Legislature(2017 - 2018)HOUSE FINANCE 519
02/02/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB215 | |
| HB142 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 142 | TELECONFERENCED | |
| + | HB 215 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 2, 2018
1:34 p.m.
1:34:26 PM
CALL TO ORDER
Co-Chair Seaton called the House Finance Committee meeting
to order at 1:34 p.m.
MEMBERS PRESENT
Representative Paul Seaton, Co-Chair
Representative Les Gara, Vice-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Mark Neuman (Alternate)
Representative Lance Pruitt
Representative Cathy Tilton
MEMBERS ABSENT
Representative Neal Foster, Co-Chair
Representative Dan Ortiz
Representative Steve Thompson
Representative Tammie Wilson
ALSO PRESENT
Elizabeth Diament, Staff, Representative Paul Seaton; Jill
Lewis, Deputy Director, Division of Public Health,
Department of Health and Social Services; Jeannie Monk,
Vice President, Alaska State Hospital and Nursing Home
Association; Tom Chard, Chair, Sharp Council, State Loan
Repayment, Health Practitioner Support and Access, Juneau;
Representative Chris Tuck, Sponsor; Lennon Weller,
Economist, Department of Labor and Workforce Development;
Patsy Westcott, Chief of Unemployment Insurance, Division
of Employment and Training Services, Department of Labor
and Workforce Development; Caroline Schultz, Policy
Analyst, Office of Management and Budget; Trenton English,
Southeast Representative, Alaska Laborers, Juneau; Joshua
Gardner, Laborers 942, Juneau; Sydne Williamson, Carpenters
1281, Juneau; Kylee Larsen, Local 1281, Juneau.
PRESENT VIA TELECONFERENCE
Kate Glover, Legislative Legal, Juneau; Lance Nelson,
Ironworkers 751, Fairbanks; JD Wilkerson, Local 751,
Fairbanks; Dustin Swatek, PNWRCC, Anchorage; Ryan Andrew,
IBEW Local 1547, Anchorage; Kevin Macky, IBEW Local 1547,
Wasilla; Vince Beltrami, Alcsks AFL-CIO, Anchorage.
SUMMARY
HB 142 UNEMPLOYMENT COMPENSATION BENEFITS
HB 142 was HEARD and HELD in committee for
further consideration.
HB 215 DHSS: PUBLIC HEALTH FEES
HB 215 was HEARD and HELD in committee for
further consideration.
Co-Chair Seaton reviewed the meeting agenda.
HOUSE BILL NO. 215
"An Act relating to program receipts; and relating to
fees for services provided by the Department of Health
and Social Services."
1:36:03 PM
Vice-Chair Gara MOVED to ADOPT the proposed committee
substitute for HB 215, Work Draft 30-LS0673\O (Glover,
1/15/18).
Co-Chair Seaton OBJECTED for discussion.
ELIZABETH DIAMENT, STAFF, REPRESENTATIVE PAUL SEATON,
addressed the changes in the legislation. The bill would
amend AS 44.29.022(a) to grant the Alaska Department of
Health and Social Services the authority to collect fees to
support the administration of public health programs. She
stated that during the Finance Subcommittee process in
2017, The Division of Public Health had been identified as
a division that could be charging additional fees where
appropriate and reasonable to support its mission. She
stated that the division was not currently able to charge
fees for all its potential health related services. HB 215
would give the department the authority to charge fees for
any public health services provided under AS 18.05.010, and
Tobacco Control Programs under AS 44.29.020. The bill would
also consolidate all services listed under AS 37.05.14
provided by the department under one subsection.
1:38:31 PM
Ms. Diament addressed changes in the legislation. She
shared that during hearings in the previous committee a
stakeholder concern had been voiced considering public and
stakeholder input and the regulatory process. Basically, by
taking the discussion of charging fees out of the
legislative process and putting it into the regulatory
process, the public would not have adequate input in the
initial planning stages. She explained that within the
regulatory process, public comment came after the
regulations were drafted. She said that discussion had been
held during the interim, which had resulted in the crafting
of Section 3:
Section 3
(page 2, line 26)
Adds a new sub section to AS 44.29.022 requiring the
commissioner of health and social services to consult
with stakeholders, including at least one public
meeting, before a notice of proposed action is made
regarding the development of new fees under AS
44.29.020(a) (14) or AS 18.
