Legislature(2025 - 2026)ADAMS 519
02/05/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Adjourn | |
| Start | |
| HB53 || HB55 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 53 | TELECONFERENCED | |
| += | HB 55 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 5, 2025
1:32 p.m.
1:32:48 PM
CALL TO ORDER
Co-Chair Josephson called the House Finance Committee
meeting to order at 1:32 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
Representative DeLena Johnson
ALSO PRESENT
Brent Fisher, Chair, Board of Trustees, Alaska Mental
Health Trust Authority; Mary Wilson, Chief Executive
Officer, Alaska Mental Health Trust Authority; Allison
Biastock, Chief Communications Officer, Alaska Mental
Health Trust Authority; Jusdi Warner, Executive Director,
Trust Land Office, Alaska Mental Health Trust Authority;
Julee Farley, Chief Financial Officer, Alaska Mental Health
Trust Authority; Katie Baldwin-Johnson, Chief Operating
Officer, Alaska Mental Health Trust Authority.
SUMMARY
PRESENTATION: ALASKA MENTAL HEALTH TRUST AUTHORITY
HB 53 APPROP: OPERATING BUDGET; CAP; SUPP
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 APPROP: MENTAL HEALTH BUDGET
HB 55 was HEARD and HELD in committee for further
consideration.
Co-Chair Josephson reviewed the meeting agenda.
^PRESENTATION: ALASKA MENTAL HEALTH TRUST AUTHORITY
HOUSE BILL NO. 53
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
making reappropriations; making appropriations under
art. IX, sec. 17(c), Constitution of the State of
Alaska, from the constitutional budget reserve fund;
and providing for an effective date."
HOUSE BILL NO. 55
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
1:34:14 PM
BRENT FISHER, CHAIR, BOARD OF TRUSTEES, ALASKA MENTAL
HEALTH TRUST AUTHORITY, introduced the PowerPoint
presentation "Alaska Mental Health Trust Authority" dated
February 5, 2025 (copy on file).
Mr. Fisher continued on slide 2 and explained that the
board of trustees was an independent board that provided
governance, fiduciary, oversight, and direction to the
organization in achieving the mission of the trust.
Trustees had five-year terms and were appointed by the
governor and confirmed by the legislature.
Mr. Fisher advanced to slide 3 and explained that that the
board considered Alaskans who had any of the conditions
listed on the slide to be the beneficiaries of the trust.
The board supported both youth and adult beneficiaries and
prioritized individuals whose behavioral health condition
or developmental disability placed them at risk of
institutionalization if they did not receive proper care.
The trust was also committed to preventing conditions from
occurring when possible. He emphasized that improving life
and health outcomes for beneficiaries was central to the
trust's mission.
Mr. Fisher continued to slide 4 and described the trust as
a state corporation that administered a perpetual trust to
improve the lives of its beneficiaries. The trust was
unique in that it was an independent entity within state
government that used the proceeds from its land and cash
assets to provide a comprehensive suite of mental health
and disability services to meet the needs of both
beneficiaries and communities. The trust funded its work
through grant making and by advancing initiatives aimed at
improving the system of care. Although the trust operated
independently, it partnered closely with the state, local
governments, nonprofits, tribal partners, and other
providers to fulfill its mission. The trust prioritized its
resources for system improvements, innovation, and
strategic initiatives. An important entity within the trust
was the Trust Land Office (TLO), which managed about 1
million acres of land and other non-cash assets to generate
revenue for the trust.
Mr. Fisher explained that he would show a short video on
slide 5.
1:38:35 PM
Mr. Fisher played the video on slide 5. The video explained
that the trust was created in 1994 after a legal settlement
between beneficiary groups and the Alaska. In the
settlement, the state granted the trust 1 million acres of
land and $200 million in cash, making the trust the only
one of its kind in the country. The video also compared the
trust to a garden where cash, land, buildings, and natural
resources like gold, coal, and timber were cultivated to
generate money for beneficiary-related programs. The
trust's funds were managed by the Alaska Permanent Fund
Corporation (APFC) and its land and non-cash assets were
managed by TLO. The trust played a critical role in funding
programs that improved the lives of beneficiaries,
including individuals with mental illnesses, developmental
disabilities, chronic substance abuse, Alzheimer's disease,
and traumatic brain injuries. The trust awarded more than
$20 million annually in grants and was actively involved in
advocacy, policy planning, and ensuring the state had a
comprehensive mental health program. The trust also focused
on key efforts like substance abuse prevention and
treatment, housing, employment, long-term services, and
disability justice.
Mr. Fisher concluded by inviting everyone to visit the
trust's website for more information.
Co-Chair Foster thanked the presenters and liked the
simplicity of the video.
1:41:39 PM
MARY WILSON, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL HEALTH
TRUST AUTHORITY, introduced herself. She explained that she
had been in the CEO role for only two weeks. She relayed
that she grew up in Alaska because her father moved to the
state during the oil boom. She had graduated from Dimond
High School and attended medical school at the University
of Washington through the Washington, Wyoming, Alaska,
Montana, and Idaho (WWAMI) program. She worked with Kaiser
Permanente's Medical Group, where she took on multiple
leadership roles that prepared her for her current
position.
Ms. Wilson explained that during her time at Kaiser
Permanente, she grew into various leadership positions and
managed hospitals, clinics, and medical staff. She shared
that she learned a great deal about population care
management, prevention, and outcome management, as well as
managing people. She emphasized that listening to patients
to understand their needs and desires was another important
lesson that would serve her well in Alaska.
