Legislature(2015 - 2016)HOUSE FINANCE 519
01/28/2015 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Fy 16 Budget Overview: Alaska Mental Health Trust Authority | |
| Fy 16 Budget Overview: Department of Education and Early Development | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
January 28, 2015
1:30 p.m.
1:30:51 PM
CALL TO ORDER
Co-Chair Neuman called the House Finance Committee meeting
to order at 1:30 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Tammie Wilson
MEMBERS ABSENT
Representative Lance Pruitt
ALSO PRESENT
Mike Barton, Trustee, Alaska Mental Health Trust Authority;
Jeff Jessee, Chief Executive Officer, Alaska Mental Health
Trust Authority; Michael Hanley, Commissioner, Department
of Education and Early Development; Heidi Teshner,
Administrative Services Division, Director, Department of
Education and Early Development; Les Morse, Deputy
Commissioner, Department of Education and Early
Development.
SUMMARY
FY 16 BUDGET OVERVIEWS:
ALASKA MENTAL HEALTH TRUST AUTHORITY
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT
1:31:02 PM
Co-Chair Neuman discussed the agenda for the day.
^FY 16 BUDGET OVERVIEW: ALASKA MENTAL HEALTH TRUST
AUTHORITY
1:31:49 PM
MIKE BARTON, TRUSTEE, ALASKA MENTAL HEALTH TRUST AUTHORITY
(AMHTA), referenced a PowerPoint presentation titled House
Finance Committee" dated January 28, 2015 (copy on file).
He shared that he had served as the AMHTA chair for the
past couple of years. He moved to slide 1 titled
"Trustees." He introduced other board trustees in the
committee room. He communicated that trustees were advised
by statutory advisor groups the Governor's Council on
Disabilities and Special Education, Council on Aging,
Alaska Mental Health Board, and the Advisory Board on
Alcoholism and Drug Abuse.
Co-Chair Neuman noted that Vice-Chair Saddler had joined
the meeting.
JEFF JESSEE, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL HEALTH
TRUST AUTHORITY, listed trust beneficiaries on slide 2
including individuals with mental illness, developmental
disabilities, chronic alcoholism and other substance abuse
disorders, Alzheimer's disease and related dementia, and
traumatic brain injury. He relayed that prevention was a
significant part of the trust's mission; things that could
be done to prevent individuals from ending up in
beneficiary status. He addressed the trust's assets on
slide 3. He reported that the financial health of the trust
was very good. He detailed that the Alaska Permanent Fund
had been doing well and the trustees had established a
robust financial system. He relayed that the trust had been
able to make its payout even when the Permanent Fund had
done poorly. He stated that the system had stood the trust
in good stead for many years. He pointed to a five-year
historical and projection chart for revenues and expenses
on slide 4. He discussed that when revenues had been in the
negative there had continued to be a flow of money into the
trust to assist with beneficiary services. He moved to
slide 5 titled "Trust Land Office." He elaborated that the
Land Office continued to do a stellar job of generating
revenue (principal and income) for the trust. He shared
that the office had generated nearly $100 million into the
principal of the trust, which continued to generate revenue
over time (typically around $4 million annually).
1:36:27 PM
Mr. Jessee moved to slide 6 and addressed grants awarded in
FY 14. He explained that two-thirds of the grant funds came
through state government as Mental Health Trust Authority
Authorized Receipts (MHTAAR) and one-third came directly
from AMHTA. He detailed that the goal was to have an
integrated health system and the trust liked working with
state agencies in a collaborative way; however, there were
situations when a direct grant was the most efficient and
effective option. He expounded that many of the direct
grants were to assist with capital projects for new
facilities, renovations, or other. Slide 7 showed
anticipated income in FY 16 totaling $28 million; it
included a payout from principal of $20 million, $3 million
from prior years' average lapse, additional funds from the
Land Office average spendable income, and interest average.
Mr. Jessee emphasized that the trust utilized a percentage
of market value (POMV) strategy, which meant it was
dependent upon the revenue generated by the Permanent Fund.
He detailed that the trust's base payout was 4.25 percent
of the average value of the fund's cash assets. He
explained that the method had enabled the trust to have
financial stability in good and bad times. He knew there
had been many discussions about what would happen with the
Permanent Fund and whether it would switch to a POMV
methodology. He furthered that the trust was an example of
a fund that had switched to POMV and had created much
stability for the AMHTA.
1:39:09 PM
Mr. Jessee moved to slide 9 that pertained to trustee FY 16
budget recommendations of slightly over $1 million in
General Fund/Mental Health increments. A bulk of the funds
were designated to the National Family Caregiver Grant
Program and Senior In-Home Services. He addressed that
during the difficult financial climate it would be
challenging to determine how to have a sustainable budget
in the short-term, while looking at strategic investments
for the future. He discussed challenges related to an aging
population such as the importance of supporting family
caregivers, in-home caregiving, and home healthcare. He
highlighted the potential for caregiver burnout, which
would mean individuals requiring care would need higher
levels of care. He referred to higher levels of care and
the necessary long-term thinking associated with the issue.
He referenced previous discussions with Co-Chair Neuman
related to recidivism. He elaborated that some things could
be done to save money in the budget, but it was not a smart
fiscal strategy if it meant the state was heading towards
building another prison in upcoming years. He noted that
the senior care issues were an area of particular concern
because they would only continue to increase in coming
years. He briefly highlighted increments for the Long-Term
Care Ombudsman Office, area health education centers, and
the licensed marriage and family therapist program. He
discussed a proposed partnership on information technology
application telehealth service system improvements. He
stated that it was necessary to look at alternative ways of
delivering cost efficient and effective services in order
to build a long-term sustainable budget. He believed
telemedicine needed to be at the top of the list. He noted
that there were significant opportunities to partner with
tribal health and education systems.
1:42:36 PM
Mr. Jessee discussed slide 10 that included FY 16 capital
recommendations. He explained that the slide included
historical numbers that had gone into the capital budget to
cover deferred maintenance on nonprofit facilities, home
modifications and upgrades to retain housing for elderly
family members, the Homeless Assistance Project and Special
Needs Housing Grant, and coordinated transportation. He
elaborated that home modifications were a good investment
if it allowed an elderly family member to remain at home,
thereby reducing long-term costs for the state for out-of-
home care. He relayed that a significant portion of the
Homeless Assistance Project funding went towards operating
homeless assistance programs; services for the homeless
population would cease without the funding. The trust had
partnered with the Alaska Housing Finance Corporation
(AHFC) on the special needs housing grant to secure housing
for high users of community services. He referred to the
Housing First program under evaluation by the University of
Alaska. He detailed that the program did not require
residents to get sober prior to being housed. The strategy
was to provide housing first, which increased the health of
the individuals while dramatically reducing costs
associated with hospital visits, alcohol, and other. The
hope was that some of the individuals would move on into
permanent housing. Coordinated transportation helped
beneficiaries access needed services and work.