She relayed that the department had already planned to hold
the meetings and that there was precedence in statute for
requiring meetings for setting fees in other situations.
Co-Chair Seaton asked if there were questions about the CS.
He WITHDREW his OBJECTION. There being NO OBJECTION, it was
so ordered.
1:40:12 PM
JILL LEWIS, DEPUTY DIRECTOR, DIVISION OF PUBLIC HEALTH,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, provided a
PowerPoint presentation, "HB 215 DHSS: Public Health Fees"
dated February 2, 2018 (copy on file). She relayed that the
division focused on services that protected the public's
health status through programs that protected that health
of every Alaskan and community. She stated that public
health services controlled infectious diseases, prevented
chronic diseases and injuries, promoted healthy lifestyles,
and protected maternal and child health. She spoke to Slide
2:
HB215 DHSS: Public Health Fees
? Public Health is able to charge fees for certain
clinical services:
? Maternal and child health services
? Nutrition services
? Preventive medical services
? Health education
? Public health nursing services
? Laboratories
Ms. Lewis relayed that the fees that the division could
collect were limited to the list on Slide 2. She turned to
Slide 3, which offered a pie chart that illustrated the
various funding sources for the division. She noted that
the red represented the general fund receipts and that the
pie slice that was slightly removed reflected the
approximately $7 million in fees currently collected. This
was out of the $117 million budget overall.
Vice-Chair Gara noted that the fiscal note specified that
the bill would raise $400,000 per year. He did not believe
it would replace the funding in an alcohol abuse treatment
fund and the tobacco fund, which were both at risk of
disappearing.
Ms. Lewis reported that the division did not receive funds
from the alcohol related fund but did receive funds from
the Tobacco Fund, approximately $8 million per year
(reflected on the slide) and over the last 6 years there
had been declining revenues in the tobacco fund. The
decline had prompted the division to join with partners in
reducing expenditures from the fund. She noted that there
was a $375,000 decrement in the FY 19 Governor's budget to
to help the sustainability of the fund in the long-term.
She expected that further reductions would be made in the
future to assure that the division spent within its means.
She said that the fees that would be collected would not be
part of the Tobacco Fund but would go into the General Fund
Program Receipts and would be redirected back into the
program that generated the fees.
1:43:55 PM
Representative Guttenberg Aske where new money was coming
into the division. He mentioned vaccine assessments and
wondered how they were being paid for. He probed the
details of who paid the fees.
Ms. Lewis responded that she would address the question as
she proceeded in her presentation. She had examples of
initial fees that would be pursued, identified services
that the division had not been able to provide due to lack
of revenue. She continued to Slide 4:
HB215 DHSS: Public Health Fees
? Public health lacks fee authority for other services
and
functions:
o Professional services
o Data extraction and analysis
o Training and expert consultation
o Administrative functions
o Inspections and certifications
o Program administration
She reiterated that the division currently lacked fee
authority for many services and functions and had look at
expanding clinical fee collections. She said that it had
been determined that the division was maximizing the fees
that it was able to collect and that the greatest
opportunity for additional fee collection was in
administrative functions and professional services.
1:46:41 PM
Ms. Lewis moved to Slide 5:
HB215 DHSS: Public Health Fees
? Fees waived if
? not in the public interest
? not economically feasible to collect
? undermines the division's public health mission
? Services not denied because of inability to pay
? Sliding fee schedules
? Limited to the actual cost
? Regulations required for each new fee
1:47:44 PM
Representative Neuman wondered about the waived fees. He
asked whether there were any indications of the fees being
waived more in one area of the state than another.
Ms. Lewis answered that the department was required to do a
state report on waived fees. She returned to Slide 2 and
stated that the fees for public health nursing services
were calculated on a sliding scale based on income.
