Legislature(2015 - 2016)SENATE FINANCE 532

01/29/2015 09:00 AM Senate FINANCE


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09:03:09 AM Start
09:04:36 AM Presentation: Mental Health Trust Fy 16 Budget
10:49:46 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Overview FY17 Operating Budget TELECONFERENCED
Departments: Environmental Conservation and
Mike Barton, Board President
                 SENATE FINANCE COMMITTEE                                                                                       
                     January 29, 2015                                                                                           
                         9:03 a.m.                                                                                              
                                                                                                                                
9:03:09 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Kelly  called the Senate Finance  Committee meeting                                                                    
to order at 9:03 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Peter Micciche, Vice-Chair                                                                                              
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Donny Olson                                                                                                             
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Mike  Barton, Board  President, Alaska  Mental Health  Trust                                                                    
Authority;  Jeff  Jessee,  Chief Executive  Officer,  Alaska                                                                    
Mental  Health Trust  Authority;  Ryan  Ray, Staff,  Senator                                                                    
Pete Kelly.                                                                                                                     
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
^PRESENTATION: MENTAL HEALTH TRUST FY 16 BUDGET                                                                               
                                                                                                                                
9:04:36 AM                                                                                                                    
                                                                                                                                
MIKE  BARTON, BOARD  PRESIDENT, ALASKA  MENTAL HEALTH  TRUST                                                                    
AUTHORITY,  discussed the  PowerPoint presentation,  "Senate                                                                    
Finance  Committee; January  29, 2015;  Trust Alaska  Mental                                                                    
Health  Authority"  (copy  on  file).  He  highlighted  some                                                                    
members  of the  Mental Health  Trust Board  present at  the                                                                    
meeting.  He looked  at slide  1, "Trustees."  He introduced                                                                    
other board trustees in the  committee room. He communicated                                                                    
that trustees  were advised by statutory  advisor groups the                                                                    
Governor's  Council on  Disabilities and  Special Education,                                                                    
Council  on  Aging,  Alaska Mental  Health  Board,  and  the                                                                    
Advisory Board on Alcoholism and Drug Abuse.                                                                                    
                                                                                                                                
JEFF JESSEE,  CHIEF EXECUTIVE OFFICER, ALASKA  MENTAL HEALTH                                                                    
TRUST AUTHORITY, explained slide 2, "Trust Beneficiaries":                                                                      
                                                                                                                                
     Mental Illness                                                                                                             
     22,000                                                                                                                     
     Developmental disabilities                                                                                                 
     13,000                                                                                                                     
     Chronic   alcoholism    and   other   substance-related                                                                    
     disorders                                                                                                                  
     20,000                                                                                                                     
     Alzheimer's disease and related dementia                                                                                   
     5,000                                                                                                                      
     Traumatic brain injury                                                                                                     
                                                                                                                                
Mr. Jessee  listed trust beneficiaries on  slide 2 including                                                                    
individuals     with    mental     illness,    developmental                                                                    
disabilities, chronic  alcoholism and other  substance abuse                                                                    
disorders,  Alzheimer's disease  and  related dementia,  and                                                                    
traumatic  brain injury.  He relayed  that prevention  was a                                                                    
significant part  of the trust's mission;  things that could                                                                    
be   done  to   prevent  individuals   from  ending   up  in                                                                    
beneficiary status.                                                                                                             
                                                                                                                                
Mr. Jessee  highlighted slide 3,  "Trust Cash Assets  at End                                                                    
of  FY14." He  reported  that the  financial  health of  the                                                                    
trust was very  good. He detailed that  the Alaska Permanent                                                                    
Fund had been doing well  and the trustees had established a                                                                    
robust financial system. He relayed  that the trust had been                                                                    
able to  make its  payout even when  the Permanent  Fund had                                                                    
done poorly. He  stated that the system had  stood the trust                                                                    
in good stead for many years.                                                                                                   
                                                                                                                                
Senator  Dunleavy  wondered   if  there  were  environmental                                                                    
concerns  and other  related  concerns  when developing  the                                                                    
Trust-owned land. Mr. Jessee replied in the affirmative.                                                                        
                                                                                                                                
Senator Dunleavy surmised  that the purpose of  the fund was                                                                    
at times hindered by some  that preferred that the lands not                                                                    
be  developed.  Mr.  Jessee replied  that  there  were  some                                                                    
objections,  but the  Trust remained  resolute about  moving                                                                    
through  the obstacles.  He used  the example  of old-growth                                                                    
timber  development   in  Southeast  Alaska,  and   a  major                                                                    
exchange with the United Stated Forest Service.                                                                                 
                                                                                                                                
9:10:24 AM                                                                                                                    
                                                                                                                                
Senator Dunleavy commented that big  oil and big timber were                                                                    
not the only financial entities  that were facing issues. He                                                                    
felt that "big mental health trust" was also facing issues.                                                                     
                                                                                                                                
Vice-Chair Micciche  wondered if the  unit was on  an annual                                                                    
basis. Mr. Jessee replied that  there was no official way to                                                                    
count beneficiaries. The assumption  was based on prevalence                                                                    
data, which was  an estimate of the  number of beneficiaries                                                                    
at any given time.                                                                                                              
                                                                                                                                
Vice-Chair  Micciche   commented  that  10  percent   was  a                                                                    
significant number of Alaskans. Mr. Jessee agreed.                                                                              
                                                                                                                                
Mr.  Jessee looked  at slide  4, "Revenues  and Expenditures                                                                    
(in  millions)."   He  stated   that  the  Trust   was  very                                                                    
resilient,  because  of  the  way  it  was  established.  He                                                                    
discussed that when revenues had  been in the negative there                                                                    
had  continued to  be  a flow  of money  into  the trust  to                                                                    
assist with beneficiary services.                                                                                               
                                                                                                                                
Mr. Jessee  displayed slide 5,  "Trust Land  Office Revenue,                                                                    
Generated  in  FY14." He  elaborated  that  the Land  Office                                                                    
continued  to  do  a  stellar   job  of  generating  revenue                                                                    
(principal and  income) for  the trust.  He shared  that the                                                                    
office had generated nearly $100  million into the principal                                                                    
of the trust, which continued  to generate revenue over time                                                                    
(typically around $4 million annually).                                                                                         
                                                                                                                                
Mr. Jessee  discussed slide 6,  "Impact at a  Glance, Grants                                                                    
awarded in FY14."  He addressed grants awarded in  FY 14. He                                                                    
explained that  two-thirds of the  grant funds  came through                                                                    
state   government   as   Mental  Health   Trust   Authority                                                                    
Authorized  Receipts (MHTAAR)  and  one-third came  directly                                                                    
from  AMHTA.  He detailed  that  the  goal  was to  have  an                                                                    
integrated health  system and the  trust liked  working with                                                                    
state agencies  in a collaborative way;  however, there were                                                                    
situations when  a direct grant  was the most  efficient and                                                                    
effective  option.  He expounded  that  many  of the  direct                                                                    
grants  were  to  assist  with   capital  projects  for  new                                                                    
facilities, renovations, or other.                                                                                              
                                                                                                                                
Mr. Jessee looked at slide  7, "FY16 Anticipated Income." He                                                                    
showed anticipated income in FY  16 totaling $28 million; it                                                                    
included a payout from principal  of $20 million, $3 million                                                                    
from prior  years' average lapse, additional  funds from the                                                                    
Land Office average spendable income, and interest average.                                                                     
                                                                                                                                
Co-Chair Kelly  queried the certification  of the  budget to                                                                    
determine that  it met the constitutional  demand for mental                                                                    
health  spending.  Mr.  Jessee  replied  that  the  trustees                                                                    
recommend a  level of general  fund (GF) in addition  to the                                                                    
trust funding. He explained that  the legislature must write                                                                    
the   governor  a   letter,  if   they  do   not  fund   the                                                                    
recommendations at the requested level.                                                                                         
                                                                                                                                
9:15:26 AM                                                                                                                    
                                                                                                                                
Mr. Jessee slide 8, "Utilize POMV strategy":                                                                                    
                                                                                                                                