Ms. Wilson explained that while it is essential to manage
crises effectively, prevention was just as important. By
preventing crises before they occur and addressing the root
causes, health care providers could improve the overall
health of the population. She noted that factors like
social determinants of health and lifestyle choices
accounted for 80 percent of a population's health outcomes,
which was why those aspects needed to be prioritized.
1:46:01 PM
Ms. Wilson shared that she was excited about the work the
trust was already doing. The trust's focus on both managing
crises and preventing them aligned well with her personal
philosophy of health care. Although she had only been in
the role for two weeks, she expressed confidence in the
team she was working with.
Representative Stapp remarked that her resume was
impressive. He asked about the decisions behind the
advertising campaign from the trust and noted that he had
seen ads frequently on YouTube. He asked why the campaign
was initiated as he had not encountered ads by the trust
before.
Ms. Wilson deferred the question to her colleague.
ALLISON BIASTOCK, CHIEF COMMUNICATIONS OFFICER, ALASKA
MENTAL HEALTH TRUST AUTHORITY, explained that the trust was
currently running an active campaign aimed at educating the
public about the connection between trust lands and their
purpose. The campaign highlighted how funds generated from
the lands supported grant-making and trust beneficiaries.
She clarified that the ads were not new, and it was
possible that Representative Stapp had encountered the ads
on some of the digital platforms where the trust had
targeted its ad buys. She added that the trust also engaged
in media campaigns focused on reducing stigma, which had
been running for some time.
1:47:32 PM
Ms. Wilson continued on slide 7 to discuss the financial
position of the trust. She explained that the trust had
experienced steady growth in its assets since its
inception, which reflected sound management by the board.
As of the end of the last fiscal year, the trust's cash
resources and investments totaled $788.5 million, with an
additional $59.8 million in real estate equity, bringing
total assets to $848 million. The total represented a
modest increase from the previous year, where total assets
had amounted to $818 million. The trust's corpus was
managed by APFC and stood at $551 million, which was an
increase from $538 million the previous year. Since its
inception in 1996, the corpus had grown due to revenues
from activities on trust lands and permanent transfers for
inflation proofing.
Ms. Wilson continued that the trust used a four-year
average to calculate its annual budget withdrawal. The
approach ensured that the trust remained a stable and
reliable funding partner for Alaska's beneficiary-serving
organizations. The blue bar on the chart on the slide
represented the reserves held by the trust to guarantee
spending for beneficiaries, even in periods of market
downturn. The trust had $108 million in unrealized
appreciation, represented by the red bar. Unrealized
appreciation was based on market value and was not
available for spending until realized, as determined by the
APFC investment team. She added that the real estate
equity, represented by the dark blue bar, stood at $59.8
million. She reiterated that the trust owned one million
acres of land, although the land was not reflected in the
chart.
Co-Chair Schrage asked why the value of the one million
acre of trust land was not included on the chart.
Ms. Wilson responded that the lands were valued at $1 per
acre for simplicity, but the figure did not accurately
reflect the true worth of the lands. She noted that some of
the land was empty and some was accessible, and it was
difficult to estimate an accurate market value for the
lands.
Co-Chair Schrage asked where the $1 per acre valuation had
originated.
Ms. Wilson replied that it was a general use value figure
that had been used for a long time.
Co-Chair Schrage asked if there had been any efforts to
develop a more accurate method for valuing the land.
Ms. Wilson deferred the question.
1:50:57 PM
JUSDI WARNER, EXECUTIVE DIRECTOR, TRUST LAND OFFICE, ALASKA
MENTAL HEALTH TRUST AUTHORITY, explained that in order to
obtain an actual value for the million acres of land and
resources, an appraisal would be necessary. However,
appraising such a large amount of land would be cost-
prohibitive. There were very few appraisers in Alaska,
making it nearly impossible to conduct such an appraisal.
Representative Stapp noted that land in Fairbanks was
priced much higher at around $20,000 per a half-acre. He
asked where the "abundance of cheap" $1 per acre land was
located.
Ms. Warner responded that before the trust sold any land,
it was appraised and sold at market value, which was
sometimes simply what someone was willing to pay for the
land. The $1 per acre valuation was a simple book value
applied at the time the trust received the land and
resources. The valuation was based on the best information
available at the time of the transactions, which occurred
over 30 years ago. She added that the situation had changed
since then.
Representative Stapp asked if the trust was selling land at
$1 per acre. He thought there seemed to be confusion.
Ms. Warner responded that no land was being sold for $1 per
acre.
Co-Chair Foster commented that the situation might be
similar to how the university dealt with land on its books.
Co-Chair Josephson agreed that Co-Chair Foster was probably
correct.
1:53:14 PM
Representative Hannan recalled a past sale of a prominent
piece of trust land in the community, which had sold for
nearly four times its appraised value. She asked if Ms.
Warner could provide more information.
Ms. Warner responded that the appraisal for the property
had now become public. She could confirm that the property
had been appraised in the lower millions, but the trust had
sold it for $20 million.
Co-Chair Josephson understood that TLO employees were
housed in the Department of Natural Resources (DNR) but
paid using trust assets.
Ms. Warner responded that his understanding was correct.
Ms. Wilson continued on slide 8 which detailed the trust's
commercial real estate investment. She explained that the
assets were actively managed by TLO professionals. The
board of trustees had previously determined that it was in
the trust's best interest to sell the commercial real
estate portfolio as it had met its investment objectives.
The properties were originally purchased with a holding
period of 7 to 20 years and the newest property was now 8
years old, meaning all properties had reached the expected
holding period. Two properties had already been sold, which
resulted in gains for the trust, and there were currently
four properties remaining in the portfolio. She noted that
three of the properties were in Alaska, but one was located
in Texas. The trust had voted to cease the acquisition of
any new commercial real estate properties for the time
being. She noted that the properties had higher-than-
average occupancy rates. The national benchmark for
occupancy set by the National Council of Real Estate
Investment Fiduciaries was around 80 percent and the
trust's properties had an occupancy rate of 92 percent.