Mr. Jessee addressed slide 11 titled "Established Focus
Areas." He spoke to disability justice related to reducing
recidivism and pulling individuals out of the cycle of the
criminal justice system through therapeutic, mental health
courts, and other. He discussed substance abuse prevention
and treatment, which the trust believed it could make
progress on over time. He reminded the committee that the
McDowell Group had reported the cost of alcohol as $1.2
billion to the State of Alaska. He asked how the number
could be accurate. In response, he addressed criminal
behavior related to alcohol, child protection and the
Office of Children's Services caseload driven by alcohol,
lost productivity at work due to alcohol abuse, all of
which represented a substantial costs. He reasoned that if
demand for alcohol could be cut it would have a significant
impact. He spoke to the importance of beneficiary
employment and engagement; with an emphasis on getting real
jobs in the community. He stated that whether the price of
oil was below $50 or above $100, the trust wanted its
beneficiaries to be the least dependent on government
programs as possible. He elaborated that it was in the
beneficiaries' long-term interest in terms of services and
as fully functional members of the community. He mentioned
advertisements produced by AMHTA with the goal of getting
employers to understand that trust beneficiaries were real
workers; in many cases they were more reliable, longevity
was better, and they were appreciative to get a check. He
addressed workforce development and efforts in the area.
Mr. Jessee addressed the importance of workforce
development on slide 11. He noted that workforce demands
could increase if Medicaid expansion took place. He relayed
that AMHTA had the infrastructure in place through its
trust training collaborative to ensure it had people ready
to take the jobs. He looked at housing and long-term
services and supports for seniors and others with
disabilities, which would enable them to stay at home to
the maximum extent possible.
1:49:12 PM
Mr. Jessee moved to slide 12 related to the trust's current
priorities:
· Medicaid Expansion and Reform
· Recidivism
· Substance Abuse Prevention & Treatment
Mr. Jessee addressed Medicaid expansion on slides 13
through 15. He relayed that expansion would impact many
trust beneficiaries. He stated that projections were around
40,000. He stressed that the expansion opportunity was
particularly significant for single males between the ages
of 18 to 65 (who had not been eligible previously), many of
whom were using substance abuse treatment services. He
continued that the Division of Behavioral Health was
estimating that 5,000 beneficiaries would become Medicaid
eligible. He elaborated that as the new population gained
coverage there would be some offsets and savings to general
funds. He stated that initially Medicaid expansion would be
100 percent covered and would drop to 90 percent in the
future. He expounded that the needed services would not all
be covered by Medicaid. Another important component was
timing related to expansion and when the savings would be
recognized (e.g. July 1, 2015 or a later time). He did not
believe the state would have 100 percent of Medicaid
expansion on July 1.
Co-Chair Neuman relayed that questions would be addressed
after the presentation.
Mr. Jessee continued on slide 16 related to the impact of
Medicaid expansion on the Department of Corrections (DOC).
He addressed that inmates may become Medicaid eligible and
some of the costs for inmate inpatient stays may be offset.
He pointed to the estimate that $6.8 million to $7.65
million could be paid for with federal Medicaid, but
believed the savings would not be achieved in the first
year. He emphasized that the savings were all dependent on
the timing of how expansion was implemented. He did not
believe it would be possible to continue with the status
quo under the expansion. He stressed that expansion would
have to be used as a catalyst for reform (slide 17);
exactly what the reform looked like was not yet known. He
addressed the desire to move to a system that paid more for
outcomes and less for activities. The trust was working
with the department on developing a contract to obtain
input from others (particularly related to behavioral
health) to help the state understand how other states had
used expansion to catalyze reform and what may work for
Alaska. He believed the reform was critical. He stated that
current Medicaid projections were unsustainable.
1:54:37 PM
Mr. Jessee continued to speak to slide 17. He stressed that
it was critical to help develop a sustainable Medicaid
system in Alaska. He believed that the Medicaid system
would collapse at some point if it did not become a
sustainable system. He added that the collapse could occur
sooner if the price of oil did not increase. He stressed
that a sustainable system was in the best interest of the
state and the trust's beneficiaries. He turned to slide 18
related to recidivism. He stated that one of the best
opportunities to reduce long-term budget demands was by
investing in proven strategies to reduce criminal
recidivism. He spoke to other states such as Texas that had
been successful in curbing recidivism and avoiding future
prison construction. He moved to slide 19 titled
"Disability Justice...Investing Wisely?" The slide included
a historical chart projecting that the state would need to
open a prison in 2012; it had opened a prison right on
schedule. He detailed that the state was on the path to
open another prison in a couple of years. However, the red
line showed a way to match the prison population to the
available beds, but it would require a data driven,
evidence-based approach to implement strategies, constantly
monitor the results, and fine tune the strategies to ensure
the desired results were achieved. He stated that unlike
Bring the Kids Home, if the state failed at the recidivism
effort there would be significant state liability. The
trust believed that Medicaid expansion was one of the
state's best opportunities to pay for many of the services.
Mr. Jessee looked as slide 20 related to recommendations
associated with recidivism:
· Maintain efforts of current policy and program efforts
o 2014 SB64 passed and created Alaska Criminal
Justice Commission
o 2014 HB266 Legislative intent: workgroup formed
to develop Recidivism Reduction Plan (to be
delivered Feb. 2, 2015)
o 2007 Criminal Justice Working Group
o 2005 Trust disability justice focus area
Mr. Jessee elaborated that the Alaska Criminal Justice
Commission was looking at things like barrier crimes,
levels of sentences, and other. He referred to a statement
by Representative Craig Johnson that it was necessary to
assess "how mad we are, and how afraid we are of people"
because those were the reasons for incarceration. He
believed the state needed to look at what it could do to
address the issue. He stated that the state may have become
tougher on crime, but it may not have gotten smarter. He
discussed that Co-Chair Neuman had been integral in
developing HB 266 in 2014, which encompassed legislative
intent to form a workgroup to develop a recidivism
reduction plan. He opined that the bill represented a leap
in conceptual thinking. He elaborated that in the past the
state had looked at criminal justice in terms of the
Departments of Corrections, Law, and other. The bill
recognized that it was not necessarily these departments
that would be leading the charge to keep people out of
prison. He recognized that DOC had a significant role while
people are incarcerated, in treatment services, and in
supervised release. He stressed that most prisoners were
not released into supervision; the bill's intent language
recognized three things to keep recidivism down including
housing, employment, and support for recovery. He
elaborated that the intent language had included various
agencies including AHFC, the Department of Labor and
Workforce Development, the Department of Health and Social
Services (DHSS), and AMHTA. The trust was hopeful that the
Recidivism Reduction Plan would start to give the
legislature a road map on how to approach the issue.