     The Trust's base payout is 4.25 percent of the average                                                                     
     value of the fund's cash assets                                                                                            
                                                                                                                                
          -Funding approach ensures relatively stable cash                                                                      
          flow from year to year                                                                                                
                                                                                                                                
Mr. Jessee  emphasized that the trust  utilized a percentage                                                                    
of  market  value  (POMV)  strategy,   which  meant  it  was                                                                    
dependent upon the revenue generated  by the Permanent Fund.                                                                    
He detailed  that the trust's  base payout was  4.25 percent                                                                    
of  the  average  value  of   the  fund's  cash  assets.  He                                                                    
explained  that the  method had  enabled the  trust to  have                                                                    
financial stability  in good  and bad  times. He  knew there                                                                    
had been many  discussions about what would  happen with the                                                                    
Permanent  Fund  and  whether  it would  switch  to  a  POMV                                                                    
methodology. He furthered  that the trust was  an example of                                                                    
a  fund that  had  switched  to POMV  and  had created  much                                                                    
stability for the AMHTA.                                                                                                        
                                                                                                                                
Senator  Bishop  wondered  if there  were  be  a  discussion                                                                    
regarding  POMV  later  in   the  presentation.  Mr.  Jessee                                                                    
responded that  there would not  be further  presentation on                                                                    
POMV.                                                                                                                           
                                                                                                                                
Senator Bishop  wondered if the  4.25 percent  was regularly                                                                    
reviewed.  Mr.  Jessee  replied   that  the  percentage  was                                                                    
regularly  reviewed.  He  stated that  the  Trust  Authority                                                                    
hired  Callan  Associates to  analyze  the  fund, and  trust                                                                    
increases  its payout  authority  each time  the reserve  is                                                                    
fully  funded and  inflation proof.  He  explained that  the                                                                    
recent downturn in the economy  had a negative effect on the                                                                    
reserves.  There  were   discussions  regarding  the  payout                                                                    
limit.                                                                                                                          
                                                                                                                                
9:20:33 AM                                                                                                                    
                                                                                                                                
Vice-Chair Micciche wondered if the  fund was managed by the                                                                    
Permanent  Fund Corporation.  Mr.  Jessee  replied that  the                                                                    
majority  of the  fund  was managed  by  the Permanent  Fund                                                                    
Corporation,  and half  of the  reserve was  managed by  the                                                                    
Department of Revenue (DOR).                                                                                                    
                                                                                                                                
Vice-Chair  Micciche  asked  if  the  asset  allocation  was                                                                    
identical.  Mr.  Jessee  replied   in  the  affirmative.  He                                                                    
explained  that  it  was  like  a  mutual  fund.  The  trust                                                                    
received  its share  of the  profit or  loss, and  the trust                                                                    
paid its share of expenses.                                                                                                     
                                                                                                                                
Vice-Chair Micciche remarked that FY  14 had a return of $82                                                                    
million, with a  $100 million difference. He  noted that the                                                                    
five-year projections were conservative.  He wondered if the                                                                    
projections accounted for the  downturns. Mr. Jessee replied                                                                    
in the  affirmative. He explained  that the trust  relied on                                                                    
the   Permanent   Fund   projections.  He   remarked   that,                                                                    
historically, the  Trust had  weathered two  severe economic                                                                    
downturns.                                                                                                                      
                                                                                                                                
Mr. Jessee  addressed slide 9, "FY16  GF/MH Recommendations"                                                                    
(millions):                                                                                                                     
                                                                                                                                
     IT Application/Telehealth Service System Improvements:                                                                     
     $100.0 MHTAAR; $100.0 GF/MH                                                                                                
     National Family Caregiver Grant Program: $325.0 GF/MH                                                                      
     Senior In-Home Services: $350.0 GF/MH                                                                                      
     Long-Term Care Ombudsman Office - Increment: $35.0                                                                         
     GF/MH                                                                                                                      
     Area Health Education Centers: $330.0 GF/MH                                                                                
    Licensed Marriage and Family Therapist: $25.0 GF/MH                                                                         
     TOTAL: $100.0 MHTAAR; $1,165.0 GF/MH                                                                                       
                                                                                                                                
Mr.  Jessee  explained  that  a   bulk  of  the  funds  were                                                                    
designated to  the National  Family Caregiver  Grant Program                                                                    
and Senior  In-Home Services. He  addressed that  during the                                                                    
difficult  financial  climate  it would  be  challenging  to                                                                    
determine how  to have  a sustainable  budget in  the short-                                                                    
term,  while  looking  at   strategic  investments  for  the                                                                    
future.  He   discussed  challenges  related  to   an  aging                                                                    
population  such  as  the importance  of  supporting  family                                                                    
caregivers,  in-home  caregiving,  and home  healthcare.  He                                                                    
highlighted  the  potential  for  caregiver  burnout,  which                                                                    
would  mean individuals  requiring  care  would need  higher                                                                    
levels of  care. He  referred to higher  levels of  care and                                                                    
the necessary long-term thinking  associated with the issue.                                                                    
He  referenced  previous  discussions with  Co-Chair  Neuman                                                                    
related to recidivism. He elaborated  that some things could                                                                    
be done to save money in the  budget, but it was not a smart                                                                    
fiscal strategy  if it meant  the state was  heading towards                                                                    
building  another prison  in upcoming  years. He  noted that                                                                    
the senior  care issues were  an area of  particular concern                                                                    
because  they  would only  continue  to  increase in  coming                                                                    
years. He  briefly highlighted increments for  the Long-Term                                                                    
Care Ombudsman  Office, area  health education  centers, and                                                                    
the  licensed  marriage  and family  therapist  program.  He                                                                    
discussed a  proposed partnership on  information technology                                                                    
application  telehealth  service   system  improvements.  He                                                                    
stated that it was necessary  to look at alternative ways of                                                                    
delivering cost  efficient and  effective services  in order                                                                    
to  build  a  long-term   sustainable  budget.  He  believed                                                                    
telemedicine needed to  be at the top of the  list. He noted                                                                    
that there  were significant  opportunities to  partner with                                                                    
tribal health and education systems.                                                                                            
                                                                                                                                
9:27:09 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly  remarked the previous year's  budget allowed                                                                    
for  $6 million  for  broadband.  Senator Hoffman  clarified                                                                    
that it was probably approximately $10 million.                                                                                 
                                                                                                                                
Co-Chair Kelly  noted that the  Tribal Health  had broadband                                                                    
capacity  in  each  community. Mr.  Jessee  replied  in  the                                                                    
affirmative.                                                                                                                    
                                                                                                                                
Co-Chair  Kelly wondered  if the  money for  health concerns                                                                    
and  education   concerns  should  be   considered  separate                                                                    
concerns.   Mr.  Jessee   replied  that   there  were   some                                                                    
duplications within the tribal health system. H                                                                                 
                                                                                                                                
Co-Chair  Kelly asked  if the  broadband was  available, and                                                                    
only  needed to  be  purchased. Mr.  Jessee  replied in  the                                                                    
affirmative.  He shared  that there  were some  clinics with                                                                    
the telemedicine carts  in the small villages  that were not                                                                    
utilized  eight  hours  per  day. He  felt  that  using  the                                                                    
broadband for other purposes could generate revenue.                                                                            
                                                                                                                                
Co-Chair  Kelly queried  the definition  of a  "telemedicine                                                                    
cart." Mr. Jessee replied that it  was a cart with a variety                                                                    
of  medical  instruments  that was  created  by  the  tribal                                                                    
health   community.  The   readings  could   then  be   sent                                                                    
electronically to a regional hospital.                                                                                          
                                                                                                                                
Senator Hoffman  did not know if  additional broadband would                                                                    
be  available in  Bethel. He  shared  that GCI  must keep  a                                                                    
certain amount of broadband for the health facilities.                                                                          
                                                                                                                                