1:55:46 PM
Representative Hannan asked how trust land was acquired in
Texas.
Ms. Warner responded that it was a trust decision to
purchase commercial real estate outside of Alaska.
Ms. Wilson continued on slide 9. She explained that the
slide illustrated how the trust determined its available
funding. The calculation used to determine the annual
budget for the upcoming fiscal year was presented on the
left side of the slide. She relayed that the amount was
projected to be $39.9 million in FY 26. The chart on the
right showed that the trust continued to see stable growth
in its available funding thanks to the use of averaging.
Ms. Wilson noted that in late FY 24, the board had approved
an update to the formula used to determine the annual
expenditure amount. For future revenue calculations, a
four-year average would be used for invested assets.
However, the calculation would also incorporate a two-year
average of both TLO income from the prior years' unexpended
funds and the actual interest income from the most recent
fiscal years. The changes were intended to increase
certainty for the annual revenue calculation without having
any negative impact.
Ms. Wilson explained that the largest portion of the budget
was funded through a withdrawal from the trust's invested
assets, which was calculated as 4.25 percent of the average
value from the previous four years. She stated that the
two-year average of prior funds were carried forward, which
included grants from prior years that had not been fully
expended. She relayed that it was not uncommon for all
budgeted funds to not be utilized due to various
circumstances. Unused grant funds rolled back into the
annual spending calculation and the process would be made
quicker due to the new two-year average carried forward
funds. The TLO's spendable income also contributed to the
available spend estimate, which was shown on the slide as
$4.2 million and was based on a two-year average. The
available funding also included nearly $1.8 million in
interest earning.
Ms. Wilson noted that the committee had previously
expressed an interest in learning more about the trust's
payout. She explained that the payout rate had started at 3
percent annually at the fund's inception and had gradually
increased over time to the current rate of 4.25 percent.
The trustees were presently in discussions with consultants
from Callan to examine trust spending and help determine if
changes to the payout percentages were in the best interest
of both current and future trust beneficiaries.
1:58:53 PM
Co-Chair Schrage remarked that he was learning a lot about
the trust and was trying to wrap his mind around its
mission, how it functioned, and how the amount to be spent
was determined. He understood the rationale behind the 4
percent withdrawal from investment earnings to avoid
depleting the corpus and maintain steady funding. He
requested more information on whether the trust spent the
profits from sources like real estate transactions from the
prior year, in addition to the 4.25 percent from investment
earning.
Ms. Wilson responded not all of the income provided by TLO
from real estate and other sources was spendable. She
explained that a portion of the funding went back into the
principal, which was mandated by statute. The real estate
portion included only the spendable income, which was
related to the status of leases. She noted that income that
was considered royalties went into the corpus. She added
that TLO's spending decisions were more complex and she
offered to follow up with information on the different ways
TLO distributed its funds.
Co-Chair Schrage asked whether there was a consistent flow
of spendable income coming from TLO each year or if the
income was more volatile, depending on market phases or
other developments.
Ms. Wilson responded that while the 4.25 percent from the
corpus was relatively steady, other income such as interest
earnings was subject to market volatility. The two-year
averaging system was designed to reduce volatility in the
spending, which helped maintain a more consistent flow of
available funds.
Representative Galvin understood that $3.6 million would be
carried forward. She asked if it was typically around 10
percent of the overall investment in mental health services
that was expected to carry forward.
Ms. Wilson responded that she could provide the data for
the last 10 years in writing. She had observed that the
carry-forward amount had been fairly consistent, but she
wanted to ensure she provided accurate information.
Representative Galvin remarked that she thought the
intention was to spend all available funds, rather than
carry them forward. She was curious why funds were carried
forward and suggested having a discussion on the topic at
some point in the future. She referred to the chart on
slide 7 that illustrated the four-year average used to
determine the annual expenditure amount. She asked whether
an increase in the available funding for FY 26 should be
expected given the market's strong performance and the
significant growth in the corpus that was represented by
the green bars on the chart.
Ms. Wilson deferred the question.
2:03:47 PM
JULEE FARLEY, TRUST CHIEF FINANCIAL OFFICER, ALASKA MENTAL
HEALTH TRUST AUTHORITY, explained that the trustees
approved the budget in August every year, but for FY 26,
the final June 30, 2024, values of the Permanent Fund would
not be known until September 15, 2025. Since the fiscal
year for the trust ended on June 30, the trust had to look
at the values from the previous year when determining the
budget for FY 26. The uncertainty meant that the trust
could not include the final values from the year ending
June 30, 2024, in the calculations.
Representative Galvin asked whether the Permanent Fund
mentioned referred to the corpus of the trust.
Ms. Farley responded that APFC managed the trust's
principal and reserves by statute.
Representative Galvin understood that the information on
the corpus came from APFC, and the trust had to wait for
the corporation to provide the data.
Ms. Farley added that the timing was associated with
receiving information from APFC, which was why there was a
slight delay in using the most current data.
Representative Galvin commented that she had expected a
higher increase than the $1 million bump in the available
funding given the positive performance over the last four
years. She appreciated the clarification.
2:06:03 PM
Ms. Wilson continued on slide 10 and the trust's FY 26
spending allocations. She emphasized that the trust entire
budget was self-funded, and it did not rely on state
general fund dollars. She clarified that only the board had
the authority to spend trust funds, and every increment in
the budget had been approved by the trustees. The budget
development process was done in close collaboration with
state agencies, providers, tribal organizations,
nonprofits, beneficiaries, and other partners.