Co-Chair Neuman asked for verification that DOC and the
Department of Public Safety would be included. Mr. Jessee
agreed. He continued to address slide 20. The Criminal
Justice Working Group was an administration-led effort to
pull the Court System together with commissioners to look
at the criminal justice system from an inside perspective
and at what could be done to make things more efficient and
effective. Lastly, there had been a trust disability
justice focus area since 2005. He stated that there was a
crescendo that was matching the exigency felt by the
legislature related to the budget and the looming prospect
of another prison or major expenditures for out-of-state
housing of prisoners.
2:01:03 PM
Mr. Jessee discussed broadband on slides 21 and 22. He
relayed that the trust had been asked to assess the
potential impact of expanded broadband use on the long-term
General Fund operating costs. He detailed that the trust
had begun to look at the statewide tribal health and K-12
education systems and at opportunities for partnerships. He
had met with the chief operations officer of the Tribal
Health Consortium and subsequently with all of the chief
investment officers from all of the health corporations. He
had reported to the group that the state's broadband study
had indicated another broadband system was needed. He
stated that many of the telemedicine services were in the
tribal organizations' "health wheelhouse." He had asked the
organizations about opportunities for partnership to try to
use some of the resources together. He relayed that the
organizations had been receptive. He had learned that
currently the technology and broadband capacity was not as
much an impairment to expanding telehealth as program
development. He stated that it was not just the technology
any longer, it was getting the programs developed in order
to have billable hours to handle electronic records
properly. He stressed that the state was lagging in
programmatic infrastructure development.
Mr. Jessee discussed that the education system also had
access to broadband. He addressed opportunities for
partnership. For example, Alaska Children and Family was an
Anchorage agency that had reached out to upper and lower
Kalskag in the Yukon Kuskokwim region to offer remote
telehealth services for children with severe emotional
disturbances. He elaborated that it used a combination of
occasional site visits in addition to the use of
telemedicine to check in with the child and family on a
regular basis. He noted that there had been no extra state
broadband capacity in the region, but it had been available
in the school. Therefore, the services had been included in
the child's independent education plan for special
education, which had allowed the Anchorage agency to have
access to the broadband. He added that the situation had
been very successful. He spoke to better utilizing what was
currently available instead of reinventing the wheel. He
explained that some of the tribal funding systems and
education systems had limitations to what they could do. He
discussed that Alaska could not afford to maintain multiple
systems in rural Alaska and that some barriers may require
congressional action. He stressed the importance of getting
maximum utilization of the existing systems.
2:05:36 PM
Mr. Jessee turned to slide 23 that addressed substance
abuse prevention and treatment:
· The prevalence rates and negative consequences of
alcohol and drug abuse upon Alaskans are substantial.
· In 2010, Alaska's costs associated with individuals
dependent on or abusing alcohol/drugs was $1.2
billion.
Mr. Jessee offered to provide the committee with a copy of
the McDowell Group report on substance abuse prevention and
treatment. He moved to slide 24 and discussed collaboration
on joint strategies. He highlighted Recover Alaska, an
initiative by the Rasmuson Foundation; the Mat-Su Health
Foundation; and the Denali Commission. Additionally,
judges, advocates, providers, and tribal groups had pulled
together to look at how the private sector may contribute
to reducing the impact of alcohol abuse in the state. He
discussed the Alaska Wellness Coalition, which was starting
a positive social norms campaign. He referred to a recent
commercial about a man with throat cancer. He relayed that
scientific research was pointing to the effectiveness of
positive approaches. For example, children wanted to be
normal. He pointed out the effectiveness of educating
children that most kids do not drink and most kids do not
smoke. He spoke to a kid's perception that "everybody's
doing it and if everybody's doing it then I should be doing
it." He believed the positive approach would be interesting
to see. He added that when the State of Washington had
evaluated a variety of intervention strategies for cost-
benefit analysis, it had evaluated the Scared Straight
program. The program took children who got into trouble
into prisons or other to try to scare them away from
committing crimes. He relayed that the program had actually
increased criminal behavior. He discussed that the
evidence-based practice was an evolving area.
Mr. Jessee briefly highlighted the Alcohol Beverage Control
Board and the implementation of Proposition 2 (marijuana).
He believed the implementation would present one of the
largest social challenges to the state. He highlighted the
lower portion of slide 24:
· Partnership with Department of Corrections on the
recidivism reduction planning with opportunities for
Trust investment in:
o Prisoner re-entry coalitions
o Access to effective treatment
o Prevention strategies focused on incarcerated
parents and their children
Mr. Jessee hoped committee members would have the chance to
hear DOC Commissioner Taylor discuss the work the
department was doing in the area. He stressed that under
prior administrations the services had been decimated. He
noted that the department was working hard to rebuild the
programs related to the reduction of recidivism.
2:09:59 PM
Mr. Jessee discussed Title 4 on slide 25. He addressed that
a couple of years earlier the legislature had decided that
the Alcohol Beverage Control Board should be moved from the
Department of Public Safety to the Department of Commerce,
Community and Economic Development. He noted that the trust
had lost the argument. He stated that the effort had
revealed that the state's Title 4 statutory framework had
not been reviewed for some time and had developed in a very
haphazard manner, usually by a special interest getting a
legislator to sponsor legislation to get around the
population base licensing limits by creating new license
types (e.g. recreational site licenses, remote military
contractor license, and that only a florist could deliver
alcohol to a hotel room). He relayed that it was positive
that the trust partnered with the ABC Board and a group of
over 60 people from industry, public health, and public
safety to address how to simplify and decrease the number
of license types, update the fees to support the ABC
budget, realign the system to better enforce population
limits, and bring all of the licenses, endorsements, and
permits into one place in statute.
Mr. Jessee furthered that there were areas of common ground
with industry (slide 27). The trust agreed with industry
that a limited entry system was in everyone's best
interest; it protected the value of industry's business and
it was in the trust's interest because it limited the
number of outlets. He stated that the current system of
dealing with underage drinking was broken. He discussed
current consequences such as suspension of a driver's
license, mandatory community service and treatment. He
furthered that the courts had required a higher level of
due process because of the consequences; therefore, the
police had to write an entire report. He continued that
from a police officer's perspective it was discouraging on
a Friday or Saturday night to have to write a report when
they needed to get back out to patrol; therefore, sometimes
the report was not written. He spoke to inconsistent
enforcement related to the issue. He added that because the
citations were issued in adult court they stayed on the
individual's record forever, which impacted military
service, scholarships, and other. He addressed underage
drinking revisions on slides 28 and 29. The goal was to
reform underage drinking sanctions to hold adults providing
alcohol to minors accountable. He discussed that the
recommendation would be to change the punishment to a
straight $500 fine; if the fine was not paid, it would be
garnished from an individual's Permanent Fund Dividend
(PFD). The trust believed the change would lead to more
consistent enforcement. Additionally, the trust thought
some parents would be more concerned about their child
losing a portion of their PFD than with drinking. The trust
did not want to make the offenders criminals. He added that
the fine could be applied to treatment. He remarked that
tickets would help identify individuals receiving multiple
tickets.
