if he would protect the scholar's
program if both programs were available.
Mr. Powers opined that the scholars program was well
received. He knew that inconsistencies and unfairness
existed in the delivery of the program, but maintained that
it provided a great boon to students and helped bring
students back to Alaska. He was in favor of a scholars
program but did not know enough about the governor's
proposal to speak to it.
Vice-chair Fairclough believed that the governor's program
intended to provide a more vigorous curriculum to high
school students along with a required grade point average.
She supposed that if the governor's proposed scholarship
program was approved, some might consider it a duplicate
effort. She wondered if Mr. Powers might consider using the
$2 million in a different way.
10:05:14 AM
Co-Chair Stoltze wondered about the inconsistencies
connected to the scholars program mentioned by Mr. Powers.
Mr. Powers stated that he required more information about
the governor's proposed scholarship program. He stated that
the scholars program served both highly competitive
Anchorage schools along with less competitive rural
schools. He believed that the student graduating from the
more competitive schools might be more successful in the
university setting, providing an inconsistency. He thought
the issue must be further explored and the scholarship
program strengthened.
Co-Chair Stedman asked if some rural students should not
attend the University of Alaska.
Representative Guttenberg interjected that Mr. Powers'
statement was misconstrued.
Mr. Powers countered the statement made by Co-Chair Stoltze
clarifying that college preparation courses are more easily
found in the urban schools, leading again to
inconsistencies.
Vice-chair Fairclough thanked Mr. Powers for his
involvement in the public process. She understood the
challenges accompanied by presenting testimony via
teleconference. She discussed the responsibilities under
the Board of Regents under the Alaska constitution. She
cited Page 25, Article 7 of the constitution. She expressed
concerns regarding Mr. Powers' view of his leadership role
in contrast with the constitution. She pointed out that the
constitution states that "the university shall be governed
by a Board of Regents." She believed that the board had the
responsibility of formulating policies and that the
president carried out the policies by hiring an executive
officer to act on behalf of the board. She asked again what
Mr. Powers believed his leadership role to be. She wanted
to be sure that if confirmed, Mr. Powers understood that he
was in a leadership position that was accountable for
setting a strategy forward based on all pertinent
information.
Mr. Powers believed that his role was to hire and to
evaluate and to possibly replace the president if
necessary. He planned to work with the president to advance
the mission of the university.
Vice-chair Fairclough wondered whether that was his
definition of governing.
Mr. Powers stated that was his definition of moving a large
organization. He promised to approve, debate, advance, and
advocate particular missions and programs. He did not have
the expertise to develop a program in nuclear engineering
but he would approve and advance it.
Representative Gara asked about the regional balance for
the Board of Regents.
WENDY REDMAN, EXECUTIVE VICE PRESIDENT, STATEWIDE PROGRAMS,
UNIVERSITY OF ALASKA, replied that there were five regents
from Anchorage, two from Juneau, and one from Kodiak. The
newest additions would include two regents from Fairbanks.
Representative Costello expressed a similar concern
regarding regional balance. She had asked Legislative
Research to provide history. She relayed that Ms. Redman
had testified that people appointed from a certain region
would have an allegiance to the particular area. She
queried the balance because, upon approval of the
applicants before the committee, the regents with degrees
from a University of Alaska campus will have received it
from the Fairbanks campus.
10:13:52 AM
Representative Doogan wondered when degrees were first
offered from the University of Anchorage. He recalled that
the University of Anchorage was a community college
initially.
Ms. Redman replied that the first degree offered through
the University of Anchorage was in the 1980s.
Vice-chair Fairclough wondered whether universities should
be accredited in a variety of ways.
Mr. Powers responded that he must be further informed about
the programs and their required accreditation to respond
accurately.
Vice-chair Fairclough understood but asked him to look into
the accreditation on the behalf of Alaska. She stressed
that each campus ought to offer core classes despite the
arguments about duplication. She expressed concerned about
Mr. Powers' view regarding his leadership role. She
understood his prior testimony to indicate that he would
defer to the president's good judgment. She asked about Mr.