Ms. Wilson explained that the FY 26 budget totaled around
$40 million. The largest portion, represented by the dark
green section of the pie chart, was designated for
authority grants, which were trust grants awarded outside
the state budgeting process and went directly to
beneficiary-serving partners in the community. The yellow
slice represented the Mental Health Trust Authority
Authorized Receipts (MHTAAR) grants, which were trust
grants to state agencies. She indicated that all MHTAAR
increments were required to be part of the state budget
process and the legislature needed to provide receipt
authority for the trust funds to be used for the designated
purposes. The grants reflected a long-standing commitment
to state partners that played a critical role in serving
beneficiaries. Since the trust's inception, approximately
$270 million had been granted to state agencies. Trust
funds were intended to support state funding rather than
replace it. The trust's annual budget represented only a
small fraction of the total state spending dedicated to
supporting the health and wellness of Alaskans.
Ms. Wilson noted that the chart also showed the remaining
slices of the budget, which represented the operational
expenses of both the trust and TLO. The expenses included
advocacy and systems change efforts, grant funding
administration, and the management and development of trust
lands. The trust employed 17 full-time employees and TLO
employed 19 full-time employees.
2:08:17 PM
Ms. Wilson continued to slide 11 which provided further
details on the MHTARR slice of the pie graph on slide 10.
She relayed that there was $10.2 million in MHTAAR funding
which was allocated to numerous state partners through the
state's budget process. There were over 50 MHTAAR
increments that had been transmitted to be included in the
FY 26 budget. The funds would support various initiatives,
including capital funds for programs working with trust
beneficiaries, training programs for workforce development,
data and planning efforts, and fund positions in multiple
departments focused on beneficiary issues.
Representative Stapp understood that it was common for the
trust to make recommendations on how the MHTAAR funding
should be spent. He stated it was primarily because AMHTA
used zero based budgeting, while the state did not. He
asked how many times over the last few years had MHTAAR
funding disappeared after the trust had encouraged the
state to start a new program.
KATIE BALDWIN-JOHNSON, CHIEF OPERATING OFFICER, ALASKA
MENTAL HEALTH TRUST AUTHORITY, offered to conduct some
reflective research on the issue. The trust's role in
funding initiatives was to provide catalytic support,
especially when launching new programs. She clarified that
the trust would typically help fund a program for several
years to get it established and ensure that it became solid
and sustainable. After the initial period, the state would
assume responsibility for the continued funding of the
program. The approach was designed to help transition
programs to long-term sustainability, and it was a common
strategy for the trust. She emphasized that while the trust
provided initial support, the responsibility for the
ongoing funding would eventually shift to the state as new
programs were launched and stabilized.
Representative Stapp asked for more information about the
trust's budgetary process and how long the trust intended
to support new programs. He asked if there were specific
guidelines or considerations for determining how long the
trust would help fund the initiatives and programs before
transitioning them to the state.
Ms. Baldwin-Johnson responded that when the trust and its
trustees considered supporting larger initiatives, it gave
careful consideration to the long-term commitment of trust
funds and the eventual transition to sustainability. Every
budget process involved thoughtful deliberation of how to
manage the trust's resources, with a focus on being
conservative in making recommendations for general fund
support. The goal was always to ensure that trust funds
were used effectively and that programs were transitioned
responsibly to the state once the funds were established.
Representative Stapp asked if there was any information on
the trust's website or budget documents that stated how
long the trust planned to fund the Alaska Training
Cooperative (ATC). He asked whether it was for a few budget
cycles, a one-time contribution, or for an indefinite
period.
Ms. Baldwin-Johnson responded that there was no specific
document outlining the duration of the trust's funding for
the cooperative. She explained that the trust had launched
the cooperative with significant investment of over $10
million, which was intended to support the ATC in providing
crucial training to the workforce serving beneficiaries
across the state. Additionally, various state divisions and
departments benefited from the cooperative's work. Over
time, other funding sources had contributed to the
cooperative, including state general funds and
contributions from other partners and foundations. As a
result, the trust had reduced its financial commitment over
the years and transitioned the funding responsibility to
additional contributors.
2:13:57 PM
Co-Chair Schrage asked for more information about the
current role of the trust and how to determine what part
the trust played in addressing mental health challenges in
Alaska. He asked how to differentiate between the state's
role and the trust's role, especially when it came to
funding and delivering mental health services. He wondered
if the trust's primary responsibility was to initiate and
support programs or whether it should be viewed as the main
funder and provider of core services. He acknowledged the
complex history of the trust and was seeking to understand
its role today, specifically in comparison to the state's
responsibilities in addressing mental health issues.
Ms. Wilson responded that the trust's role was
multifaceted. The trust had a responsibility to directly
allocate funds through authority grants, but it also had a
statutory obligation to provide recommendations to the
state on the use of general fund dollars for supporting
beneficiaries. The trust's involvement in both direct
funding and recommending state allocations allowed it to
utilize its expertise and partnerships to advocate for
programs that would help beneficiaries. She emphasized that
the trust's role was not just to provide direct funding but
also to ensure strategic thinking and innovation in
addressing mental health challenges.
Co-Chair Josephson understood that there were three funding
buckets: authority grants, MHTAAR grants, and the
recommendations.
Ms. Wilson responded in the affirmative.