2:14:43 PM
Mr. Jessee mentioned local option revisions on slide 30. He
moved to slide 31 related to marijuana. He stated that the
substance was not safe or good for people. He had recently
been in Colorado learning about challenges it had with
legalization, specifically around edibles and concentrates.
He noted that there was substantial work to be done.
Co-Chair Neuman thanked Mr. Jessee for his presentation. He
referred to budget item recommendations. He wondered if the
items were currently in the governor's budget. Mr. Jessee
believed some were and some were not. He did not have the
detail at present. He had not seen the final budget detail.
Co-Chair Neuman referred to the discussion on telemedicine.
He remarked that internet access was available throughout
most of Alaska. He discussed the use of telemedicine for
alcohol treatment programs and other. He mentioned drug
testing and wondered if there were databases the state
could access that would reduce costs. Mr. Jessee provided
an example related to electronic breathalyzers that
connected to the internet and provided proof an individual
was not intoxicated. He stated that the technology existed
and could be expanded to any village.
Representative Gattis shared that she owned a farm and
tried to help people out; the farm was located 55 miles out
of Wasilla. She spoke to challenges with taking off time to
drive an employee 55 miles for drug testing. She wondered
how businesses could access electronic drug testing to make
things easier.
Mr. Jessee noted that urine tests were more complicated
because it was necessary to be tight on the sampling. He
discussed that with the FaceTime breathalyzer it took away
the error rate of the urine test. He reasoned that the
entrepreneurial spirit would start when the state became
committed to maximizing the technology. He questioned
whether a consideration would be involving local clinics.
Co-Chair Neuman remarked that there were many options that
did not involve sending state employees out to do the work
related to individuals on probation or to investigate
things like Medicaid fraud. He reasoned that the resources
were available statewide, but they were not being utilized.
He had been working with DOC and others on making progress
on the issue.
2:21:09 PM
Mr. Jessee wondered about utilizing the Office of
Children's Services. He spoke to the opportunity for social
workers to better handle their caseloads through the use of
videoconferencing on a more regular basis. He observed that
there were many opportunities available.
Vice-Chair Saddler pointed to slide 15 related to Medicaid
expansion. He referred to testimony earlier in the day from
the Division of Juvenile Justice that incarcerated
juveniles were not eligible for Medicaid. He asked for
verification that incarcerated adults were eligible for
Medicaid. He wondered about the reason for the discrepancy.
Mr. Jessee answered that his understanding was that the DOC
adult population would have some eligibility. He did not
have information about juveniles.
Vice-Chair Saddler asked if adult prisoners were currently
eligible for Medicaid. Mr. Jessee replied in the negative.
Vice-Chair Saddler wondered if people in other states who
were beneficiaries of the trust were benefitting from
Medicaid expansion. Mr. Jessee replied in the affirmative.
He elaborated that part of the work the contract would do
in conjunction with departments would entail looking at the
states that had maximized the value of Medicaid expansion
to serve the trust's beneficiaries and to contain state
healthcare costs.
Co-Chair Neuman stated that the previous year if the DOC
commissioner had been asked whether Medicaid could cover
inmates the answer would have been no; however, if a
prisoner was outside a prison for more than 24 hours they
may qualify. He provided an example related to a pregnant
woman who had been in jail with an expensive and difficult
pregnancy. The jail had taken her outside the prison gate
23 hours before she had given birth; she had then been
taken to the hospital to deliver the baby. He relayed that
Medicaid had paid for the entire cost. He asked for
verification that his understanding was accurate.
Mr. Jessee agreed.
Co-Chair Neuman discussed the concept of pre-eligibility
for Medicaid assistance for inmates in order to prevent
people from falling through the cracks. He spoke to
significant costs to the state for covering healthcare of
prisoners. He spoke to the benefit of working to increase
healthy lifestyles. He remarked on the percentage of
inmates who were AMHTA beneficiaries.
Mr. Jessee noted that the figure was 65 percent.
Co-Chair Neuman remarked that the trust had a huge interest
in reducing recidivism and the cost.
2:24:35 PM
Mr. Jessee stated that corrections had acted as a national
leader because of its work to prequalify people for social
security before they left the correctional institution. He
remarked that half of recidivism occurred in the year
following release from prison; therefore, it was a huge
advantage if a person was already eligible for services
when they left prison.
Representative Gara clarified that he and many other
legislators had not voted to move the ABC Board from DPS to
DCCED. Mr. Jessee apologized for the broad statement.
Representative Gara referred to Mr. Jessee's three
categories of funds the state would become eligible for if
it accepted Medicaid expansion. The categories included
people with substance abuse problems, people facing
homelessness, and prisoners. He wondered how Medicaid
expansion would help people in ways that they were not
currently benefitted.
Mr. Jessee answered that in the past, single adult males
between the ages of 18 and 65 (even if they were low
income) did not qualify for Medicaid. He detailed that
single adult males between the ages of 18 and 65, were a
big part of the homeless and substance abuse populations.
He believed that DHSS and DOC could provide better
information on Medicaid expansion eligibility.
Representative Gara asked if single females who were
homeless or had substance abuse problems were currently
covered by Medicaid. Alternatively, he wondered if Medicaid
coverage only applied to single women with a child. Mr.
Jessee replied that single women with a child were covered
by Medicaid.
Representative Gara asked for verification that single
adult females who were not pregnant and did not have a
child would become eligible. Mr. Jessee deferred the
question to the administration.
Representative Gara remarked that he would continue to look
for an answer to inmates. He noted that he had not yet
received an answer.
Vice-Chair Saddler asked about slides 23 and 24. He
referred to Mr. Jessee's testimony that substance abuse was
a difficult issue in many of the small rural Native
communities. He wondered if there was evidence of a
correlation between the size of a village and the rate of
substance abuse. He wondered if a larger village had a
lower rate of substance abuse. Mr. Jessee was not aware of
any specific data. He believed substance abuse was evenly
spread between communities.
Vice-Chair Saddler asked if any conclusions related to
substance abuse could be drawn between rural communities
and larger cities such as Anchorage, Fairbanks, and Juneau.
Mr. Jessee believed there were cases where the impact in
smaller communities was more immediate on the sense of
community, in comparison with a larger community where
problems could be isolated to specific neighborhoods.
2:28:39 PM
Representative Munoz discussed that she had recently met
with representatives from the National Alliance for the
Mentally Ill (NAMI). She explained that the organization
held trainings throughout the state to help families cope
with mental illness in their families. She stated that the
organization was currently struggling for funding. She
asked if AMHTA had opportunities to support families.