Powers' accountability to the students that attend the
University of Alaska.
Mr. Powers countered that the president was accountable to
the Board of Regents. He believed that a strategic plan was
typically developed through the administration through the
faculty and student body and then advanced to the Board who
retains the ultimate authority. He envisioned himself as an
advocate for the students.
10:18:53 AM
Representative Gara relayed rumors that some or all of the
doctorate programs should be housed at the Fairbanks
campus. He wondered how Mr. Powers felt about the issue.
Mr. Powers believed that doctorate programs were
appropriate for other campuses. He believed that the
University of Fairbanks should focus on their traditional
strengths of science and engineering. He credited the
Washington, Wyoming, Alaska, Montana, and Idaho (WWAMI)
School as the perfect example of a hybrid program.
Representative Guttenberg commented that that the
University of Alaska was one school with many campuses. He
credited Mr. Powers for his exceptional administration of
the hospital in Fairbanks.
10:21:37 AM
JYOTSNA "JO" HECKMAN, FAIRBANKS (via teleconference),
informed the committee that she arrived in Fairbanks from
New Delhi India in 1975. She stated that she received her
bachelor's degree from the University of Fairbanks in 1979
and her master's degree in 1985. She stated that she worked
in the banking industry since 1979. She informed the
committee that she held the position of president and CEO
of Denali State Bank for the last eight years. She
mentioned her husband and two sons.
Vice-chair Fairclough asked Ms. Heckman to identify her
role as a member of the Board of Regents.
Ms. Heckman responded that her role included establishing
policy, monitoring funds, and hiring, supporting, and
evaluating the president of the university. She stated that
she would review the strategic vision proposed by the
president. She pointed out that she was the type of leader
who was comfortable with the evaluation of strategic
planning. She expressed comfort in monitoring positions and
providing oversight.
Vice-chair Fairclough asked if Ms. Heckman read the Fisher
Report and the MacTaggart Report.
Ms. Heckman replied yes.
Vice-chair Fairclough asked if Ms. Heckman believed that
the state had one or three universities.
Ms. Heckman responded one, the University of Alaska
including three different campuses plus rural campuses.
Vice-chair Fairclough noted that she would vote yes on the
confirmation of Ms. Heckman. She hoped that the candidate
would direct the president to work with the chancellors
with their understanding of one university versus three.
10:27:00 AM
Representative Gara commented on the issue of retaining
qualified teachers in the rural schools. He asked about the
potential for training rural teachers from rural areas
encouraging teachers to remain in the community.
Ms. Heckman replied that she lacked background information
about the topic. She guessed that the issue was comparable
to retaining law enforcement officials in rural areas in
other professions. She believed teachers had an important
role to play in the development of young people. She
explained her experience with hiring for entry level
positions and the alarming lack of adequate education she
witnessed among applicants. She advocated for reevaluation
of K-12 practices to improve on the dire situation in
Alaska.
Representative Guttenberg referred to Ms. Heckman's resume
and acknowledged the work of her father.
10:31:42 AM
ADJOURNMENT
The meeting was adjourned at 10:32 AM.
10:32:19 AM
| Document Name | Date/Time | Subjects |
|---|---|---|
| Commissioner, DOR - Butcher#2.docx |
HFIN 4/5/2011 8:30:00 AM |
confirmations |
| Regents - Heckman #1.pdf |
HFIN 4/5/2011 8:30:00 AM |
conformations |
| Regents - Powers #1.pdf |
HFIN 4/5/2011 8:30:00 AM |
confirmations |
| Mental Health Trust - Webb#2.pdf |
HFIN 4/5/2011 8:30:00 AM |
confirmations |
| Mental Health Trust - Barton#2.pdf |
HFIN 4/5/2011 8:30:00 AM |
confirmations |
| Bryan D Butcher Resume 2011.pdf |
HFIN 4/5/2011 8:30:00 AM |