Ms. Wilson continued on slide 12 which included the
trustee's FY 26 operating and capital general fund
expenditure recommendations. She highlighted that the
governor's proposed budget had included about 35 percent of
the trust's recommendations, with most of the operating
budget and mental health-related recommendations being
included. One of the items included in the proposed budget
was the Crisis Call Center, which had a $750,000 increment
with an MHTAAR match. The initiative had been developed in
partnership with the Department of Health (DOH) and aimed
to support the ongoing implementation of behavioral health
crisis response services. The funds would assist in the
establishment of crisis call centers and provide direct
intervention services, warm talk lines, referrals to
treatment, and recovery supports for trust beneficiaries
dealing with severe mental illnesses, substance use
disorders, and at-risk youth. She expressed appreciation
that the program had been included in the governor's
budget.
Ms. Wilson relayed that another recommendation was funding
the Alaska Housing Finance Corporation's (AHFC) special
needs housing grants (SNUG) and the Homeless Assistance
Program (HAP) grants. The programs primarily supported
permanent supportive housing, emergency and transitional
housing services, and provided resources to prevent
homelessness and rapidly rehouse displaced individuals.
Both programs had been longstanding priorities for the
trust, but the governor's FY 26 budget did not include the
trust's recommended general fund allocations for the
programs. She relayed that the Office of Management and
Budget (OMB) had indicated that AHFC's contributions to the
programs had increased, leading to an overall increase in
funding for the programs compared to the previous year. The
budget process was still in its early stages and the trust
planned to continue its collaboration with the legislature
about the recommendations and their potential impact on
trust beneficiaries.
2:18:14 PM
Representative Bynum asked whether the trust would provide
an additional presentation in the future to discuss the
housing programs and home modification initiatives in more
depth, particularly the SNUG and HAP grants.
Ms. Wilson replied that the trust could return for a more
detailed discussion if needed or provide additional
information in writing upon request.
Co-Chair Josephson noted that AHFC often gave a separate
presentation to the committee. He assumed that AHFC would
provide a deeper dive into the SNUG and homeless assistance
programs during their presentation.
Co-chair Foster remarked that he was surprised that HAP had
not been fully funded, especially given the heightened
attention to homelessness in the state in recent years. He
was concerned about the reduction in funding for home
modifications and upgrades. He asked if Ms. Wilson knew the
previous year's request and the actual amount funded.
Ms. Wilson responded that she did not have the information
readily available but would follow up. She emphasized that
the budget was still in development and the figures on the
chart could change.
Co-Chair Josephson recalled that Ms. Wilson had mentioned
that one item was 35 percent funded. He asked for more
information on the item.
Ms. Wilson responded that the 35 percent figure referred to
the overall percentage of the trust's recommendations that
had been included in the proposed budget, with the majority
of the funding allocated to the operating budget rather
than the capital budget.
2:20:35 PM
Ms. Wilson continued to slide 13 and detailed the trust's
focus areas and priorities. The focus areas aligned with
the populations the trust served and included disability
justice, mental health and addiction intervention including
the behavioral health response crisis team, beneficiary
employment and engagement, housing and home and community-
based services, workforce development, and early childhood
intervention and prevention. She explained that the focus
areas and priorities ensured that the trust took a
strategic approach toward meeting beneficiary needs through
both grant-making and advocacy work aimed at systems
change. Over time, the priorities had evolved and were
shaped by stakeholder engagement and guidance from the
trustees. As part of the budgeting process, trustees
approved spending in each of the areas every fiscal year.
Ms. Wilson relayed that each of the focus areas within the
budget aligned with the state's Comprehensive Integrated
Mental Health Program Plan [referred to as the Comp Plan].
She thanked DOH and the Department of Family and Community
Services (DFCS) for their partnership in finalizing the
most recent Comp Plan the previous fall. The trust
supported the effort and worked closely with the state in
developing and implementing it.
2:22:04 PM
Ms. Wilson advanced to slide 14 which detailed the trust's
FY 24 grant awards across its focus and priority areas. In
FY 24, the trust awarded 192 grants totaling approximately
$24 million. The map on the slide displayed 17 dots
representing the locations of the grants, but it did not
include many grants with a statewide impact, such as those
supporting university workforce training, reentry programs,
mental health services for inmates and reentrants, and
expanding access to developmental screenings for infants
and children. She explained that the types of grants
awarded provided support to everything from planning and
data needs to services, facilities, and the training of
quality staff who directly worked with beneficiaries. The
trust prioritized spending that could act as a catalyst for
system improvement, and its grant funds were often
leveraged with other community funders.
Ms. Wilson continued to slide 15 and relayed that one of
the trust's key initiatives was to improve the behavioral
health care crisis response, which had remained a focal
point for several years. The initiative aimed to ensure
individuals in crisis received care in the least
restrictive manner possible and the system ensured that an
individual in crisis had someone to call and a place to go.
The model was known as Crisis Now and was designed to
reduce suicides, avoid unnecessary emergency room and
correctional facility visits, and provide optimal support
to individuals in crisis. Since the initiative's launch
five years ago, the trust had committed approximately $20
million in grant funding to support the cause. Beyond
funding, the trust had played a leadership role by
providing staff expertise to support communities working to
improve their crisis services, connecting partners, and
championing the work. She relayed that Crisis Now's
partnership with the state had been successful and had
allowed significant progress in advancing new services. A
key example was the Fairbanks Mobile Crisis Team, which had
been operational for over three years. The Fairbanks team
reported that 85 percent of calls were resolved in the
community by team members, with only 19 percent requiring
law enforcement intervention or hospital resolution. Prior
to the initiative, almost all such cases required law
enforcement involvement.
Ms. Wilson noted that there were similar mobile crisis
teams operating in Anchorage, Mat-Su, Juneau, and
Ketchikan, with crisis response work underway in many more
communities across the state. She appreciated that local
leaders had embraced the initiative and recognized that
there was a better way to help individuals experiencing
mental health emergencies. She relayed that the trust was
honored to have had a positive impact on these communities.