Mr. Jessee replied in the affirmative. He elaborated that
the trust's Beneficiary Projects Initiative had worked with
NAMI Alaska; the trust had provided NAMI with a grant that
had allowed it to establish the organization statewide.
Additionally, the trust had recently provided a $10,000
grant for a NAMI training.
Representative Munoz asked whether the trust was working
with legislators or the administration on the underage
drinking revisions. Mr. Jessee replied that a bill was
currently being drafted. He did not believe a final
decision had been made on how to bring the bill forward. He
noted that the bill would have support from many people.
Representative Edgmon commended the board for its
conservative approach and long-term planning. He lauded the
trust for recognizing the state's declining revenues the
past September. He asked for further detail about the
dramatic increase (from 42 to 65 percent) in AMHTA
beneficiaries in the state's prison system.
Mr. Jessee replied that the evaluation of the trust's
beneficiaries in the correctional system had been an
evolving strategy. The department was getting better at
assessing incoming inmates and was getting better at
identifying trust beneficiaries at the frontend and in
developing programming for the individuals. He did not
believe there were more beneficiaries in the prison system,
but the department had improved its ability to identify the
individuals as trust beneficiaries.
Representative Edgmon had been told in a recent DOC budget
subcommittee meeting that based on a several year report,
the trust had begun to include substance abuse inmates in
the definition of trust beneficiaries. Mr. Jessee answered
in the affirmative and added that the definition had been
expanded as well.
2:31:58 PM
Co-Chair Neuman referred to Mr. Jessee's testimony on
tribal health partnerships. He spoke to the goal of getting
the juvenile justice system into the hands of local control
(taking them out of state agencies and moving them to
tribal control where better funds were available). He
believed tribal organizations understood the local and
regional issues better and provided better outcomes. He
noted that as the legislature worked to reduce the
operating budget it made sense to transfer the
responsibility of services.
Mr. Jessee pointed out that the Division of Juvenile
Justice was a very successful agency. He detailed that the
division had been at the forefront of incorporating trauma
informed treatment and care in its facilities; it had
dramatically decreased seclusion and restraint. He hoped
that skills the division had acquired would be disseminated
to other agencies if they were involved.
Co-Chair Neuman discussed unmeasurable effects of substance
abuse including sexual assault, domestic violence, and
other that impacted individuals for a lifetime and cost the
state a considerable amount of money.
Mr. Jessee he agreed that working "farther upstream" and
looking at adverse childhood experiences to build
resilience for kids when they are young was the best long-
term investment to make.
Co-Chair Neuman advised committee members to use Mr. Jessee
as a resource. He thanked Mr. Jessee for his presentation
and the work done by the committee.
2:35:51 PM
AT EASE
2:37:54 PM
RECOVENED
^FY 16 BUDGET OVERVIEW: DEPARTMENT OF EDUCATION AND EARLY
DEVELOPMENT
2:37:54 PM
Co-Chair Neuman recognized former Representative Bill
Thomas in the committee room.
MICHAEL HANLEY, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT (DEED), provided a PowerPoint
presentation titled "Alaska Department of Education and
Early Development FY2016 Budget Overview" dated January 28,
2015 (copy on file). He communicated that the department
was slightly unique because the State Board of Education
and Early Development was the head instead of the
commissioner. He relayed that the commissioner was
appointed by the state board and approved by the governor.
2:38:50 PM
Commissioner Hanley outlined DEED organizational chart on
slide 2. He noted that the department's structure was
relatively small and was made up of five divisions. He
highlighted Teaching and Learning Support, School Finance,
and Administrative Services as the core functions of the
department. Other divisions included Mt. Edgecumbe High
School and Libraries, Archives, and Museums. The department
also housed the Alaska State Council on the Arts,
Professional Teaching Practices Commission, and the
Commission on Postsecondary Education. He noted that the
boards had some autonomy from the department.
Commissioner Hanley spoke to the department's statutory
responsibilities on slide 3. The state's constitution
specified that the legislature was required to establish
and maintain a system of public schools, which was largely
conducted by DEED with the legislature's authorization; the
funding component remained with the legislature.
Statutorily the purpose of education was to help ensure
that all students would succeed in their education and
work. He added that the new buzz term for the concept was
"being college and career ready." He addressed the
department's mission to ensure quality standards-based
instruction to improve academic achievement for all
students (slide 4). He addressed the department's four core
services beginning with public school funding. He
elaborated that the department's budget was approximately
$1.7 billion (the second largest in the state budget); it
had the responsibility to ensure that the funding was
appropriately distributed. The second core service was
providing fiscal accountability related to how funds were
utilized within districts. Third, the department assisted
districts by providing programs. Fourth, it partnered with
state and private organizations to provide services to
enhance education in the state. Examples included, the
Alaska Native Science and Engineering Program (ANSEP), Best
Beginnings, and other.
2:42:12 PM
Commissioner Hanley addressed division details beginning on
slide 5. The largest was the Division of Teaching and
Learning Support. The division accounted for 14.7 percent
of the DEED budget and was responsible for making sure
funding went to the appropriate location in an effective
and efficient way. The Division of School Finance and
Facilities monitored and worked with the bulk of the
funding going out to school districts including funds for
transportation, the Base Student Allocation (BSA), debt
reimbursement, and other. The Division of Administrative
Services accounted for 0.3 percent of the department's
budget (slide 6). Heidi Teshner headed the division, which
was responsible for making sure the work done within the
department was done appropriately and that funds were
accounted for. The Division of Libraries, Archives, and
Museums represented 1 percent of the department's budget.
The department was excited about the upcoming completion of
the State Library Museum Archives (SLAM) building, which
would consolidate three locations into one. He noted the
building would create substantial efficiencies.
Representative Wilson asked for clarification on the budget
percentages. He wondered if the foundation formula was
included in the percentages shown in the presentation.
Commissioner Hanley replied that the percentages only
included agency operations.
HEIDI TESHNER, ADMINISTRATIVE SERVICES DIVISION, DIRECTOR,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, corrected
that the percentages included the K-12 foundation formula
and everything else.
Representative Wilson requested a breakout of the
department expenditures excluding the foundation formula.
Commissioner Hanley added that the presentation included
slides breaking out the formula and agency funds. The Mt.
Edgecumbe Boarding School accounted for 0.7 percent of the
department's budget (slide 7). He mentioned the Alaska
State Council on the Arts, the Professional Teaching
Practices Commission, and the Alaska Commission on
Postsecondary Education (ACPE). He detailed that ACPE
largely provided resources for students beyond the K-12
system; the agency provided loans and implemented the
Alaska Performance Scholarship (APS). The Office of the
Commissioner employed five full-time positions that worked
to provide the department's direction (slide 9).
