Legislature(1999 - 2000)
02/03/2000 09:01 AM Senate FIN
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* first hearing in first committee of referral
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SENATE FINANCE COMMITTEE LOG NOTES 02/03/00 GENERAL SUBJECT(S): Joint Meeting with House Finance Committee State of the University Address By: President Mark Hamilton The following overview was taken in log note format. Tapes and handouts will be on file with the Senate Finance Committee through the 21st Legislative Session, contact 465-4935. After the 21st Legislative session they will be available through the Legislative Library at 465-3808. Time Meeting Convened: 9:01 AM Tape(s): SFC-00 # 19 Side A and Side B PRESENT: Representative Mulder Senator Parnell Representative Therriault Senator Torgerson Representative Bunde Senator Donley Representative Austerman Senator Leman Representative Davies Senator Wilken Representative Foster Senator Adams Representative Grussendorf Senator P. Kelly Representative Phillips Senator Green Senator Phillips ALSO PRESENT: SENATOR JOHNNY ELLIS; SENATOR KIM ELTON; SENATOR JERRY MACKIE; REPRESENTATIVE TOM BRICE; REPRESENTATIVE JERRY SANDERS; REPRESENTATIVE MARY KAPSNER; MARK HAMILTON, PRESIDENT, UNIVERSITY OF ALASKA; LOG SPEAKER DISCUSSION 000 CO-CHAIR PARNELL Introduction 27 MARK HAMILTON, PRESIDENT, UNIVERSITY OF ALASKA Introductions of the regents present in the audience. I said I need some money, you said you need some results. I listened to you and here is my report. University of Alaska needed $16.3 I understand it was hard for you to get what you did for us. This summer is the first time in years we did not have to figure out which courses to cut and which staff to let go to meet our budget. 70 I traveled around the state because you said the university has to be responsive to the needs of the state so we asked them what they needed from us. Of the money you gave us, $5.6 million was spent to fulfill contractual salary adjustments. That left only one-half million dollars. I borrowed an additional one million internally from savings of the Retirement Incentive Program (RIP) That $1.5 million was used as seed money to start critical programs. 106 Detailed the efforts in starting the two- year nursing program. 119 Process technology identified a two-year program to replace the aging technical workforce on the North Slope. British Petroleum hires a significant number of the top university graduates in Alaska. This means great jobs for Alaskans. 147 The transportation summit was held and the University of Alaska has addressed the employment needs of this industry as well. 155 Testing for teachers to ensure they can adequately prepare students for the upcoming exit exams. 168 In the area of information technology, we need to produce in next three years, a critical mass of workers. 175 Because there are so many vocational programs and they are varied across the state, we had to pick three to focus our efforts on. We chose aerospace, applied business and heavy equipment operations. Speaking about the employment needs of the aerospace industry in Alaska. 200 Fisheries industry programs. 204 Accountability of programs Introduced several business individuals in the audience who traveled on their own expense to tell about the investments they have made in the University of Alaska for programs to train workers for their industry. 227 We cannot do more without significantly more funding. We cannot reduce staffing levels. 236 After the RIP ended and many instructors retired, the remaining faculty is paid only a competitive wage to other institutions. The University of Alaska offers less than half of the bachelor degree programs of most universities, and a significantly lower amount of higher degree programs. 255 Handout: University of Alaska, Fiscal Year 2001 Operating and Capital Budget Request Page 2: University of Alaska Systemwide, Where Alaska's Future Begins, University of Alaska Proposed FY 01 Operating Budget Request Increment Summary This shows an overview of the budget request A great deal of money must be expended just to maintain your head above water. Information technology will change the economy in the twenty-first century. Comments about the global economy and Alaska's role. The only question is if Alaskan's will be employed in these industries stationed in the state. 365 We can make these jobs in this state through the university. Someone will take the jobs, whether they are Alaskans or someone Outside, who takes their earnings out of the state. 370 The university is not the best way; it is the only way to meet this goal. 380 In my travels, I heard from people saying they did not want to see growth in Alaska. It is not a matter of growth but economic development and diversification. If you have to import talent from outside then there is growth. To develop without growth, you need employ people already here who are already using roads, schools and collecting permanent fund dividends. 