Representative Neuman believed the issue was important. He
noted that there was currently much discussion about the
economy and that it was important to identify the "needier"
areas of the state. He cited Page 1 of the bill. He noted
that the program receipts were listed as dedicated receipts
- $8 million of $100 million - he wondered why they were
not fund coded as general fund program receipts so that the
legislature could more easily track the funds.
Ms. Lewis answered that the fees the department collected
would be designated general fund (DGF) and were part of the
General Fund (GF).
1:50:40 PM
Representative Kawasaki referenced Slide 5. He noted the
third bullet under the "Fees waived if" line:
? undermines the division's public health mission
He asked where this language was located in statute.
Ms. Lewis answered that the third bullet was not in
statute. She detailed that the third bullet was the
division's philosophy of how to approach fees. She said
that a fee would not be in the public interest if it
undermined the division's health mission.
Representative Kawasaki noted the examples of area of fee
implementation listed on the fiscal note. He asked about
the first bullet and wondered whether the payee would be
the clinic or an individual patient.
Ms. Lewis answered that the clinic would pay the fee for
the inspected radiologic device.
Representative Kawasaki looked at the other bullets on the
fiscal note. He queried who would be directly paying the
listed fees.
Ms. Lewis responded that it would likely be some type of
organization rather than an individual. She said that the
administrative fee for the loan repayment program would be
paid by the employers of the practitioners who were
receiving the loan repayment program. The custom,
statistical, and epidemiological analysis and other types
of data that could be charged for, would depend of who was
requesting the information, which could be from a wide
variety of entities.
1:53:33 PM
Representative Tilton asked about the forth bullet on the
fiscal note:
* The division has turned away requests to assist with
community health assessments and community action plan
development. The division lost the capacity for this
service when the position funded with unrestricted
general funds was eliminated in recent budget cuts.
The ability to charge fees would enable us to once
again support local efforts for healthier
communities. No new positions are needed; the
division will utilize existing positions. ($125.0
DGF)
Representative Tilton noted that the note went on to
reflect that no new positions were needed and asked whether
the division would need to fill the lost position mentioned
in the bullet point.
Ms. Lewis answered that if the division was looking to fund
a position it would utilize existing positions. She said
that the division had roughly 426 positions, with 50
current vacancies. She said that priorities across the
division were considered when addressing vacancies. She
said that using existing positions before seeking
additional staffing was the preferred practice of the
division.
Representative Guttenberg referenced a letter provided to
the committee by ASHNHA dated January 31, 2018 (copy on
file). He asked whether the committee would hear from the
organization.
Co-Chair Seaton relayed that the committee could hear from
them later in the meeting.
1:55:50 PM
Representative Neuman asked whether the money in the fiscal
note had been included in the FY 19 budget for the
department.
Ms. Lewis replied that the department had no additional
fees reflected in the bill included in the FY 19 budget.
She said that could analysis and discussions with
stakeholders would need to happen first.
Representative Neuman asked whether the department expected
additional money for FY 19 as a result of the legislation.
Ms. Lewis answered that the services were not being
provided by eh department currently and that no additional
funding had been requested or expected.
1:57:51 PM
Representative Guttenberg asked for ASHNHA's initial
concerns about the bill. He asked about the changes in the
current version.
JEANNIE MONK, VICE PRESIDENT, ALASKA STATE HOSPITAL AND
NURSING HOME ASSOCIATION (ASHNHA), replied that the
organization' original concern was that there would be an
opportunity for shareholders to provide input prior to the
beginning of the regulation process.
Representative Guttenberg asked how the fees would affect
the hospital in the state and other clinics.
Ms. Monk answered that anytime additional regulatory burden
was put on a health organization someone had to pay for the
cost. She did not believe the bill would result in
increased costs to users.
Vice-Chair Gara understood that the process was new. He
wondered whether the extra layer of stakeholder feedback in
the regulatory process would add to the cost of fee
changes.
Ms. Lewis answered that the department would be able to
absorb the cost associated with meeting with stakeholders.
the costs. She noted that the stakeholders would vary for
each individual fee. She said that the division had always
intended to receive input from stakeholders. She reminded
the committee that the fees under discussion were fees that
were not currently levied, and it was necessary to make
sure that the fees would not undermine the public health
mission and that the fees were set up in a reasonable way.