Commissioner Hanley addressed key performance measures on
slides 10 and 11. Slide 10 included a chart depicting the
statewide four-year graduation rate. He noted that although
the agency had strong local control, it was difficult for
the department to have a direct impact; however, DEED
worked alongside districts to empower them to make a
difference. The graduation rate had slowly increased and
was currently 71 percent (there had been a slight decrease
in the past year). He noted that further work was needed as
71 percent was not satisfactory. He moved to a chart on
slide 11 that showed APS eligibility and year one
utilization. The large bronze colored bar indicated the
number of graduates, the middle bar indicated eligible
graduates, and the smallest bar indicated the number of
students eligible for the APS. The department was seeing a
higher percentage of students accepting the scholarship. He
considered the increase a success, given that students
qualifying for the highest level scholarship typically had
other options for colleges and universities nationwide.
2:47:58 PM
Representative Kawasaki observed that the total number of
students receiving the APS appeared to be declining. He
asked for an explanation. Commissioner Hanley answered that
it was more accurate to consider the percentage. He
explained that the number of graduates was also declining;
even though the graduation rate remained fairly consistent,
there were fewer students. The percentage of students
accepting the APS was remaining relatively the same at
about 11 percent.
Commissioner Hanley turned to a pie chart on slide 12 that
showed the department's total employees. The largest
portion of the pie was made up of 126 employees housed in
the Goldbelt Building in Juneau. The department had a total
of 360 employees. The Division of Libraries, Archives, and
Museums had 65 employees, ACPE had 106 employees and worked
largely off of receipts, and Mt. Edgecumbe had 55
employees.
Co-Chair Neuman asked the department to avoid the use of
acronyms on its slides. Commissioner Hanley explained that
Educational Support Services (ESS) and Teaching and
Learning Support (TLS) fell under the Goldbelt category. He
listed the divisions and their acronyms: Libraries,
Archives, and Museums (LAM); Professional Teaching
Practices Commission (PTPC); Alaska Commission on
Postsecondary Education (ACPE); and Alaska State Council on
the Arts (ASCA).
Co-Chair Neuman asked about the percentage of students who
went to high school and later completed a four-year college
program. Commissioner Hanley did not have the specific
details. He discussed that with a 71 percent graduation
rate, the state had one of the lowest college and career
going rates in the country. He added that the number of
college students graduating in six years was also not as
high. He believed the issue was a focus for ACPE, the
university, and DEED.
Co-Chair Neuman surmised that the number was less than 10
percent. Commissioner Hanley agreed.
Co-Chair Neuman believed the low rate contributed to the
importance of vocational education programs.
2:52:18 PM
Representative Wilson asked how many students had received
the scholarship since the program's beginning and were
still on the path to graduating from college in four years.
Commissioner Hanley replied that the APS report had just
recently been completed by ACPE. He relayed that the report
would be available in the near future. He did not have the
number on hand.
Representative Wilson noted that the data in the
presentation only included the first year. She wondered how
many students remained in the second, third, and fourth
years. Commissioner Hanley agreed that it was an important
statistic.
Co-Chair Neuman requested a copy of the information when it
was available. Commissioner Hanley affirmed that he would
provide the committee with the report from ACPE when
available.
Representative Gara addressed that ACPE ran the student
loan program. He remarked that the state was having
difficulty getting people careers either through college or
job training programs. He noted that the load applied to
both scenarios. He detailed that the federal loan rate was
4.6 percent and a used car loan was 3 percent or lower,
whereas the state loan rate was 6.6 percent. He wondered
why the rate was so high and asked if the department had
plans to do anything about it.
Commissioner Hanley agreed that the rate was high and was
probably a disincentive for many students. He noted that
his two children had found better rates for college loans.
Co-Chair Neuman thought the percentage was in statue.
Representative Gara believed the percentage was in
regulation.
Commissioner Hanley deferred the question to the director
of ACPE for further detail.
Co-Chair Neuman remarked that the legislature had worked on
using the state's bonding agency to get very low interest
rates the previous year. He thought if the effort could be
combined for postsecondary education loans the rate could
be as low as 3 percent. He believed there were
opportunities that existed.
Representative Gara noted that the bonding bill would
reduce the rate by slightly less than 1 percent, which
would still be high. He relayed that he had a bill, but was
waiting for a proposal from the department to lower the
rates.
2:55:23 PM
Co-Chair Thompson asked about the graduation rate for
students taking longer than four years to graduate. He
asked about the percentage of students who received GEDs.
Commissioner Hanley replied the graduation rate was only
slightly higher for fifth and six-year students. He
remarked that the goal was to move students through high
school efficiently in a period of four years. He believed
students taking longer than four years to graduate
represented a success story because they had stayed engaged
to get their degree. He communicated that the GED was
operated through the Department of Labor and Workforce
Development. He did not have the data on hand.
Co-Chair Thompson asked the department to follow up on his
question related to the GED.
Representative Guttenberg asked how the state tracked
students who left the system (e.g. students who moved,
joined the military, or other). He did not believe the
department tracked the students. He wondered if there had
been further efforts to track the students.
Commissioner Hanley replied that the department tracked the
information to the best of its ability. Absent a request
for records the department did not know what happened to a
student who stopped coming to school; DEED did not track
the students down. He added that typically a student who
dropped out of high school did not qualify for the
military; the qualifications were increasing.
2:58:41 PM
Vice-Chair Saddler referred to the 71.8 percent graduation
rate in 2013. He wondered if the rate was Alaska's highest
rate and how it compared to other states.
Commissioner Hanley replied that he believed it was the
highest rate the state had achieved. He noted that the
number was slightly lower than other states. However,
Alaska was one of about 23 states that had a high stakes
exit exam; therefore, when compared in that regard, Alaska
was slightly higher. He believed that with the removal of
the High School Graduation Qualifying Exam he anticipated
that the graduation rate would improve by up to 10 percent.
He expounded that the removal of the qualifying exam was
removing a barrier to graduation and the resulting increase
would mean success had been achieved. However, it did allow
the department to compare the state nationally to states
without high stakes exams.
Vice-Chair Saddler asked if there was a statewide target to
reach a graduation rate of 80 percent by 2020. Commissioner
Hanley replied that the target was 90 percent by 2020.
Vice-Chair Saddler commented that a significant portion of
the increase could come with the removal of the exit exam.
Commissioner Hanley replied that he had never brought the
topic up when discussing the exit exam because he thought
it was time for the test to go. He believed it acted as a
barrier for too many of the state's students. He agreed
that it would improve the graduation rate, but that was not
the reason to remove the exam. He had wanted to prevent the
topic from driving the conversation because it felt
artificial.
3:01:11 PM
Co-Chair Neuman did not believe any other state could have
an education system that was as diverse as Alaska's.