9:31:55 AM                                                                                                                    
                                                                                                                                
Mr.  Jessee slide  10,  "FY16  Capital Recommendations."  He                                                                    
explained that  the slide  included historical  numbers that                                                                    
had  gone   into  the  capital  budget   to  cover  deferred                                                                    
maintenance on nonprofit  facilities, home modifications and                                                                    
upgrades to  retain housing for elderly  family members, the                                                                    
Homeless  Assistance  Project   and  Special  Needs  Housing                                                                    
Grant,  and coordinated  transportation. He  elaborated that                                                                    
home modifications were  a good investment if  it allowed an                                                                    
elderly family  member to remain  at home,  thereby reducing                                                                    
long-term  costs  for the  state  for  out-of-home care.  He                                                                    
relayed  that   a  significant   portion  of   the  Homeless                                                                    
Assistance Project  funding went towards  operating homeless                                                                    
assistance  programs; services  for the  homeless population                                                                    
would  cease without  the funding.  The trust  had partnered                                                                    
with the  Alaska Housing Finance  Corporation (AHFC)  on the                                                                    
special  needs  housing grant  to  secure  housing for  high                                                                    
users  of community  services. He  referred  to the  Housing                                                                    
First program under evaluation by  the University of Alaska.                                                                    
He detailed  that the program  did not require  residents to                                                                    
get  sober  prior  to  being housed.  The  strategy  was  to                                                                    
provide  housing first,  which increased  the health  of the                                                                    
individuals  while  dramatically reducing  costs  associated                                                                    
with hospital visits, alcohol, and  other. The hope was that                                                                    
some  of  the  individuals  would  move  on  into  permanent                                                                    
housing.  Coordinated  transportation  helped  beneficiaries                                                                    
access needed services and work.                                                                                                
                                                                                                                                
Vice-Chair  Micciche  wondered  how the  Medicaid  expansion                                                                    
would affect the Mental Health  Trust and its beneficiaries.                                                                    
Mr.  Jessee replied  that there  would be  some slides  that                                                                    
address that question.                                                                                                          
                                                                                                                                
Senator  Hoffman  asked  for   more  information  about  the                                                                    
Homeless Assistance Project. He  wondered if the program was                                                                    
only specifically  in Anchorage.  Mr. Jessee  responded that                                                                    
the program was  in other parts of the  states, and provided                                                                    
core  funding for  shelters  and  other homeless  assistance                                                                    
programs.                                                                                                                       
                                                                                                                                
Mr.  Jessee addressed  slide  11  titled "Established  Focus                                                                    
Areas." He  spoke to disability justice  related to reducing                                                                    
recidivism and pulling  individuals out of the  cycle of the                                                                    
criminal justice  system through therapeutic,  mental health                                                                    
courts, and  other. He discussed substance  abuse prevention                                                                    
and  treatment,  which  the trust  believed  it  could  make                                                                    
progress on  over time. He  reminded the committee  that the                                                                    
McDowell  Group had  reported the  cost of  alcohol as  $1.2                                                                    
billion  to the  State of  Alaska. He  asked how  the number                                                                    
could  be  accurate.  In  response,  he  addressed  criminal                                                                    
behavior  related  to  alcohol,  child  protection  and  the                                                                    
Office of  Children's Services  caseload driven  by alcohol,                                                                    
lost  productivity at  work  due to  alcohol  abuse, all  of                                                                    
which represented  a substantial costs. He  reasoned that if                                                                    
demand for alcohol could be  cut it would have a significant                                                                    
impact.   He  spoke   to  the   importance  of   beneficiary                                                                    
employment and engagement; with  an emphasis on getting real                                                                    
jobs in the  community. He stated that whether  the price of                                                                    
oil  was below  $50  or  above $100,  the  trust wanted  its                                                                    
beneficiaries  to  be  the  least  dependent  on  government                                                                    
programs  as possible.  He  elaborated that  it  was in  the                                                                    
beneficiaries' long-term  interest in terms of  services and                                                                    
as fully  functional members of the  community. He mentioned                                                                    
advertisements produced  by AMHTA  with the goal  of getting                                                                    
employers to  understand that trust beneficiaries  were real                                                                    
workers; in  many cases they  were more  reliable, longevity                                                                    
was better,  and they were  appreciative to get a  check. He                                                                    
addressed workforce development and efforts in the area.                                                                        
                                                                                                                                
Co-Chair  Kelly  asked if  there  was  a long-term  plan  to                                                                    
reduce  recidivism. Mr.  Jessee  replied  that both  finance                                                                    
committees  had recently  charged  a number  of agencies  to                                                                    
produce  a  recidivism  reduction  plan, which  was  due  on                                                                    
February 2,  2015. There was  a recognition  that recidivism                                                                    
was  more  than an  issue  for  the usual  criminal  justice                                                                    
programs,  because it  included  various other  departments.                                                                    
Successful reentry  and reducing recidivism  required people                                                                    
to  have safe,  supported housing;  a job;  and support  for                                                                    
their recovery.                                                                                                                 
                                                                                                                                
Co-Chair Kelly wondered if there  was research regarding the                                                                    
original reason  for the person's incarceration.  Mr. Jessee                                                                    
replied that  the therapeutic courts, mental  health courts,                                                                    
and  various other  programs were  working to  determine the                                                                    
underlying causes.                                                                                                              
                                                                                                                                
Co-Chair  Kelly  stressed that  the  number  remained at  65                                                                    
percent.                                                                                                                        
                                                                                                                                
Vice-Chair  Micciche  noted  that  10  percent  of  Alaskans                                                                    
received  MHT  services,  and  65   percent  of  the  prison                                                                    
population received MHT services.  He queried the recidivism                                                                    
rate   comparison  between   MHT   beneficiaries  and   non-                                                                    
beneficiaries. Mr.  Jessee stressed that  each beneficiaries                                                                    
may not  necessarily receive MHT services.  He remarked that                                                                    
some  of  those  beneficiaries   were  unserved  outside  of                                                                    
incarceration. He agreed to provide further information.                                                                        
                                                                                                                                
Mr.   Jessee   addressed   the   importance   of   workforce                                                                    
development  on slide  11. He  noted that  workforce demands                                                                    
could increase if Medicaid expansion  took place. He relayed                                                                    
that  AMHTA  had the  infrastructure  in  place through  its                                                                    
trust training  collaborative to ensure it  had people ready                                                                    
to  take  the  jobs.  He looked  at  housing  and  long-term                                                                    
services   and  supports   for  seniors   and  others   with                                                                    
disabilities, which  would enable  them to  stay at  home to                                                                    
the maximum extent possible.                                                                                                    
                                                                                                                                
9:42:21 AM                                                                                                                    
                                                                                                                                
Mr. Jessee highlighted slide 12, "Current Priorities":                                                                          
                                                                                                                                
     Medicaid Expansion and Reform                                                                                              
                                                                                                                                
     Recidivism                                                                                                                 
                                                                                                                                
     Substance Abuse Prevention and Treatment                                                                                   
                                                                                                                                
Mr.  Jessee  addressed  Medicaid   expansion  on  slides  13                                                                    
through  15. He  relayed  that expansion  would impact  many                                                                    
trust beneficiaries. He stated  that projections were around                                                                    
40,000.  He  stressed  that the  expansion  opportunity  was                                                                    
particularly significant  for single males between  the ages                                                                    
of 18 to 65 (who had  not been eligible previously), many of                                                                    
whom  were  using  substance abuse  treatment  services.  He                                                                    
continued  that  the  Division   of  Behavioral  Health  was                                                                    
estimating  that 5,000  beneficiaries would  become Medicaid                                                                    
eligible. He  elaborated that as  the new  population gained                                                                    
coverage there would be some  offsets and savings to general                                                                    
funds. He stated that initially  Medicaid expansion would be                                                                    
100  percent covered  and would  drop to  90 percent  in the                                                                    
future. He expounded that the  needed services would not all                                                                    
be  covered by  Medicaid.  Another  important component  was                                                                    
timing related  to expansion and  when the savings  would be                                                                    
recognized (e.g. July  1, 2015 or a later time).  He did not                                                                    
believe  the  state  would  have  100  percent  of  Medicaid                                                                    
expansion on July 1.                                                                                                            
                                                                                                                                