2:02:34 PM
Representative Kawasaki wondered how deep Title 18 would go
when added to the administration of public health. He was
uncertain that he was comfortable with the language as it
was written. He requested a comprehensive list of the fees
that could manifest in the future that would be covered
under regualtion.
Ms. Lewis answered that the four on the fiscal note were
the only four yet identified. She said that broader fee
authority had been requested because public health was not
free and reasonable fees could develop in the future. She
added that any fee that would be needed in the future would
include public and stakeholder input.
2:05:05 PM
Ms. Monk announced that the written comments from ASHNHA
could be found in member packets. She said that the
association supported the legislation with the increased
stakeholder involvement prior to the initiation of new
fees.
Co-Chair Neuman wondered whether the bill would affect
pioneer homes.
Ms. Monk did not think that the bill spoke specifically to
fees that would impact either hospitals or nursing homes
but gave them the opportunity to charge the fees. Whether
pioneer homes, which were part of the association, would be
affected would depend on the fee.
Representative Neuman was interested to know whether the
bill would impact Pioneer Homes.
Representative Kawasaki asked for detail on who ASHNHA
represented.
Ms. Monk replied that ASHNHA Represented Alaska's hospitals
and skilled nursing facilitates. All tribal hospitals,
nursing homes, community health centers, rural health
clinics: ASHNHA represented a wide spectrum of services
provided under the umbrella of a hospital or skilled
nursing facility.
2:08:59 PM
TOM CHARD, CHAIR, SHARP COUNCIL, STATE LOAN REPAYMENT,
HEALTH PRACTITIONER SUPPORT AND ACCESS, JUNEAU, provided
information about the council and its 18 members that
included dentists, doctors, and other. To date the
organization had administered 250 contracts with sites
across the state. He shared that the council had considered
the bill and had ultimately voted to support the bill and
administrative fees that may result from the program.
2:12:16 PM
Co-Chair Seaton CLOSED public testimony.
Vice-Chair Gara had a question for Legislative Legal
Services. He asked whether any other process in regulation
required by statute the additional consultation for a
change to regulation.
KATE GLOVER, LEGISLATIVE LEGAL, JUNEAU (via
teleconference), she could not say with certainty that
nothing else existed in statute. She said that the
Administrative Procedure Act required consultation after a
proposal, this bill would require it beforehand.
Representative Guttenberg expressed concern that the bill
would further bifurcate public health. He stressed that the
state needed to get control of the finances of the
healthcare community.
Ms. Lewis explained that AS 44.64.213 authorized an agency
to contact a person about the development of the regulatory
action and to answer question from a person that was
relevant to the development of a regulatory action. She
said that other consultations between departments were
required but did not pertain to the regulatory process.
2:16:43 PM
Vice-Chair Gara asked about the intent of the committee
pertaining to bill action.
Co-Chair Seaton answered the intent was to move the bill if
it was the will of the committee.
Representative Neuman wanted to offer a conceptual
amendment that would require two meetings instead of one
for stakeholder discussions.
Co-Chair Seaton said that the bill would be held until the
following Monday.
2:18:42 PM
AT EASE
2:19:03 PM
RECONVENED
Co-Chair Seaton noted that the bill was already scheduled
for the following Wednesday.
HB 215 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 142
"An Act relating to unemployment insurance benefits;
increasing the maximum weekly unemployment insurance
benefit rate; and providing for an effective date."
Representative Guttenberg reported that he had asked a
young woman in the back of the room why she was supportive
of the bill. She had replied that it would help her pay her
mortgage. He was supportive of the legislation.
2:20:36 PM
REPRESENTATIVE CHRIS TUCK, SPONSOR, provided a summary of
the bill:
The Alaska Department of Labor's Unemployment
Insurance (UI) program provides unemployment benefits
to eligible workers who become unemployed through no
fault of their own, working less than full-time, and
meet certain other eligibility requirements. With the
seasonal nature of much of the state's workforce and
Alaska's vast remoteness, UI benefits serve not only
to bridge the economic gap for the individual worker,
but also as a stabilizing influence on local
economies.