Co-Chair Josephson thought it was a great effort and
understood it was the result of collaborate work between
the legislature, the governor, and various other offices.
He wished the initiative the best of luck.
Representative Jimmie asked why there were no response
teams in southwest or northwest areas of the state.
Ms. Wilson responded that rural areas in Alaska faced
significant challenges due to their small size and limited
infrastructure. Many of these communities lacked essential
resources such as crisis response teams or hospital beds.
She stated that the trust was actively collaborating with
local leadership to determine how best to adapt the Crisis
Now model to suit the unique conditions of rural Alaska.
The goal was to develop a version of the program that was
tailored to the state's diverse geography and population
needs. She noted that strategies that worked in Anchorage
did not necessarily work in other areas of the state. She
stressed that expanding the program into rural regions
remained a key part of the trust's broader plan. She
clarified the statewide crisis hotline was already
available to all residents of Alaska, but the next step was
to ensure that a physical response was available as well.
The initiative was a good example of an effort that saved
money and time for law enforcement, hospitals, and
emergency rooms and it ensured that people were receiving a
higher quality of care.
2:27:21 PM
Co-Chair Foster requested that the committee receive a
short written description of the current Crisis Now
resources in Kotzebue. He explained that he was curious
about the resource requirements to implement such a program
in a rural setting and expressed interest in exploring
whether it could be replicated in other parts of rural
Alaska.
Ms. Wilson responded that she could share some information
immediately and would follow up with a more detailed
written summary. She relayed that leadership from the trust
had recently met with health care experts and the regional
health cooperative, Maniilaq Health Center, to begin
planning an emergency psychiatric assessment, treatment,
and healing (MPATH) unit at the hospital in Kotzebue. She
explained that MPATH units were intended to function
similarly to crisis stabilization units but were
specifically designed for smaller communities with limited
resources. She would provide more information including the
investment amount in writing.
Co-Chair Josephson would distribute the information to the
committee.
2:28:59 PM
Ms. Warner continued on slide 16 which gave an overview of
TLO. She reiterated that the trust owned approximately 1
million acres of land across Alaska and that TLO operated
under DNR but worked exclusively under contract with the
trust. By statute, TLO had a singular mission to manage
trust lands and resources with the sole objective of
maximizing revenue generation in support of trust
beneficiaries. She outlined the trust's various asset
classes, which included forestry, minerals and materials,
energy, commercial real estate, program-related real
estate, mitigation marketing, and general lands. The
revenues generated through the assets directly supported
the trust's ongoing work. She relayed that trust lands were
managed with long-term sustainability in mind and
consideration of the impact on future generations.
Ms. Warner noted that TLO anticipated earning over $33.3
million in revenue in the current fiscal year. The revenues
would be divided between income, which was projected to be
over $25 million, and principal, which was projected to be
nearly $7.4 million. She emphasized that all decisions
regarding land use were made based on how revenue from a
parcel could be maximized. While TLO made efforts to align
trust land management with public interest when possible,
such alignment was not always feasible.
Representative Hannan noted that although trust lands were
technically public lands, the lands did not operate under
the same rules as other public lands in Alaska. The
adjoining landowners were often not notified of activities
such as timber sales or changes to trust land access, which
created a conflict. For example, a swath of trees could be
unexpectedly cleared, or gravel exported without local
awareness. She understood that TLO's legal mandate was to
generate the highest possible return, but wondered whether
the trust or TLO might adopt a less rigid approach to land
disposals to avoid unnecessary conflict. She relayed that
the absence of a requirement to follow state public
notification rules made the processes appear less
transparent. She assumed that the trust and TLO would
prefer to focus on land management rather than on the
conflicts about the way the land was managed.
Ms. Warner replied that the approach to community
engagement had evolved. She had made efforts over the past
three years to increase transparency and public outreach.
She offered reassurance that TLO followed all state laws
regarding public notice for land disposals, but she also
recognized the intrinsic value in seeking community input
beyond what was legally required. She stated that TLO was
actively working to communicate earlier and more
effectively with communities before development or land
activity occurred.
2:33:16 PM
Representative Hannan noted that many municipalities had
yet to receive their full land entitlements from the state,
but the trust had a legally mandated priority when
selecting lands. As a result, trust lands were often
situated within communities that had alternative land use
preferences but the land would be sold to the highest
bidder. She stated that the process often created friction,
as local governments could have legitimate interests in
specific parcels but could not outbid private developers.
She thought the policy set the trust up for conflict with
local communities. She believed it created tension and
altered the public's perception of the trust.
Ms. Wilson responded that both legal compliance and
examining the broader picture was vital. She appreciated
the insight.
Representative Hannan clarified that her concern was not
about legality but about public perception. She thought
that the law governing trust land disposals was distinct
from that applied to other state land. She understood that
trust lands did not require community-driven land
management plans and decision-making authority rested
solely with the board of trustees. She urged the trust to
consider softening its approach to community engagement and
to explore ways of bringing local stakeholders into the
conversation. She argued that changing the approach would
help build community understanding and support.
Ms. Warner responded that the trust was looking for
creative solutions to meet the needs of both the local
communities and the trust itself. She suggested that TLO
could approach land parcels with more flexibility and the
office was striving for proactive and collaborative
problem-solving. She indicated that further detail on the
office's programs would be provided on the next slide. The
goal was to identify solutions before encountering the kind
of conflicts TLO had experienced in the past.