Mr. Jessee  explained that the Trust  expected the expansion                                                                    
to result  in savings. He  felt that the transition  was not                                                                    
perfect, because there  would be some people  who would gain                                                                    
and lose services.  He added that there should  be some off-                                                                    
sets over time.                                                                                                                 
                                                                                                                                
Mr. Jessee  addressed slide 16, "Medicaid  Expansion: Impact                                                                    
on DOC":                                                                                                                        
                                                                                                                                
     -In FY14, Alaska Department of Corrections processed                                                                       
     approximately $8.5 million in billings for inmate in-                                                                      
     patient stays that lasted more than 24 hours.                                                                              
                                                                                                                                
     -Under Medicaid expansion, it is estimated that $6.8-                                                                      
     $7.65 million could be paid for by federal Medicaid                                                                        
     rather than State funds based on 80 percent-90 percent                                                                     
     of the population being eligible.                                                                                          
                                                                                                                                
          This is an estimate based on what we know now and                                                                     
          our interpretation of the expansion rules so the                                                                      
          numbers may change.                                                                                                   
                                                                                                                                
Mr.  Jessee  remarked  that   inmates  may  become  Medicaid                                                                    
eligible and  some of the  costs for inmate  inpatient stays                                                                    
may be offset. He pointed  to the estimate that $6.8 million                                                                    
to $7.65  million could be  paid for with  federal Medicaid,                                                                    
but believed the savings would  not be achieved in the first                                                                    
year. He emphasized  that the savings were  all dependent on                                                                    
the  timing of  how expansion  was implemented.  He did  not                                                                    
believe it  would be  possible to  continue with  the status                                                                    
quo under  the expansion.  He stressed that  expansion would                                                                    
have  to  be used  as  a  catalyst  for reform  (slide  17);                                                                    
exactly what  the reform looked  like was not yet  known. He                                                                    
addressed the desire to move to  a system that paid more for                                                                    
outcomes  and less  for activities.  The  trust was  working                                                                    
with  the  department on  developing  a  contract to  obtain                                                                    
input  from  others   (particularly  related  to  behavioral                                                                    
health) to  help the state  understand how other  states had                                                                    
used  expansion to  catalyze reform  and what  may work  for                                                                    
Alaska. He believed the reform  was critical. He stated that                                                                    
current Medicaid projections were unsustainable.                                                                                
                                                                                                                                
Mr.  Jessee displayed  slide 17,  "Medicaid  expansion is  a                                                                    
catalyst for  reform." He felt that  only expanding Medicaid                                                                    
would  not simply  yield positive  reform. He  stressed that                                                                    
there must be Medicaid reform,  because it was growing at an                                                                    
unsustainable rate.  He shared that he  was highly motivated                                                                    
to create positive  reform of Medicaid. He  stressed that it                                                                    
was critical  to help develop a  sustainable Medicaid system                                                                    
in  Alaska.  He  believed  that the  Medicaid  system  would                                                                    
collapse at  some point if  it did not become  a sustainable                                                                    
system. He  added that  the collapse  could occur  sooner if                                                                    
the  price of  oil  did  not increase.  He  stressed that  a                                                                    
sustainable system  was in  the best  interest of  the state                                                                    
and  the  trust's  beneficiaries.  He  turned  to  slide  18                                                                    
related  to  recidivism. He  stated  that  one of  the  best                                                                    
opportunities  to reduce  long-term  budget  demands was  by                                                                    
investing   in   proven   strategies  to   reduce   criminal                                                                    
recidivism. He spoke to other  states such as Texas that had                                                                    
been successful  in curbing  recidivism and  avoiding future                                                                    
prison   construction.  He   moved   to   slide  19   titled                                                                    
"Disability Justice...Investing Wisely?"  The slide included                                                                    
a historical chart  projecting that the state  would need to                                                                    
open  a prison  in 2012;  it had  opened a  prison right  on                                                                    
schedule.  He detailed  that the  state was  on the  path to                                                                    
open another prison  in a couple of years.  However, the red                                                                    
line  showed a  way to  match the  prison population  to the                                                                    
available  beds,  but  it  would   require  a  data  driven,                                                                    
evidence-based approach to  implement strategies, constantly                                                                    
monitor the results, and fine  tune the strategies to ensure                                                                    
the  desired results  were achieved.  He stated  that unlike                                                                    
Bring the Kids  Home, if the state failed  at the recidivism                                                                    
effort  there  would  be significant  state  liability.  The                                                                    
trust  believed  that  Medicaid expansion  was  one  of  the                                                                    
state's best opportunities to pay for many of the services.                                                                     
                                                                                                                                
9:48:07 AM                                                                                                                    
                                                                                                                                
Mr. Jessee looked at slide 18, "Recidivism":                                                                                    
                                                                                                                                
   · Maintain efforts of current policy and program efforts                                                                     
        o 2014 SB64 passed and created Alaska Criminal                                                                          
          Justice Commission                                                                                                    
        o 2014 HB266 Legislative intent: workgroup formed                                                                       
          to develop Recidivism Reduction Plan (to be                                                                           
          delivered Feb. 2, 2015)                                                                                               
        o 2007 Criminal Justice Working Group                                                                                   
        o 2005 Trust disability justice focus area                                                                              
                                                                                                                                
Mr.  Jessee  elaborated  that the  Alaska  Criminal  Justice                                                                    
Commission  was  looking  at  things  like  barrier  crimes,                                                                    
levels of sentences,  and other. He referred  to a statement                                                                    
by  Representative Craig  Johnson that  it was  necessary to                                                                    
assess "how  mad we are,  and how  afraid we are  of people"                                                                    
because  those  were  the   reasons  for  incarceration.  He                                                                    
believed the  state needed to  look at  what it could  do to                                                                    
address the issue. He stated  that the state may have become                                                                    
tougher on  crime, but  it may not  have gotten  smarter. He                                                                    
discussed  that   Co-Chair  Neuman  had  been   integral  in                                                                    
developing  HB 266  in 2014,  which encompassed  legislative                                                                    
intent  to   form  a  workgroup  to   develop  a  recidivism                                                                    
reduction plan. He  opined that the bill  represented a leap                                                                    
in conceptual thinking.  He elaborated that in  the past the                                                                    
state  had  looked  at  criminal justice  in  terms  of  the                                                                    
Departments  of  Corrections,  Law,   and  other.  The  bill                                                                    
recognized  that it  was not  necessarily these  departments                                                                    
that  would be  leading the  charge  to keep  people out  of                                                                    
prison. He recognized that DOC  had a significant role while                                                                    
people  are  incarcerated,  in treatment  services,  and  in                                                                    
supervised  release. He  stressed that  most prisoners  were                                                                    
not released  into supervision;  the bill's  intent language                                                                    
recognized three  things to  keep recidivism  down including                                                                    
housing,   employment,   and   support  for   recovery.   He                                                                    
elaborated  that the  intent language  had included  various                                                                    
agencies  including  AHFC,  the   Department  of  Labor  and                                                                    
Workforce Development,  the Department of Health  and Social                                                                    
Services (DHSS), and  AMHTA. The trust was  hopeful that the                                                                    
Recidivism   Reduction  Plan   would  start   to  give   the                                                                    
legislature a road map on how to approach the issue.                                                                            
                                                                                                                                
Mr.  Jessee  discussed  slide   19,  "Disability  Justice  …                                                                    
Investing  Wisely?" The  graph  was from  the University  of                                                                    
Alaska  Anchorage (UAA)  Institute for  Social and  Economic                                                                    
Research (ISER).                                                                                                                
                                                                                                                                
Mr.  Jessee   explained  slide  20,   "Institutional  Inmate                                                                    
Population 2004 to 2022." He  stated that the total offender                                                                    
population  was  project  to  grow at  an  average  of  1.93                                                                    
percent annually  for the following eight  years. Historical                                                                    
numbers   were  the   actual  institutional   daily  average                                                                    
population  excluding  electronic monitoring  and  community                                                                    
residential center population information.                                                                                      
                                                                                                                                