The current Maximum Weekly Benefit Amount (MWBA) of
$370 only replaces 36% of the state's average weekly
wage of $1,020. An MWBA of $510 would provide 50% wage
replacement of the average weekly wage, a nationally
recognized norm.
To compare to other western states, the MWBA rate in
Washington is $681, Oregon is $590, and California is
$450. In addition, Alaska is one of only three states
where the cost of providing UI benefits is shared by
employers and employees.
House Bill 142 would increase the maximum weekly
benefit amount under the UI Program in two steps from
the current $370 to $458 in 2018 and to $510 in 2019.
Among 50 states, the District of Columbia, and Puerto
Rico, Alaska is:
• 39th in Maximum Weekly Benefit Amount
• 44th in Average Weekly Benefit Amount ($252)
• 52nd in Wage Replacement Ratio (.288)
• 9th in Recipiency Rate (unemployed workers
receiving benefits - .37)
As a claimant filing for UI benefits, individuals are
responsible for actively seeking suitable fulltime
employment and reporting activity for seeking
employment each week to remain eligible.
The federal poverty level for a family of three in
Alaska for 2016 is $25,200, or $2100 a month. An
unemployed single parent with two dependent children
receiving the MWBA of $370 plus the dependent child
allowance of $24 per child under 18 (up to a maximum
of three) receives approximately $1800 per month in UI
benefits.
By passing House Bill 142, Alaska will be more in-line
with the average weekly benefits and provide the
necessary financial support families need to survive
while seeking employment.
2:25:49 PM
Representative Tuck reviewed the sectional analysis (copy
on file):
Section 1: AS 23.20.350(d) Amends the benefit
schedule by increasing the maximum qualifying wage
requirement from $42,000 to $59,500. The qualifying
wage schedule is extended in $250 increments to reach
the new maximum qualifying amount. The benefit
schedule is extended in $2 increments for each
additional $250 of qualifying wages to reach a new
maximum weekly benefit amount of $510.
Section 2: Amends AS 23.20.350 by adding new
subsections:
(h) Annually, after December 31, 2019, authorizes the
Department to increase the highest WBA for individuals
earning at least $59,750. The new WBA calculation
shall amend the highest base period wages in $250
increments and the highest WBA in $2 increments if the
state's average weekly wage increases. The new maximum
WBA shall not exceed 50% of the average weekly wage.
(i) Provides for public notice of any new benefit
amounts calculated under (h) by December 1 of each
year by posting a notice on the Alaska Online Public
Notice System and allows for public comment on the
accuracy of the Department's calculations.
New maximum WBAs apply to benefit years established on
January 1 of each year and does not change existing
claims.
Changes to the WBA shall be calculated only once per
year.
(j) Establishes the calculation procedure for
determining Alaska's average weekly wage by December 1
of each year. The average weekly wage is determined by
dividing the average annual wage in the state for the
preceding 12-month period ending June 30 by 52. The
state must include wages of all employees in the state
covered by this chapter, both public and private. If
the calculation does not result in whole dollars, the
amount shall be rounded down.
Section 3: Provides for an effective date of January
1, 2018.
2:28:13 PM
Representative Tuck noted that the bill was not changing
the dependent factor.
Vice-Chair Gara referenced opposition from the NFIB. He
understood that calculation of employer contributions was
written in another area of statute.
Representative Tuck deferred to the department.
LENNON WELLER, ECONOMIST, DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT, replied that a separate statute AS 23.22.290
outlined how tax rates were calculated.
Vice-Chair Gara asked whether the bill would increase the
employee contribution.
Ms. Weller answered that any time the cost of a program was
increased there was a corresponding increase in tax rates
going forward. There was a forecast to FY24 showing the
difference employers and employees would pay if the bill
passed. There was a 73/27 percent split (employer and
employee respectively).
2:31:10 PM
Vice-Chair Gara asked for verification that in all states
but two the employer covered the costs.
Representative replied in the affirmative - Pennsylvania
and New Jersey were the two other states that did not cover
the costs.