2:36:49 PM
Ms. Warner advanced to slide 17 which highlighted several
FY 24 accomplishments. She stated that FY 24 had been
another successful year for TLO and it had generated over
$17 million in revenue, which was transferred directly to
the trust. Among the key contributors to the success were
timber sales, which brought in more than $1.9 million and
supported approximately 150 jobs statewide.
Ms. Warner reported that TLO had four active timber sales,
with durations ranging from four to eight years remaining
under contract. The sales included an estimated total of
approximately 47.5 million board feet of timber to be
harvested. The bulk of the revenue came from two major
sales: one near Ketchikan at Shelter Cove, and another near
Naukati Bay on Prince of Wales Island. There was also a
unique forest fuels mitigation project involving the Alaska
Gateway School District which focused on the removal of
hazardous forest fuels from 120 acres of trust land
surrounding the Tok School. The harvested wood was chipped
and processed into biomass fuel, which was then used to
heat the school. The project was an example of beneficial
and sustainable land use.
Ms. Warner indicated that trust land sales in FY 24 were
highly successful. She shared that TLO offered both land
sale auctions for select parcels and ongoing over-the-
counter land sales. Over the course of the last fiscal
year, the office financed land sale contracts and outright
land purchases that were expected to yield more than $10.5
million over the lifetime of the contracts. Once sold, the
parcels could also generate additional revenue for local
taxing authorities.
Ms. Warner continued that that six subdivision projects
were completed across three different communities, which
were Homer, Fairbanks, and Kenai. The office currently had
ten subdivision development projects in various phases of
active development in five different communities across the
state. Initial feasibility work had also begun on 11
additional subdivision projects in FY 24.
Ms. Warner stated that resource development, including
renewable resource development, continued to be a revenue
source for the trust. In FY 24, the office finalized its
first renewable energy project ground lease, which was a
major milestone in diversifying its portfolio. The lease
supported a solar energy project on 680 acres of trust land
near Nikiski. The project proposed 28.5 megawatts of cost-
competitive energy to be interconnected with the Homer
Electric Association utility. The lease was projected to
generate over $3 million in royalty payments to the trust.
The project also included the potential for expansion, with
an option for a second lease that could further increase
the trust's returns.
Ms. Warner shared that TLO was conducting exploratory work
at Icy Cape, which was located approximately 75 miles
northwest of Yakutat. The project focused on a large-volume
placer gold and industrial heavy minerals district, which
included critical minerals. She explained that a mineral
resource estimate and accompanying technical report on one
of the four identified prospects were expected in the
second quarter of FY 25. The prospects were large-scale
placer deposits rather than hard rock deposits, which
significantly reduced the cost of mining and operations and
made the site more attractive to industry.
Co-Chair Josephson asked whether permitting for such a
placer operation would be handled through DNR.
Ms. Warner responded in the affirmative.
2:40:58 PM
Representative Galvin asked about the decline in timber
sales revenue. Based on information found on the TLO
website, it appeared that revenue from timber sales had
dropped by approximately $1 million, which was a roughly 30
percent decrease. She asked if there was any explanation
for the decline.
Ms. Warner responded that overseas markets continued to
pose challenges, which contributed to the decrease in
revenue. She noted that Alaska's timber market was niche,
which added to the complexity.
Ms. Wilson concluded the presentation on slide 18. She
emphasized that the trust was considered perpetual, which
meant that it was accountable not only to present day
beneficiaries but also to future generations. She hoped
that the committee could see how the trust used its annual
expenditures to support beneficiaries through effective and
expert leadership in partnership with stakeholders across
the state. She reiterated that the trust's role was to be a
prudent and strategic overseer.
Co-Chair Foster directed attention to slide 12 and noted
that several items in the trust's recommendations had not
been fully funded by the governor. He asked whether the
administration had communicated the reasons for the
omissions, or whether there was a common theme behind the
decisions.
2:42:49 PM
Ms. Baldwin-Johnson responded that communication was strong
between the trust and the governor's office and OMB
following the trustees' transmittal of budget
recommendations. The governor's office sent a letter in
response, indicating which items were supported and
provided justification for the exclusions.
Co-Chair Foster asked whether there appeared to be a
consistent rationale for the omissions.
Ms. Baldwin-Johnson replied that the reasons varied. For
example, in the case of SNUG and HAP, there had been an
increase in receipts allocated by AHFC, which could have
reduced the perceived need for additional general fund
appropriations. She noted that creative solutions could
address the needs of other entities originally identified
in the trust's recommendations.
Co-Chair Josephson asked for confirmation that the
administration's rationale for not funding SNUG and HAP was
related to AHFC's increased investments in the programs.
Ms. Baldwin-Johnson responded in the affirmative. She noted
that AHFC had designated additional receipts specifically
for those programs.
Representative Stapp requested additional information about
the Coordinated Community Transportation (CCT) line item on
slide 12. He noted that in the FY 24 budget, there had been
a $300,000 MHTARR appropriation directed to Department of
Transportation and Public Facilities (DOT) for CCT. He
relayed that the $300,000 difference aligned with the gap
between the governor's proposed budget and the trust's
current request, and he suggested there was a potential
correlation. He asked why the MHTARR funds were no longer
directed to the CCT program, even though the request
remained the same.
Ms. Baldwin-Johnson responded that the trust had
historically committed MHTARR funds to CCT. She noted that
of the previous MHTARR commitment, $200,000 had been
reallocated within the trust's internal budget. The
reallocation was now directed toward a Senior and
Disability Services line item in the trust's budget, which
was a more targeted communication project for
beneficiaries. She explained that while the allocation of
MHTARR funds had shifted, the trust had not withdrawn its
investment in the program, but had simply chosen a
different approach that aligned more directly with
beneficiary needs.