Co-Chair MacKinnon  requested a  copy of the  current actual                                                                    
slide. Mr. Jessee agreed to provide that information.                                                                           
                                                                                                                                
Senator  Dunleavy  wondered  if  the trust  had  a  position                                                                    
regarding the  recent marijuana  initiative, and  whether it                                                                    
would  affect  the prison  rates.  Mr.  Jessee replied  that                                                                    
there were  some slides  related to  marijuana later  in the                                                                    
presentation.  He stressed  that increasing  the consumption                                                                    
of  any intoxicant  was  not likely  to  improve the  mental                                                                    
health or criminality behavior of Alaskans.                                                                                     
                                                                                                                                
Co-Chair  Kelly remarked  that he  wished he  had that  same                                                                    
quote during his  election. Mr. Jessee remarked  that it was                                                                    
wrong to believe  that the prisons were full  of people that                                                                    
were  arrested   for  small  quantities  of   marijuana.  He                                                                    
remarked  that   it  may   benefit  some   beneficiaries  to                                                                    
decriminalize marijuana. He did  not feel that promoting the                                                                    
increased use of marijuana to  be beneficial to the state of                                                                    
Alaska.                                                                                                                         
                                                                                                                                
9:52:12 AM                                                                                                                    
                                                                                                                                
Mr. Jessee addressed slide 21, "Proven results … Texas":                                                                        
                                                                                                                                
     Funding for probation officers to use for outpatient                                                                       
     substance abuse treatment for offenders                                                                                    
                                                                                                                                
     Funding for a mental health pre-trial diversion                                                                            
     program                                                                                                                    
                                                                                                                                
     Expansion of in-custody substance abuse therapeutic                                                                        
     communities                                                                                                                
                                                                                                                                
     A prison dedicated to providing DWI offenders with                                                                         
     intensive substance abuse treatment                                                                                        
                                                                                                                                
     Use   of    intermediate   sanction    facilities   for                                                                    
     probationers who violate probation conditions                                                                              
                                                                                                                                
     Early school intervention programs                                                                                         
                                                                                                                                
     Nurse family partnership program                                                                                           
                                                                                                                                
          -With    these   and    other   measures,    Texas                                                                    
          successfully averted construction of previously                                                                       
          planned prison beds through 2012                                                                                      
                                                                                                                                
          -And Texas prison population completely leveled                                                                       
          off as a result                                                                                                       
                                                                                                                                
Mr. Jessee explained  that that the trust had  been asked to                                                                    
assess  the potential  impact of  expanded broadband  use on                                                                    
the  long-term General  Fund  operating  costs. He  detailed                                                                    
that the  trust had  begun to look  at the  statewide tribal                                                                    
health and  K-12 education systems and  at opportunities for                                                                    
partnerships. He  had met with the  chief operations officer                                                                    
of the  Tribal Health  Consortium and subsequently  with all                                                                    
of  the chief  investment officers  from all  of the  health                                                                    
corporations. He had reported to  the group that the state's                                                                    
broadband study  had indicated another broadband  system was                                                                    
needed.  He stated  that many  of the  telemedicine services                                                                    
were in  the tribal  organizations' "health  wheelhouse." He                                                                    
had   asked  the   organizations  about   opportunities  for                                                                    
partnership to  try to use  some of the  resources together.                                                                    
He  relayed that  the organizations  had been  receptive. He                                                                    
had  learned that  currently  the  technology and  broadband                                                                    
capacity  was  not  as  much   an  impairment  to  expanding                                                                    
telehealth  as program  development. He  stated that  it was                                                                    
not  just the  technology  any longer,  it  was getting  the                                                                    
programs  developed  in  order  to have  billable  hours  to                                                                    
handle  electronic records  properly. He  stressed that  the                                                                    
state   was    lagging   in    programmatic   infrastructure                                                                    
development.                                                                                                                    
                                                                                                                                
9:52:38 AM                                                                                                                    
                                                                                                                                
Mr.  Jessee discussed  that the  education  system also  had                                                                    
access   to  broadband.   He  addressed   opportunities  for                                                                    
partnership. For example, Alaska  Children and Family was an                                                                    
Anchorage agency  that had  reached out  to upper  and lower                                                                    
Kalskag  in  the  Yukon Kuskokwim  region  to  offer  remote                                                                    
telehealth  services  for  children  with  severe  emotional                                                                    
disturbances. He  elaborated that  it used a  combination of                                                                    
occasional   site  visits   in  addition   to  the   use  of                                                                    
telemedicine  to check  in with  the child  and family  on a                                                                    
regular basis. He  noted that there had been  no extra state                                                                    
broadband capacity in the region,  but it had been available                                                                    
in the school. Therefore, the  services had been included in                                                                    
the   child's  independent   education   plan  for   special                                                                    
education, which  had allowed the  Anchorage agency  to have                                                                    
access to  the broadband.  He added  that the  situation had                                                                    
been very successful. He spoke  to better utilizing what was                                                                    
currently  available instead  of reinventing  the wheel.  He                                                                    
explained  that  some  of the  tribal  funding  systems  and                                                                    
education systems had limitations to  what they could do. He                                                                    
discussed that Alaska could not  afford to maintain multiple                                                                    
systems in rural  Alaska and that some  barriers may require                                                                    
congressional action. He stressed  the importance of getting                                                                    
maximum utilization of the existing systems.                                                                                    
                                                                                                                                
Senator  Dunleavy  looked  at slide  21,  and  queried  some                                                                    
successful programs  that have  proven to  reduce recidivism                                                                    
rates. Mr. Jessee  replied that the state  of Washington had                                                                    
a   program  which   conducted   a   meta-analysis  of   the                                                                    
intervention strategies.                                                                                                        
                                                                                                                                
Senator  Dunleavy wondered  if  any of  those programs  were                                                                    
cited in  the research. Mr.  Jessee replied there  were some                                                                    
programs that the state tried  to pilot. He shared that some                                                                    
programs, like  the "Scared  Straight" program  may increase                                                                    
criminality. He  furthered that  some school  programs which                                                                    
used police  officers to present anti-drug  messages did not                                                                    
work.  He  stressed   that  bringing  adolescent  recovering                                                                    
addicts   presenting   in   elementary  schools   was   more                                                                    
effective.                                                                                                                      
                                                                                                                                
Vice-Chair Micciche  requested copies  of some  the research                                                                    
on the effectiveness of substance  abuse programs as related                                                                    
to recidivism. He  wanted to be careful to  continue to fund                                                                    
effective programs.                                                                                                             
                                                                                                                                
Co-Chair Kelly  wondered if that research  would be included                                                                    
in the February 2 report.  Mr. Jessee replied that there was                                                                    
some  information included  in  that report,  and agreed  to                                                                    
provide more detailed research.                                                                                                 
                                                                                                                                
9:58:57 AM                                                                                                                    
                                                                                                                                
Mr. Jessee looked at slide 23, "Recommendations":                                                                               
                                                                                                                                
     1. Maintain current community behavioral health system                                                                     
     capacity                                                                                                                   
                                                                                                                                
     2. Establish an office focused on re-entry within                                                                          
     Department of Corrections                                                                                                  
                                                                                                                                
     3. Attain technical assistance through Pew Charitable                                                                      
     Trust for Results First Initiative                                                                                         
                                                                                                                                
Mr. Jessee  addressed slide 24, "Substance  Abuse Prevention                                                                    
and Treatment":                                                                                                                 
                                                                                                                                
     The prevalence rates and negative consequences of                                                                          
     alcohol and drug abuse upon Alaskans are substantial.                                                                      
                                                                                                                                
     In 2010, Alaska's costs associated with individuals                                                                        
     dependent on or abusing alcohol/drugs was $1.2                                                                             
     billion.                                                                                                                   
                                                                                                                                