395 $3.9 million is only a small amount of what has been earned this past year since the increase in oil prices. 400 I will continue to produce results. 405 SENATOR WILKEN Requested more information about the progress of the Alaska's Scholars Program 408 GENERAL HAMILTON All the dreams for the state are lost if the brain drain continues. The scholarship program has changed the atmosphere of the university by the influx of top students. When more than half of the state's top talent attend that state's university then the university is successful. 435 Thank you for passing enabling legislation so this program could be implemented. 439 I've kept my promise to not ask for additional money on this program this year. However, I will probably come back next year requesting more funds. 447 SENATOR P. KELLY Spoke of a brilliant student in his district who chose to participate in the program then go to MIT for a master's degree. 457 REPRESENTATIVE PHILLIPS Do the new programs for heavy equipment, applied business and aerospace include private sector contributions? GENERAL HAMILTON These are almost exclusively private contributions from inside Alaska. Spoke about the need for a central point of contact and the establishment of a corporate liaison in the university. I told Alyeska they are terrible at predicting the their future employment training needs. We are now working together to remedy to better anticipate the needs and prepare courses to train workers for these jobs. They are providing the staff and other support to make this happen. 490 This is the only university in country that does this. We are business friendly. 500 Other industries are requesting the same. We have to put them off and concentrate on Alyeska and do it well before expanding program. 506 SENATOR PHILLIPS The September 14 advisory vote showed that Alaskans do not want to spend more money on government 515 GENERAL HAMILTON This is not a zero balance issue. It is an investment in the future. The University of Alaska generates wealth. People who go to college make better citizens, more likely to vote, run for office, not go on public assistance, go to jail, etc. 538 SENATOR PHILLIPS There is no personal income tax to collect from the better jobs these graduates would get. 539 GENERAL HAMILTON Correct, but they generate the industry that pays the taxes. 541 SENATOR PHILLIPS We have to figure out "what part of no we didn't understand" We have to collectively set priorities whether they be a larger permanent fund dividend, or more for government services. My constituents want reduced government spending. 566 REPRESENTATIVE DAVIES What is unique about university research in Alaska? 572 GENERAL HAMILTON There is a staggering difference between Alaska and the rest of the country. In the other states, six-times of the research is done by industry. In Alaska, only 11 percent of research is done by industry and the university does 51 percent. The amount of jobs created by research moneys (no general funds) would place the University of Alaska as the third highest employer in the state. 589 Tape SFC-00 #19 Side B 9:49 AM GENERAL HAMILTON Research is great business in Alaska. The research will be done and done in Alaska, the only question is whether the work will be done by Alaskans or outside facilities. 574 The amount of money spent on research versus instruction is on par with rest of the US. It is well worth the expenditure. 569 REPRESENTATIVE BUNDE Thank you for joining last summer's effort to try to convince Alaska's of the need to set aside part of the permanent fund's earnings for government spending. The election statistics can be interpreted in interesting ways. There was a very low voter turnout. Thank you for bringing the university down from the ivory tower to talk to industry and set up nontraditional university training jobs. 548 CO-CHAIR PARNELL Referring to the budget handout and the total expenditures for FY 99 and FY 00. What results are we getting for the extra funds spent last year? 540 GENERAL HAMILTON I could tell you dime-by-dime. The extra $1.5 million is an artificial pot because it was "borrowed" internally from the university. That money paid for obligated salary adjustments. Investment in staff. Extra funds were spent to jumpstart critical programs. More funds are needed to keep these going since they will fail without continued support. 526 Breakdown of research funds: Of every four dollars, $3.25 gets spent on the actual research and 75 cents goes back into the general fund. 519 Research is a very healthy non-general fund entity. I'm asking you for the authority to attract those research grants with general fund monies. To obtain funds, you must show capacity to do the project and you also need to have a match. 