Representative Neuman asked how the bill would impact self-
employed people.
Representative Tuck deferred to the department.
PATSY WESTCOTT, CHIEF OF UNEMPLOYMENT INSURANCE, DIVISION
OF EMPLOYMENT AND TRAINING SERVICES, DEPARTMENT OF LABOR
AND WORKFORCE DEVELOPMENT, answered that self-employed
individuals did not pay into the program and would not be
impacted.
Representative Neuman recalled a similar bill on the
subject from the past. He spoke of construction companies
and the complications surrounding independent contractors
on job sites. He wondered whether the bills were related.
2:33:16 PM
Representative Tuck answered that the independent
contractor legislation had more to do with cheating Davis
Bacon requirements. He explained that a self-employed
contractor working on a Davis Bacon job was not required to
pay themselves the same benefits and wages laid out in
Title 36. He said that the bill did not speak to the issue.
He added that with private contractors the employer could
avoid paying the benefits due to hourly employees.
Representative Neuman stated that self-employed individuals
also had to pay self-employment taxes. He was unsure
whether the unemployment compensation act was part of self-
employment taxes.
Ms. Westcott asked Representative Neuman to restate the
question.
Representative Neuman complied.
Ms. Westcott answered that contributions to the
Unemployment Insurance Trust Fund were not taken from self-
employed individuals. The division investigated workers
that were misclassified and reported incorrectly as
independent contractors, those issues were addressed so
that the employer could correctly report the employees and
pay security tax contributions on their behalf.
2:35:36 PM
Representative Pruitt asked when the employer paid the
money, withheld from an employee's check for unemployment
benefits, to the department.
Ms. Westcott replied that the funds were deducted from the
employees check each pay period and then held in trust by
the employer on behalf of the employee. The funds were
submitted to the department on a quarterly basis.
Representative Pruitt referenced the effective date of
January 1, 2018. He understood that this could affect the
payments after March 31, 2018.
Mr. Weller answered that tax rates were calculated once per
year by the department and were effective for the following
calendar year. He said that he could not speak to the
retroactive nature of the bill but that the three most
recent state fiscal years of costs and the trust fund
balance at the end of September were used to calculate
rates for the following January. He did not believe that
rates would be recalculated if the bill went into effect
partway through a calendar year.
Co-Chair Seaton noted that the bill had been introduced the
previous session and wondered whether the effective date
should be updated.
2:38:04 PM
Representative Tuck answered that the effective date should
be amended.
Representative Pruitt referenced Section 2 of the bill. He
expressed concern for the elimination of legislative
control in issues related to the bill.
Representative Tuck responded that the bill would bring us
up to date with other states by bringing the wage
percentage factor up to 50 percent. He said that there was
a chart in the packet that showed actual wage base
predictions through 2024.
Representative Pruitt struggled to understand the numbers.
He hoped that the department could address his concerns.
2:40:57 PM
Representative Neuman referenced Line 14, page 9 of the
bill, which discussed the increase of weekly benefits. He
wondered whether the increase mentioned would be increased
to remain at the 50 percent of weekly average determination
or would it fluctuate.
Representative Tuck responded that it would be changed
annually and would be locked in for a year. The wages would
be determined before November 1, and the calculation would
be used to determine the benefits after January 1.
Representative Neuman clarified that the increase or
decrease would depend on the average wages of Alaskans at
50 percent of the average weekly determined rate.
Representative Tuck answered in the affirmative.
Representative Tilton asked whether the bill would impact
the Technical Vocational Education Program (TVEP) funds.
Representative Tuck replied that the legislation would not
impact TVEP or STEP [State Training and Education Program]
grants.
Ms. Westcott explained that those programs were funded
through a portion of a tax collected from employees and was
dedicated to the TVEP and STEP programs prior to the rest
of the tax being deposited into the trust fund. The funds
from the trust could only be used to pay benefits, training
programs were funded through different federal grants
received by the department.
2:44:39 PM
Representative Guttenberg queried the logistics of the $250
increments to reach the new maximum qualifying amount and
the $2 increments for each additional $250 for qualifying
wages.