Mr. Jessee offered  to provide the committee with  a copy of                                                                    
the McDowell Group report on  substance abuse prevention and                                                                    
treatment. He moved to slide  24 and discussed collaboration                                                                    
on  joint  strategies.  He highlighted  Recover  Alaska,  an                                                                    
initiative by  the Rasmussen  Foundation; the  Mat-Su Health                                                                    
Foundation;   and  the   Denali  Commission.   Additionally,                                                                    
judges, advocates,  providers, and tribal groups  had pulled                                                                    
together to  look at how  the private sector  may contribute                                                                    
to reducing  the impact  of alcohol abuse  in the  state. He                                                                    
discussed the Alaska Wellness  Coalition, which was starting                                                                    
a positive  social norms campaign.  He referred to  a recent                                                                    
commercial about a  man with throat cancer.  He relayed that                                                                    
scientific  research was  pointing to  the effectiveness  of                                                                    
positive  approaches. For  example,  children  wanted to  be                                                                    
normal.  He  pointed  out  the  effectiveness  of  educating                                                                    
children that  most kids do not  drink and most kids  do not                                                                    
smoke.  He spoke  to a  kid's  perception that  "everybody's                                                                    
doing it and if everybody's doing  it then I should be doing                                                                    
it." He believed the positive  approach would be interesting                                                                    
to  see. He  added that  when  the State  of Washington  had                                                                    
evaluated  a variety  of intervention  strategies for  cost-                                                                    
benefit  analysis,  it  had evaluated  the  Scared  Straight                                                                    
program.  The program  took children  who  got into  trouble                                                                    
into  prisons  or other  to  try  to  scare them  away  from                                                                    
committing crimes. He relayed  that the program had actually                                                                    
increased   criminal  behavior.   He   discussed  that   the                                                                    
evidence-based practice was an evolving area.                                                                                   
                                                                                                                                
Mr. Jessee  looked at slide 25,  "Substance Abuse Prevention                                                                    
and Treatment":                                                                                                                 
                                                                                                                                
     Collaboration on joint strategies                                                                                          
                                                                                                                                
          -Recover Alaska                                                                                                       
          -Alaska Wellness Coalition (Positive Social Norms                                                                     
          Campaign)                                                                                                             
          -ABC board (Title 4 statute rewrite)                                                                                  
          -Implementation of Proposition 2 (Marijuana)                                                                          
                                                                                                                                
     Partnership with Department of Corrections on the                                                                          
     recidivism reduction planning with opportunities for                                                                       
     Trust investment in:                                                                                                       
                                                                                                                                
          -Prisoner re-entry coalitions                                                                                         
          -Access to effective treatment                                                                                        
          -Prevention strategies focused on incarcerated                                                                        
          parents and their children                                                                                            
                                                                                                                                
Mr. Jessee looked at slide 26, "Recover Alaska":                                                                                
                                                                                                                                
     Mission: Reduce harms associated with excessive                                                                            
     alcohol consumption in Alaska                                                                                              
                                                                                                                                
          Formed by Funding Partners                                                                                            
                                                                                                                                
               •Rasmussen Foundation                                                                                            
               •Alaska Mental Health Trust Authority                                                                            
               •Mat-Su Health Foundation                                                                                        
               •Department of Health and Social Services                                                                        
               •Southcentral Foundation                                                                                         
               •Other stakeholders                                                                                              
                                                                                                                                
          Guided by a multi-sector action group                                                                                 
                                                                                                                                
               •Judges                                                                                                          
               •Foundations                                                                                                     
               •Health professionals                                                                                            
               •Elected officials including Senator Ellis,                                                                      
               Representative Hughes and                                                                                        
               Representative Herron                                                                                            
                                                                                                                                
10:02:50 AM                                                                                                                   
                                                                                                                                
Mr. Jessee addressed slide 27, "Recover Alaska":                                                                                
                                                                                                                                
     Active collaborations:                                                                                                     
                                                                                                                                
          Connecting Alaskans to help                                                                                           
                                                                                                                                
          Funding media partnerships to increase general                                                                        
          public's understanding of alcohol's broad impacts                                                                     
          across Alaska                                                                                                         
                                                                                                                                
          Title 4 statute review                                                                                                
                                                                                                                                
          Alaska Wellness Coalition: positive social norms                                                                      
          campaign on underage drinking                                                                                         
                                                                                                                                
          Efforts to increase awareness of the Adverse                                                                          
          Childhood Experiences Study                                                                                           
                                                                                                                                
Mr. Jessee discussed slide 28, "Title 4":                                                                                       
                                                                                                                                
     Most of  Title 4 has  not been updated since  1980. The                                                                    
     laws are outdated and confusing.                                                                                           
                                                                                                                                
     A systematic  review of Title  4 helps the  board carry                                                                    
     out  its  mission  and  will  benefit  communities  and                                                                    
     businesses.                                                                                                                
                                                                                                                                
Mr.  Jessee explained  that a  couple of  years earlier  the                                                                    
legislature had  decided that  the Alcohol  Beverage Control                                                                    
Board should be  moved from the Department  of Public Safety                                                                    
to  the  Department  of  Commerce,  Community  and  Economic                                                                    
Development. He noted that the  trust had lost the argument.                                                                    
He  stated that  the effort  had revealed  that the  state's                                                                    
Title 4 statutory  framework had not been  reviewed for some                                                                    
time and had  developed in a very  haphazard manner, usually                                                                    
by  a  special  interest  getting a  legislator  to  sponsor                                                                    
legislation  to get  around  the  population base  licensing                                                                    
limits  by creating  new  license  types (e.g.  recreational                                                                    
site licenses, remote military  contractor license, and that                                                                    
only a  florist could deliver  alcohol to a hotel  room). He                                                                    
relayed that it  was positive that the  trust partnered with                                                                    
the ABC Board  and a group of over 60  people from industry,                                                                    
public health, and public safety  to address how to simplify                                                                    
and decrease  the number of  license types, update  the fees                                                                    
to  support the  ABC budget,  realign the  system to  better                                                                    
enforce population  limits, and  bring all of  the licenses,                                                                    
endorsements, and permits into one place in statute.                                                                            
                                                                                                                                
Mr. Jessee highlighted slide 29, "Licensing Revisions":                                                                         
                                                                                                                                
     Decrease  the number  of license  types and  simplifies                                                                    
     the  licensing   system  to  achieve   more  consistent                                                                    
     enforcement and adherence to state alcohol regulation.                                                                     
                                                                                                                                
     Update license fees to support  the ABC budget; adjusts                                                                    
     wholesale   license   fees  and   simplifies   supplier                                                                    
     reporting.                                                                                                                 
                                                                                                                                
     Realign  the   system  to  better   enforce  population                                                                    
     limits.                                                                                                                    
                                                                                                                                
     Bring all  licenses, endorsements and permits  into one                                                                    
     place in statute, removes redundant or unused types.                                                                       
                                                                                                                                
Mr.  Jessee  addressed slide  30,  "Role  of the  ABC  Board                                                                    
Revisions":                                                                                                                     
                                                                                                                                
     Ensure the  ABC board  fairly represents  the interests                                                                    
     of  all Alaskans  and can  lead  in alcohol  education,                                                                    
     policy and control.                                                                                                        
                                                                                                                                
     Implement    uniform   police    department   reporting                                                                    
     requirements;   develop  enforcement,   education,  and                                                                    
     prevention  plans directly  connected  to the  matching                                                                    
     funds.                                                                                                                     
                                                                                                                                
     Allow  data  about  alcohol purchases  to  be  released                                                                    
     (aggregated  at  the  region or  community  level)  for                                                                    
     analysis and community self-assessment.                                                                                    
                                                                                                                                
     Base  the ABC  budget  on the  activities and  staffing                                                                    
     needed to achieve the ABC's mission.                                                                                       
                                                                                                                                
     Designate ABC board seats  to ensure representation by:                                                                    
     1  public health,  1 public  safety, 2  industry and  1                                                                    
     rural public  member; include Director's  background in                                                                    
     filling the designations.                                                                                                  
                                                                                                                                