506 REPRESENTATIVE MULDER I wish all departments had been as responsible in addressing missions and measures. You said earlier you felt that the new initiatives would result in increased student enrollment. Have you seen an increase? 499 GENERAL HAMILTON Some courses have never been offered before so those students are new to the university. The only measurable increase in students is traditional first-time freshmen. We are attracting individuals into vocational programs. Any state university's product is really a service to the state. Students are not really customers; they are consumers. Tuition doesn't pay for all the costs of their education. 465 REPRESENTATIVE MULDER You mentioned that 83 students are enrolled in the oil field program. How many are in the other new programs such as nursing? GENERAL HAMILTON Will get that information for you. REPRESENTATIVE MULDER Estimate? GENERAL HAMILTON About 50 or 60 for each. REPRESENTATIVE MULDER I would like that information for each new program so we can see the growth these programs create. 454 REPRESENTATIVE BRICE I appreciate responsiveness of the university to meet the needs of industry. What kind of investment of hard dollars and in-kind services have these industries made? GENERAL HAMILTON It is significant. The pay half of the university's corporate liaison position salary plus the use of their staff. Some of the in-kind service is their time. 436 SENATOR LEMAN I am encouraged by the investment of industry. What conversations are going on with very large companies such as Microsoft to determine their needs? 424 GENERAL HAMILTON The industry investment in the State of Texas was helpful but only happened after a 56 percent rise in general funds over ten years to build the capacity to address large industry needs. A comprehensive investment in education is a large task. It starts with pre-natal care and continues through K-12 and university education 385 SENATOR LEMAN Please speak of awards and outstanding achievement of students and groups. 382 GENERAL HAMILTON I am proud of the rifle team winning the national championship and destroying their past records. The finance club was given real money to invest for their program and they were very successful. When asked by CNN how many were getting their degrees in finance, they said none because the degree is no longer offered since the retirement of finance instructors. I intend to change that and will offer that degree again. 353 REPRESENTATIVE KEMPLEN [out of range of the microphone] Question about research investments and products of that research. Research develops new products and innovations that create jobs and earn money. Request update on the Anchorage library. 326 GENERAL HAMILTON The university does not have a great record of spin-off industries as a result of research efforts. Few of our research grants or research efforts are applied research that is funded by private industry. Most is federally funded. Speaking of some research projects involving salmon uses. 267 SENATOR P. KELLY What are you going to do with the $16 million requested in this year's budget? 265 GENERAL HAMILTON Expand the associate degree and certificates level to eventually increase the bachelor and masters degrees level. Some of the money is to match federal funds for fisheries research and other natural resources areas. The university has been beaten down so long that we need to get good staff. I want better infrastructure so students don't have to wait in line for days to get registered. I want more counselors to help students get degrees in a reasonable amount of time. 223 REPRESENTATIVE BUNDE Collaboration with business. The business community has communicated that they want cheaper and more effective government. I hope you will help them understand that if they continue to cut state government, it will impact the university. GENERAL HAMILTON I will indeed. 212 REPRESENTATIVE BRICE Has the Department of Education and Early Development or any local school districts approached the university asking for help with the upcoming exit exams? GENERAL HAMILTON Where the responsibility of K-12 ends and the University begins is foggy and I hope it gets foggier because there is a real interrelationship with the abilities of the teachers and the progress of the students. We are to serve the state of Alaska and be part of the education solution. I am not interested in taking from the formula-funding program. 162 REPRESENTATIVE WILLIAMS How much income generated from your land holdings and do you support additional land grants to the university? GENERAL HAMILTON Exemplary, we've been wonderful stewards. This is the source of the money for the Alaska Scholars program. I don't care what form an endowment comes in; I want a long-term source of income for the university. However, land will not solve any short-term problems. 127 CO-CHAIR PARNELL Conclusion 123 Adjourn 10:29 AM SENATE FINANCE COMMITTEE LOG NOTES 02/03/00 Page 8
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