Representative Munoz spoke to the effect of the removal of
the graduation exit exam. She wondered if the graduation
rate data included the GED. Commissioner Hanley replied in
the negative. He explained that students who get their GED
had dropped out of high school and were no longer on track
to receive a diploma. He believed it was a success story
when a person continued on with their education to at least
receive their GED.
Representative Munoz looked at slide 5 related to the
Division of Teaching and Learning Support. She referred to
the 89 budgeted positions and remarked that the figure
($237 million) represented a small portion of the overall
budget. She wondered if the money was passed through the
division to school districts. Ms. Teshner replied that 87
percent of the division's budget was federal money that
went to grantees.
Commissioner Hanley pointed to slide 13 showing a breakout
of the department's budget by core services. Public school
funding represented the majority of the budget. Budget
accountability and compliance included the department's
assessment programs. He highlighted that school
effectiveness programs accounted for 2 percent of the
department's budget and included the state system of
support, mentors, the literacy institute responsible for
training teachers in reading techniques, and the APS cohort
funded through ACPE. Active partnerships represented 4
percent of the department's budget and included the Arts
Council, Parents as Teachers, Best Beginnings, and ANSEP.
Commissioner Hanley moved to slide 14 related to the FY 16
work in progress budget, which included school debt
reimbursement totaling $128 million. The department's
budget was divided between the K-12 formula and agency
operations. The K-12 formula programs accounted for $1.4
billion of the $1.7 billion budget. He furthered that K-12
programs received $20 million in federal funds, while
agency operations received $211 million. Federal funding
included the child nutritional services program, Carl D.
Perkins Career and Technical Education Improvement Act,
Individuals with Disabilities Education Act, and No Child
Left Behind. He highlighted that 2 percent of the
department's budget was paid for with interagency receipts
from teacher certification and AMHTA funds.
Commissioner Hanley addressed an operating overview for all
funds on slide 15. He elaborated that 95 percent of the
funds went out in grants, 2 percent went to personal
services, and 3 percent went to contractual
responsibilities such as assessment contracts and contracts
for mentors and coaches.
3:06:07 PM
Commissioner Hanley turned to slide 16 related to agency
operations. He relayed that DEED agency operations only
accounted for 5 percent of general fund expenditures. A pie
chart on the right showed agency operations by fund source:
68 percent federal funds, 24 percent general funds, and 8
percent other funds.
Commissioner Hanley provided budget highlights on slide 17.
He spoke to forward funding of the K-12 foundation formula
and communicated that the governor had proposed shorting
the forward funding by 10 percent. He believed a
conversation would take place on the topic over the
upcoming weeks. He addressed K-12 boarding home grant
funding; HB 278 [education omnibus bill passed in 2014]
designated that the DEED commissioner would annually open
an application period for new boarding home programs
(previously it had been at the commissioner's discretion).
He communicated that one program in Bethel had been
approved in the past year; the $736,100 request was before
the legislature. There had also been a slight increase to
the Nenana program. He detailed that the schools were
approved for a certain student count; the schools were
allowed to exceed the specified number, but the state did
not pay above the specific amount. He explained that
Nenana's program had been successful and had the capacity
to add students. The Alaska Higher Education Investment
Fund was a combination of the APS and the AlaskAdvantage
Education Grants. He elaborated that AlaskAdvantage was a
needs-based grant program. The two programs had a two to
one ratio (currently $500,000 for APS and $250,000 for
AlaskAdvantage).
Commissioner Hanley discussed the Professional Teaching
Practices Commission on slide 17. He relayed that the State
Board of Education, based on intent language from the past
year, had recently implemented a new regulation to increase
teacher and administrator certification fees. The intent
language spoke to the Professional Teaching Practices as
being self-sufficient and supported fully by fees from
education professionals. The proposal was currently out for
public comment and would change the five-year, $125
certification fee to $200. The adjustment had been
determined by what it would take to make the Professional
Teaching Practices Commission self-sufficient. He noted
that the department was receiving numerous comments from
teachers on the proposed change. The Alaska Learning
Network (AKLN) one-time funds from the previous year had
been included again in the governor's proposed budget. The
funds had been $850,000 the previous year; he anticipated
that as the administration moved towards reducing its work-
in-progress budget, he believed the number would be reduced
slightly to allow the program to continue more efficiently.
He shared that the program was increasing advanced
placement classes and was increasing training for teachers
providing the advanced classes. The department was
finishing up an Alaska studies course that was required for
high school graduation. He believed it could be the "go-to"
course as opposed to having districts using one of their
own teachers to teach the course. The course implementation
had been delayed because cultural knowledge had been
incorporated; a good portion of the course was a gaming
platform. He elaborated that the department was working to
ensure that the interaction was all culturally accurate. He
believed the course would be a tremendous asset. The
learning network recognized that districts had to allow
students to test out of courses; the department believed
AKLN could offer some of the courses to save districts from
developing their own.
3:11:53 PM
Commissioner Hanley continued to address slide 17. He
explained that if a student knew the first half of a
course's material, but did not receive the score needed to
test out, the student could have the option of taking only
the second half of the course. He believed it greatly
supported districts and saved them from developing some of
the assessments.
Ms. Teshner addressed slide 18 that pertained to the FY 16
governor endorsed budget. She noted that the amended budget
would be published sometime the following week. The slide
showed that the department would receive a 5 percent
reduction from the work-in-progress budget: a $2.8 million
reduction for non-formula programs, and a $9.4 million
reduction from formula programs. She elaborated that
decrements to foundation programs, pupil transportation,
and special schools were driven by the updated projected
need based on student counts. She reiterated that the
reductions would be reflected in the governor's amended
budget. Slides 19 through 23 had been provided by the
Legislative Finance Division. She pointed to a bar graph on
slide 19 pertaining to non-formula general funds: the
purple bars represented the department's budget and the
blue line represented the percent of the DEED budget
compared to the total agencies' budgets. For example, DEED
had represented 2.2 percent of the statewide budget in the
FY 15 management plan.
Ms. Teshner remarked that the graphs on slides 20 through
22 were distorted because they included the K-12 aid to
school districts. She elaborated that the inclusion of the
aid to school districts made the other items appear to be
flat funded. She pointed to a funding spike in aid to
districts in FY 15, which was caused primarily by one-time
increments in the FY 15 through FY 17 budgets. She
explained that the governor was removing the FY 16 and FY
17 one-time items.
Commissioner Hanley added that the reduction in FY 16
reflected the removal of one-time funds that had been in
the FY 15 budget. He stated that the budget had increased
over the past ten years, but the funding had gone to
students; the remainder of department expenditures had
remained relatively flat.
Ms. Teshner addressed slide 21. She detailed that the
purple line represented Teaching and Learning Support,
which had increased slightly. The chart on slide 22
reflected all formula programs, general fund. Slide 23
represented agency operations (all non-formula programs).