Mr. Jessee stated  that the trust agreed  with industry that                                                                    
a limited entry  system was in everyone's  best interest; it                                                                    
protected the  value of  industry's business  and it  was in                                                                    
the  trust's  interest  because it  limited  the  number  of                                                                    
outlets. He stated  that the current system  of dealing with                                                                    
underage   drinking  was   broken.   He  discussed   current                                                                    
consequences  such  as  suspension of  a  driver's  license,                                                                    
mandatory  community  service  and treatment.  He  furthered                                                                    
that the courts  had required a higher level  of due process                                                                    
because of  the consequences;  therefore, the police  had to                                                                    
write  an entire  report. He  continued that  from a  police                                                                    
officer's  perspective it  was discouraging  on a  Friday or                                                                    
Saturday night  to have to  write a report when  they needed                                                                    
to get back  out to patrol; therefore,  sometimes the report                                                                    
was  not  written.  He  spoke  to  inconsistent  enforcement                                                                    
related to  the issue. He  added that because  the citations                                                                    
were issued in  adult court they stayed  on the individual's                                                                    
record   forever,    which   impacted    military   service,                                                                    
scholarships, and other.                                                                                                        
                                                                                                                                
10:07:31 AM                                                                                                                   
                                                                                                                                
Mr.   Jessee  looked   at  slide   31,  "Underage   Drinking                                                                    
Revisions":                                                                                                                     
                                                                                                                                
     Reform underage  drinking sanctions so that  adults who                                                                    
     supply  minors   with  alcohol  are  held   to  greater                                                                    
     accountability.                                                                                                            
                                                                                                                                
     Reduce the  penalty for a  licensee, agent  or employee                                                                    
     selling  alcohol to  a minor  (Sec.  04.16.052) from  a                                                                    
     class A misdemeanor to a minor offense violation.                                                                          
                                                                                                                                
     Require statewide keg registration.                                                                                        
                                                                                                                                
Mr.  Jessee shared  that  the goal  was  to reform  underage                                                                    
drinking  sanctions  to  hold adults  providing  alcohol  to                                                                    
minors  accountable. He  discussed  that the  recommendation                                                                    
would be to  change the punishment to a  straight $500 fine;                                                                    
if the  fine was  not paid,  it would  be garnished  from an                                                                    
individual's  Permanent  Fund   Dividend  (PFD).  The  trust                                                                    
believed   the  change   would  lead   to  more   consistent                                                                    
enforcement.  Additionally, the  trust thought  some parents                                                                    
would be more  concerned about their child  losing a portion                                                                    
of their PFD  than with drinking. The trust did  not want to                                                                    
make the offenders  criminals. He added that  the fine could                                                                    
be  applied to  treatment.  He remarked  that tickets  would                                                                    
help identify individuals receiving multiple tickets.                                                                           
                                                                                                                                
Mr.   Jessee   addressed   slide  32,   "Underage   Drinking                                                                    
Revisions":                                                                                                                     
                                                                                                                                
     Reform underage  drinking sanctions  so that  minors do                                                                    
    not become criminals for making one poor decision.                                                                          
                                                                                                                                
     Clarify required  sign language  warning minors  of the                                                                    
     legal   consequences   of   their   entering   licensed                                                                    
     premises.                                                                                                                  
                                                                                                                                
     Restore the  minor consuming alcohol offense  to a true                                                                    
     violation.                                                                                                                 
                                                                                                                                
Mr. Jessee highlighted slide 33, "Local Option Revisions":                                                                      
                                                                                                                                
     Strengthen local option laws and the ability to                                                                            
     enforce them.                                                                                                              
                                                                                                                                
     Repeal local option 4, which bans sale and importation                                                                     
     of alcohol, but not possession.                                                                                            
                                                                                                                                
     Increase ABC budget for dedicated Title 4 enforcement                                                                      
     staff.                                                                                                                     
                                                                                                                                
     Increase the local option boundary from a 5-mile                                                                           
    radius to a 10-mile radius from the village center.                                                                         
                                                                                                                                
          -Increase   the    misdemeanor-level   fines   for                                                                    
          bootlegging and imposes additional unit fines per                                                                     
          container of alcohol.                                                                                                 
                                                                                                                                
          -Make possession of homebrew ingredients and/or                                                                       
          equipment with intent to produce alcohol illegal                                                                      
          in all local option communities.                                                                                      
                                                                                                                                
Vice-Chair  Micciche   wanted  to  remain  focused   on  the                                                                    
underage drinking revisions, because  there was an effort to                                                                    
match those with the marijuana legislation.                                                                                     
                                                                                                                                
Co-Chair MacKinnon  wondered if there was  consideration for                                                                    
the three  strikes rule,  because of  the fine  reduction to                                                                    
$500.  Mr. Jessee  replied that  the current  draft did  not                                                                    
have a three strikes rule.                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon  felt that  the  individual  may not  be                                                                    
receiving proper treatment, because  they were only paying a                                                                    
repeated fine. She shared that  there was a discussion about                                                                    
increasing the fine to $1000.                                                                                                   
                                                                                                                                
Senator   Bishop  wondered   if   there   were  any   budget                                                                    
calculations   about  the   impact  of   possible  marijuana                                                                    
treatment.  Mr. Jessee  replied that  there were  no numbers                                                                    
about the possible increase  in marijuana related treatment.                                                                    
He shared  that he had studied  Colorado's possible increase                                                                    
in  emergency  room  admissions   and  increased  use  among                                                                    
adolescents.  He stressed  that increased  use of  marijuana                                                                    
was not likely to have a positive outcome.                                                                                      
                                                                                                                                
10:13:39 AM                                                                                                                   
                                                                                                                                
Mr. Jessee continued to discuss slide 34:                                                                                       
                                                                                                                                
     Addiction rate                                                                                                             
                                                                                                                                
          2011, 43  percent of the 590  treatment admissions                                                                    
          for  Alaskans between  the age  of  12-17 was  for                                                                    
          marijuana                                                                                                             
                                                                                                                                
          2012,  17  percent   of  individuals  admitted  to                                                                    
          treatment  reported  marijuana  as  their  primary                                                                    
          substance of abuse (U.S.)                                                                                             
                                                                                                                                
     Increased marijuana use during pregnancy                                                                                   
                                                                                                                                
          6.1 percent of mothers in 2006                                                                                        
                                                                                                                                
          7.8 percent of mothers in 2011                                                                                        
                                                                                                                                
     Psychotic symptoms can occur at 3 to 7 times the rate                                                                      
    among marijuana users versus those who do not use.                                                                          
                                                                                                                                
10:15:43 AM                                                                                                                   
                                                                                                                                
Mr. Jessee  slide 35, "Impact  on Beneficiaries."  He looked                                                                    
at  the far  right  bar which  displayed  the percentage  of                                                                    
students who  think smoking marijuana  once or twice  a week                                                                    
has  slight  or   no  risk.  He  noted  that   the  bar  was                                                                    
substantial  among   the  state's  at-risk   population.  He                                                                    
stressed  that   youth  were  severely  impacted   by  their                                                                    
perception of  risk of  harm. In that  was the  dilemma with                                                                    
the  advertising of  promoting increased  use of  marijuana,                                                                    
because it reduces the perception  of harm, which would lead                                                                    
to an increase in production.                                                                                                   
                                                                                                                                
Mr. Jessee slide 36, "Lessons Learned in Colorado":                                                                             
                                                                                                                                
     Data                                                                                                                       
          -Colorado   wasn't  measuring   marijuana  related                                                                    
          date,  this  lack  of  baseline   has  led  to  an                                                                    
          inability to  understand the impacts  of increased                                                                    
          commercial marijuana                                                                                                  
                                                                                                                                
     Home grows are out of control                                                                                              
          -Nontaxable,  difficult to  enforce, non-regulated                                                                    
          and hard to manage                                                                                                    
                                                                                                                                
     Edibles and concentrates                                                                                                   
          -Dosage,   THC   content,  portion   control   and                                                                    
          packaging  still  continue   to  be  difficult  to                                                                    
          manage                                                                                                                
          -Butane  hash   oil  explosions  and   impacts  to                                                                    
          residential areas                                                                                                     
                                                                                                                                