Representative Tuck referenced a handout from the
Department of Labor and Workforce Development (copy on
file):
• For every additional $250 in base year wages, $2 is
added to the weekly benefit, with the schedule
maxing out at a base year wage of $42,000 and $370
weekly benefit (excluding dependent child
allowances, if applicable).
Representative Guttenberg understood that the rate would go
up automatically as pay wages increased to $250.
Representative Tuck replied that the number would be locked
in annually.
Representative Pruitt asked whether someone could speak
about the fiscal note.
Ms. Westcott deferred to the Office of Management and
Budget.
Representative Pruitt asked about the mechanism that made
the employee percentage of contribution at average rate
class go down over the next 5 years under the legislation.
Mr. Weller answered that the decrease was due to the change
in the minimum tax rates.
2:48:56 PM
Representative Gara referenced Page 7 of the legislation
and stated that the benefit rate had not increased.
Representative Tuck replied in the affirmative.
Vice-Chair Gara understood that the bill assumed that as
wages went up with inflation the benefit also increased.
Representative Tuck answered in the affirmative. Whether a
person was making $42,000 or $84,000 per year, they were
locked in at the #370 per month. He speculated that a
person making $84,000 per year probably had higher
expenses.
Representative Neuman asked about people filing for
disability insurance. He asked whether the bill would
increase disability payments.
2:51:07 PM
Representative Tuck answered that the bill only dealt with
unemployment insurance.
Representative Neuman remarked that he had not known
whether disability insurance fell under //
Representative Pruitt referred to the indeterminate fiscal
note. He hoped that an estimate of cost to the state could
be determined.
CAROLINE SCHULTZ, POLICY ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, responded that OMB had used actual state costs and
liabilities from 2017 to model as if the legislation had
been in effect in 2017. There had been about 1,500 state
employees that qualified for the benefits under
unemployment insurance. She reminded the committee that
state employees and the state as an employer did not pay
into the unemployment fund through the traditional tax that
most employers did, rather the state reimbursed the fund as
the state. If a state employee made a claim, the state
reimbursed the fund, which came out of the working reserve
fund. She said that the cost difference to the state would
have been $456.6 thousand more dollars out of the working
reserve fund in the 2017 calendar year; the state paid $4.4
million in calendar year 2017 and had the 487 claimants
qualified for the higher rate greater that $370, the total
cost to the state would have been $4.9 million.
Representative Pruitt stated that the explanation was
helpful.
2:54:46 PM
Co-Chair Seaton asked whether the department could craft a
new fiscal note that reflected the fiscal impact due to
inflation adjustment.
Ms. Schultz said that because the amounts of employees that
would be claiming against the fund, and what their base
wages would be, the fiscal impact would remain
indeterminate.
Co-Chair Seaton relayed that the bill would be heard on
February 7, 2018. He asked amendments to be in Co-Chair
Foster's office by 5:00 pm on February 6.
2:56:34 PM
AT EASE
2:56:52 PM
RECONVENED
Co-Chair Seaton OPENED public testimony.
TRENTON ENGLISH, SOUTHEAST REPRESENTATIVE, ALASKA LABORERS,
JUNEAU, testified in favor of the bill. He felt that the
rising cost of living should be considered and that
unemployment benefits should be increased to help working
Alaskans.
2:58:27 PM
JOSHUA GARDNER, LABORERS 942, JUNEAU, spoke in support of
the bill. He shared that it had been a slow year for
construction workers and if he was lucky he worked 7 to 8
months of the year, making $800 to $1,000 per week. He said
that when he was on unemployment he made $370 per week,
which made it difficult to support his family and prepare
for emergency expenses.
2:59:16 PM
SYDNE WILLIAMSON, CARPENTERS 1281, JUNEAU, testified in
support of the legislation. She shared her personal story.
She relayed that she had worked jobs she did not enjoy and
had lived in the women's shelter. She had gone back to
school and she was now a carpenter. She loved her job and
worked hard to support herself and her daughter. She
relayed that she had to have a roommate to afford living in
Juneau. She had been part of the crew that built the
building at the airport. She was now out of work as the
nature of carpentry work was job by job. She felt that she
should not have to deplete her savings while in between
jobs. She asked the committee to consider raising the
weekly unemployment insurance benefit rate.