She noted that the slide showed how each of the components
had changed. She pointed to a green line associated with
Alaska Library and Museums and explained that the increase
resulted from a $5 million increment for broadband, which
had been provided by HB 278 the prior year.
Co-Chair Neuman asked for a brief update on the lawsuit the
Ketchikan Gateway Borough had brought against the State of
Alaska. Commissioner Hanley replied that a press release
had been published earlier in the day specifying that the
state would appeal the case to the Alaska Supreme Court;
the state had also requested a stay until the completion of
the appeal. He could not elaborate on specific details due
to the active status of the litigation. He discussed that
the judge had not declared that local contributions were
unconstitutional or illegal; the problem was the
methodology Alaska used that determined the fund as
dedicated. The department disagreed with the ruling and was
appealing. He was not suggesting that the state should do
anything differently; he anticipated it would be granted
the stay and that it would have the opportunity to argue
the case before the state supreme court. He believed it
would be one to two years before anything was decided.
Co-Chair Neuman asked what would happen if Ketchikan won
the lawsuit.
Commissioner Hanley answered that it would be up to the
legislature to determine the options. He detailed that the
judge had clearly stated in his finding that the state was
not obligated to take full responsibility for funding
education and that it was acceptable to request local
contributions. He furthered that there was not a
requirement to suddenly replace the $200 (plus) million
that was under discussion in the case. However, there would
need to be decisions made about what the state would do
next, whether the legislature would change the way the
formula worked, recognizing the responsibility for an
equalized formula. He spoke to digging into conversations
about how the formula was done and how the funds were
collected.
3:19:08 PM
Co-Chair Neuman believed it was prudent to have a plan in
place to prepare for the ruling.
Representative Guttenberg referenced the commissioner's
earlier testimony related to boarding schools and Nenana;
specifically that a boarding school's funding was set at a
precise student count. He detailed that a school could
increase its number of students, but to receive increased
funding they had to come back to the department for
approval. He wondered if the issue was outlined in statute
or regulation.
Commissioner Hanley believed the issue was outlined in
regulation.
Co-Chair Neuman thought the issue was in statute (resulting
from legislation sponsored by Senator John Coghill).
LES MORSE, DEPUTY COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, replied that the programs operated under
an approved application through the department. Schools had
come to the board in the past to request increased beds;
the board could increase the beds, but increased funding
required legislative approval.
Representative Guttenberg commented that Nenana had an
existing boarding school and Bethel was opening a school.
He discussed that the Nenana school had a specific number
of beds and students. He wondered what would happen to the
funding level if the number of students increased. He
wondered if the school was reimbursed. He did not want to
hinder the success of programs.
Commissioner Hanley did not believe it was a hindrance. The
schools presented their desired number of students, which
was approved by the department. He opined that it was
healthy to understand the desired number in order to
discuss increments. He elaborated that a school needed to
make an intentional decision to increase its number of
students and the decision needed to be communicated to the
department. He added that there had never been much of a
delay in the process; the school could go directly to the
board and then the request would go to the legislature the
following session. He concluded that the department did not
fund above what it had already approved.
3:22:33 PM
Representative Gara hoped numbers would be run through
school districts prior to the finalization of the
governor's budget. He cited that according to Legislative
Research Services the state had lost over 600 teachers and
staff from FY 11 to FY 14. He stated that under the
legislature's plan (without the governor's amendments),
Fairbanks was facing between 35 and 70 layoffs, Mat-Su was
roughly $3 million short in the next school year of meeting
the current level of education, and Anchorage expected to
lose an additional 200 to 220 teachers and staff. He
stressed that the department had proposed to cut the
funding even more. He wondered how educational achievement
would increase with the numerous staff cuts. He asked if
the department would speak to school districts before
finalizing the proposal.
Commissioner Hanley replied that the numbers he had
discussed with superintendents in Mat-Su and Anchorage were
different than those mentioned by Representative Gara.
Nonetheless, it was easy to quantify what a $32 million cut
would do to school districts. He furthered that the
department had broken the data out by school district; the
cuts would also impact local contributions. He expounded
that when the state removed a certain portion for districts
receiving local contribution it had a multiplier effect.
The department had been asked to present a 5 percent and 8
percent cut; it had provided the data, recognizing that it
did not represent 5 to 8 percent of DEED's overall budget.
He continued that the cut represented $2.8 million. He
stated that if deeper cuts were desired the cuts would come
from money the department provided to school districts. The
department had discussed the cost to students, jobs,
communities, and other. He knew the governor was not happy
about what he put forward; but the governor felt it was his
responsibility to do so in order to lead the way towards
living within the state's means. He recognized it was not a
cut anyone wanted to make; he was well aware of the
implications and the impacts that the cut would have. He
stated that the department's budget had increased steadily
over years. He also had great concern over the cuts. He
relayed that the budget had been finalized and the
department was working on the numbers.
3:26:23 PM
Co-Chair Neuman noted that no one had expected the drop in
oil prices. He reasoned that if money was not available, it
could not be spent.
Representative Wilson referred back to the Ketchikan law
suit. She stated that it would not only be $220 million.
She believed impact aid would be figured differently if the
lawsuit was to be held. She remarked that the Fairbanks
North Star Borough received much more impact aid because it
paid into the system. She wondered how much the state would
be looking at. She referred to $190 million versus $220
million.
Commissioner Hanley agreed that to have the equalized
formula, impact aid was figured differently. There was no
way to know what the number would be without knowing the
next steps; it depended on what the legislature chose as
the next step and plan. He guessed that if the state did
nothing it would have to see about getting an equalized
formula.
Representative Wilson surmised that the state would keep
100 percent of the impact aid versus the percentage it took
currently. She asked for verification that there would be a
whole different way of calculating the formula because it
had more to do with the disparity versus the impact aid
itself. Commissioner Hanley believed Representative
Wilson's description was the concept at a high level;
however, meeting the requirements was a very complex
process.
Co-Chair Neuman believed that the information would be a
large part of the ongoing discussion when working to
establish where the state would be three to five years down
the road. He discussed the schedule for the following day.
ADJOURNMENT
3:29:02 PM
The meeting was adjourned at 3:29 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AMHT Overview HFIN 1-28-15.pdf |
HFIN 1/28/2015 1:30:00 PM |
|
| FY16 DEED HFIN Budget Overview 1_28_2015 FINAL.pdf |
HFIN 1/28/2015 1:30:00 PM |
|
| DEED Agency Operations % by Division&Offices Response.pdf |
HFIN 1/28/2015 1:30:00 PM |
HFIN DEED Overview Response |
| DEED response 2013-2014 Cohort Grad Rates by District.pdf |
HFIN 1/28/2015 1:30:00 PM |
HFIN DEED Overview Response |
| HFIN Overview Follow-up Responses 01 30 15.pdf |
HFIN 1/28/2015 1:30:00 PM |
HFIN DEED Overview Response |