2:46:29 PM
Co-Chair Josephson asked how the trust responded to
inquiries from members of the public or skeptics about the
tangible results of its investments. He acknowledged that
such questions were often rooted in curiosity or doubt. He
asked how the trust demonstrated that its financial
investments were making a meaningful difference in
improving outcomes for beneficiaries.
Ms. Baldwin-Johnson responded that it was a difficult
question because for any funding organization or
philanthropic entity, measuring true impact could be one of
the most difficult challenges. Every grant at the trust,
whether issued to a nonprofit or a state agency, was tied
to specific objectives and performance metrics that helped
ensure that the trust could monitor and report on the
outcomes of each funded initiative. She noted that
assessing broader improvements in population-level health
outcomes was far more complex. The complexity was due in
part to the collaborative nature of system-wide
interventions as there were many stakeholders involved, not
just the trust. To monitor larger trends, the trust used
tools such as the statewide scorecard and the Comp Plan,
which helped align efforts and provide strategic direction.
She relayed that the trust could clearly measure the impact
of its own grant-making but understanding population health
required broader coordination and a collective evaluation
of efforts.
2:48:46 PM
Mr. Fisher added that understanding the outcomes of trust
investments had become a key interest for the current board
of trustees. He pointed out that while trust grants often
supported organizations that served a mix of trust
beneficiaries and other populations, the board was
committed to better understanding the specific results for
trust beneficiaries. He noted that the board's goal was to
elevate the trust's capacity to analyze and communicate the
impact of its work. He expressed optimism that under Ms.
Wilson's leadership, the trust would enhance its ability to
provide detailed, reliable data to legislators and other
stakeholders, ultimately improving transparency and
accountability.
Co-Chair Schrage noted that while land sales benefited
Alaskans in the near term, the long-term value derived from
the assets was that more limited land was sold. By
contrast, assets retained in the corpus generated sustained
revenue for future generations. He asked whether there was
a reason the trust did not direct more of the proceeds from
land sales into the corpus in order to generate ongoing
returns and preserve long-term value for beneficiaries. He
asked if the idea had been discussed.
Ms. Wilson responded that she had been learning about the
topic and it was an important philosophical and practical
question.
Ms. Warner explained that the revenue from land sales had
been treated as principal income, which had been deposited
into the Permanent Fund to contribute to its long-term
growth. She clarified that while interest payments from
land sale financing had not contributed to the fund's
corpus, the payments had been considered income and used
for operational purposes.
2:52:34 PM
Mr. Fisher added that in addition to revenue from land
sales, the corpus needed to be inflation proofed. He
emphasized that any funds generated had been used to help
secure the corpus for the benefit of future beneficiaries.
Representative Bynum noted that there was an ongoing
housing crisis in Alaska and asked whether TLO had been
focusing on creating more housing opportunities.
Ms. Warner replied that TLO had been prioritizing
subdivision development statewide, particularly in areas
like Ketchikan, where housing issues had been severe. She
noted that the lands the trust had received had been
surveyed and located both within and around communities. To
date, TLO had sold less than 3 percent of its land
portfolio and was focusing primarily on smaller subdivision
parcels. However, the office had been in the process of
subdividing larger tracts of land, with ongoing evaluations
of market demand, the economic viability of projects, and
the cost of necessary infrastructure.
Representative Bynum asked if there was anything
communities could do to accelerate the process.
Ms. Warner responded that there were ways that communities
could help. She pointed out that one of the main barriers
to projects had been the high standards for road
construction required by local communities. There had been
opportunities for collaboration that would have allowed for
adjustments to the road construction requirements and would
make the projects more financially feasible. She shared
that a memorandum of understanding (MOU) had recently been
signed with the City and Borough of Wrangell to support the
mission of the trust. She explained that while the
agreement was non-binding, it represented a mutual
commitment to work together in alignment with both the
trust's needs and the community's needs.
Representative Bynum remarked that he would like to explore
the issue in greater depth as it was important for the
communities in district. He noted that there was growing
pressure on education in Alaska and school districts had
been increasingly vocal about the need for mental health
resources in schools. He asked whether the trust had been
involved in creating stronger relationships with the
Department of Education and Early Development (DEED) to
address these mental health needs in schools.
Ms. Wilson responded that the trust had been actively
involved in the area of youth and childhood interventions,
which included addressing special needs programs for
children. She emphasized that early intervention had proven
beneficial for school performance, and the trust was
working towards dedicating more funding to early
intervention.
2:58:01 PM
Mr. Fisher added that approximately two and a half years
ago, the trustees had taken a special interest in pediatric
and youth populations from a prevention standpoint. He
noted that treatment plans for mental health often received
reimbursement, but prevention plans lacked similar funding.
The trust had been working with organizations focused on
younger populations to help prevent the development of more
severe mental health issues as the children aged.
Representative Bynum asked whether most of the funding for
the initiatives was flowing through grants.
Mr. Fisher replied that the majority of the funding was
provided through grants, though the trust also partnered
with other organizations to supplement the support and
mental health resources. He shared that the trust had also
provided funding for housing related to therapeutic care
and other services. The trust was taking a broader approach
to addressing mental health needs.
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 was HEARD and HELD in committee for further
consideration.
Co-Chair Josephson reviewed the agenda for the following
day's meeting.
ADJOURNMENT
3:00:19 PM
The meeting was adjourned at 3:00 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AMHTA presentation HFIN 020525.pdf |
HFIN 2/5/2025 1:30:00 PM |
HB 53 HB 55 |
| AMHTA Responses to H FIN Committee Questions 2-14-2025 .pdf |
HFIN 2/5/2025 1:30:00 PM |
HB 53 HB 55 |