3:02:27 PM
KYLEE LARSEN, LOCAL 1281, JUNEAU, spoke in support of the
bill. She stated that the economy in Alaska thrived in the
summer months. She spoke to struggling to find work and pay
bills. She was a first-year apprentice in the local
carpenters' union. She had broken her hand earlier in the
year and had healed, but the work was now scarce. She
stated that the average daycare charged $900, per month,
per child, which was a major stressor on top of food, gas,
and rent. She lamented that these factors left hardworking
individuals to contemplate moving to another state.
3:04:50 PM
LANCE NELSON, IRONWORKERS 751, FAIRBANKS (via
teleconference), spoke in favor of the bill. He felt that
when work slowed, and lay-offs occurred, the low
unemployment benefits forced people to move out-of-state to
find work and benefit from better unemployment benefits. He
stressed that $370 per week was not a livable wage for
Alaska families. He argued that the funds were not
considered a luxury by needy working families but went
right back into the economy being spent on home heat, food,
and rent.
3:06:52 PM
JD WILKERSON, LOCAL 751, FAIRBANKS (via teleconference),
spoke in favor of the legislation. He indicated he had seen
his volume of work drop about 50 percent over the past 2
years. He reported that over the last couple of years he'd
seen young workers forced to leave Alaska. He hoped that
the states economy could provide the means for families to
remain in the state.
Co-Chair Seaton indicated the legislative information
office was having technical difficulties.
3:10:22 PM
AT EASE
3:11:55 PM
RECONVENED
Co-Chair Seaton reported that there were 4 additional
testifiers in Anchorage.
3:13:14 PM
At EASE
3:14:12 PM
RECOVENED
DUSTIN SWATEK, PNWRCC, ANCHORAGE (via teleconference),
spoke in favor of HB 142. He said that much of the trade
work in the state was seasonal. He lamented that these
workers often lived paycheck to paycheck. He believed that
a raise in the unemployment benefits would help workers
meet their financial needs until they could procure work.
3:15:27 PM
RYAN ANDREW, IBEW LOCAL 1547, ANCHORAGE (via
teleconference), testified in support of the legislation.
The state was experiencing tough economic times, which
meant the union had seen members move from the state for
work in other locations. He felt an increase in the benefit
would retain the Alaskan workforce.
3:16:36 PM
KEVIN MACKY, IBEW LOCAL 1547, WASILLA (via teleconference),
spoke in favor of the bill. He shared that about 220
members worked a seasonal career. The bill would be a major
benefit, especially in the winter. He was a constituent of
Representative Tilton. He spoke to the high cost of living
and low unemployment insurance.
3:17:50 PM
VINCE BELTRAMI, ALCSKS AFL-CIO, ANCHORAGE (via
teleconference), testified in support of the bill. The
current amount of $370 per week was over a decade old. He
said that due to inflation, people collecting that $370
rate had lost $62, per week. He stressed that Alaska was
behind most other states for wage replacement. The
organization had over 1,000 members working in the Lower 48
because they could not wait to find work in Alaska while
living under a paltry wage replacement. He referenced the
Alaska Workforce Investment Board that had submitted a
letter unanimously endorsing the bill. He referenced the
number of employers supporting the bill. He felt that if
the state was on the brink of building a new pipeline it
was necessary to have a workforce ready to work.
3:22:05 PM
Co-Chair Seaton CLOSED public testimony. He reminded
members of the amendment deadline of 5:00 p.m. on February
6.
3:23:19 PM
Representative Neuman queried the last time the
unemployment insurance had been raised.
Ms. Westcott answered that the last time the weekly benefit
amount had been raised in the state was effective January
1, 2009. Prior to that the maximum weekly benefit amount
had been $248.
3:24:11 PM
HB 142 was HEARD and HELD in committee for further
consideration.
Co-Chair Seaton discussed housekeeping.
ADJOURNMENT
3:24:23 PM
The meeting was adjourned at 3:24 p.m.