     Advertising                                                                                                                
          -State is  being sued by local  newspapers as they                                                                    
          believe they  have the right to  advertise without                                                                    
          government restrictions  on their  commercial free                                                                    
          speech                                                                                                                
                                                                                                                                
     Local control                                                                                                              
          -Majority of  communities opted out  of commercial                                                                    
          sales (approx. 212)                                                                                                   
          -Communities  have opted  out  of grow  operations                                                                    
          and   put   more    restrictions   on   businesses                                                                    
          (locations, quantity)                                                                                                 
          -Local  law   enforcement  needing   training  and                                                                    
          funding                                                                                                               
                                                                                                                                
     Black market                                                                                                               
          -Legalized commercial marijuana  has not decreased                                                                    
          the black market                                                                                                      
                                                                                                                                
Mr. Jessee slide 37, "Lessons Learned from Alcohol and                                                                          
Tobacco":                                                                                                                       
                                                                                                                                
     Avoiding harms to others                                                                                                   
          -Indoor air                                                                                                           
          -Driving and injury restrictions                                                                                      
                                                                                                                                
     Sales and marketing restrictions                                                                                           
          -Time, place, manner                                                                                                  
                                                                                                                                
     Price                                                                                                                      
                                                                                                                                
     Use of tax revenue                                                                                                         
         -For prevention in youth and young adults                                                                              
          -Harm reduction and cessation in adult users                                                                          
                                                                                                                                
     Strong public health infrastructure                                                                                        
          -State and local                                                                                                      
          -Collaboration with NGO's                                                                                             
                                                                                                                                
    Strong public health messaging from trusted source                                                                          
                                                                                                                                
     Attention to vulnerable populations                                                                                        
                                                                                                                                
Mr. Jessee slide 38, "Recommendations":                                                                                         
                                                                                                                                
     Inter-disciplinary task force                                                                                              
                                                                                                                                
          -Ensure   the  regulations   are  informed   by  a                                                                    
          comprehensive  field   of  experts   with  various                                                                    
          backgrounds  (public  health,  regulatory  groups,                                                                    
          industry, law enforcement, etc.).                                                                                     
                                                                                                                                
     Data                                                                                                                       
                                                                                                                                
          -Make certain that the right  data and metrics are                                                                    
          being collected and funded                                                                                            
                                                                                                                                
     Regulations                                                                                                                
                                                                                                                                
          -Start with strict regulations  and then with time                                                                    
          and data have the ability to adapt                                                                                    
                                                                                                                                
     Local option                                                                                                               
                                                                                                                                
          -Ensure that  communities understand  their rights                                                                    
         and abilities to exercise local controls                                                                               
                                                                                                                                
     Licensing                                                                                                                  
                                                                                                                                
          -Staging of licenses                                                                                                  
          -Potency limits                                                                                                       
                                                                                                                                
     Edibles and concentrates                                                                                                   
                                                                                                                                
          -Only consider through a preapproval process                                                                          
                                                                                                                                
     Advertising                                                                                                                
                                                                                                                                
          -Enforce   strict   advertising;   unlimited   and                                                                    
          unregulated advertisement  has a direct  impact on                                                                    
          youth use                                                                                                             
                                                                                                                                
     Law enforcement                                                                                                            
                                                                                                                                
          -Need  training   now  on   how  to   enforce  new                                                                    
          regulations                                                                                                           
          -Effectiveness  of  enforcement   happens  at  the                                                                    
          local level                                                                                                           
          -Regulations needed on levels while driving;                                                                          
          using while driving                                                                                                   
                                                                                                                                
10:19:00 AM                                                                                                                   
                                                                                                                                
Senator Dunleavy queried the smoking rates among minors                                                                         
over the last 20 years. Mr. Jessee agreed to provide that                                                                       
information.                                                                                                                    
                                                                                                                                
Mr. Jessee slide 39, "Fetal Alcohol Spectrum Disorders"                                                                         
(FASD):                                                                                                                         
                                                                                                                                
     • Alaska  has the  highest documented  rate of  FASD in                                                                    
     the nation                                                                                                                 
                                                                                                                                
     • More than 129 children  are born with FASD every year                                                                    
     in Alaska                                                                                                                  
                                                                                                                                
     •Each  child born  with FASD  costs  the State  between                                                                    
     $860,000 - $4.2 million (birth to age 18)                                                                                  
                                                                                                                                
     •129 kids x $4.2 million = $541.8 million                                                                                  
                                                                                                                                
     •FASD is 100 percent preventable                                                                                           
                                                                                                                                
Mr. Jessee slide 40, "FASD":                                                                                                    
                                                                                                                                
     $500.0  appropriation  for  media campaign  to  educate                                                                    
     Alaskans                                                                                                                   
                                                                                                                                
          -Prevention    message   vs    intervention   (not                                                                    
          targeting women who battle addiction)                                                                                 
                                                                                                                                
Mr. Jessee slide 41, "FASD":                                                                                                    
                                                                                                                                
     There is  a high  level of  knowledge that  alcohol use                                                                    
     during pregnancy is harmful to an unborn baby.                                                                             
                                                                                                                                
     But,  many women  receive misinformation  about alcohol                                                                    
     and  pregnancy, including  the consequences  of alcohol                                                                    
     use,  safe times  to drink  during  pregnancy and  safe                                                                    
     amounts or types of alcohol.                                                                                               
                                                                                                                                
Mr. Jessee slide 42, "FASD Campaign Messaging":                                                                                 
                                                                                                                                
     Campaign will  inform and  encourage Alaska  women aged                                                                    
     20 to  35 to ensure  they are not pregnant  before they                                                                    
     drink alcohol  or to abstain  from alcohol if  they are                                                                    
     not sure of their pregnancy  status in order to prevent                                                                    
     occurrences of FASD.                                                                                                       
                                                                                                                                
Mr. Jessee slide 43, "FASD Media Campaign":                                                                                     
                                                                                                                                
     Increase understanding among Alaska women that:                                                                            
                                                                                                                                
     Alcohol use  during pregnancy  can cause  birth defects                                                                    
     and brain damage                                                                                                           
                                                                                                                                
     It is best to stop drinking before conception                                                                              
                                                                                                                                
     It is safest not to drink any alcohol during pregnancy                                                                     
                                                                                                                                
     There is no  known safe time or amount  to drink during                                                                    
     pregnancy                                                                                                                  
                                                                                                                                
Mr. Jessee slide 44, "FASD Media Campaign":                                                                                     
                                                                                                                                
     Tactics to include:                                                                                                        
     -Video                                                                                                                     
     -TV                                                                                                                        
     -Radio                                                                                                                     
     -Online                                                                                                                    
     -Social media                                                                                                              
     -Out-of-home                                                                                                               
     Campaign will launch in March                                                                                              
                                                                                                                                
Mr. Jessee slide 45, "FASD Prevention":                                                                                         
                                                                                                                                
     Investing in  FASD prevention now  will save  the state                                                                    
     money  and  most  importantly   reduce  the  number  of                                                                    
     families  dealing  with  the heartbreaking  effects  of                                                                    
     FASD.                                                                                                                      
                                                                                                                                
     Thank  you  for your  support  in  eradicating FASD  in                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
10:23:16 AM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly  shared  that  there  was  a  recent  budget                                                                    
infusion to  address the  problem of FASD  in the  state. He                                                                    
had hired  a staff member  to head the effort  in addressing                                                                    
FASD. He had  produced a video that was  intended to illicit                                                                    
a response from  a large group of people. He  stated that it                                                                    
was a  long video,  so it  probably would not  be used  as a                                                                    
commercial. He stated that the  Empowering Hope Group, which                                                                    
Co-Chair  MacKinnon was  a member,  wanted  to identify  who                                                                    
would  lead  the  efforts  in  each  community.  The  budget                                                                    
appropriation was used to hire  the First Alaskans Institute                                                                    
to  identify those  grassroots leaders.  He shared  that 160                                                                    
people were  named, and  attended a  meeting. He  noted that                                                                    
some  of the  people did  not understand  why they  would be                                                                    
selected as leaders.                                                                                                            
                                                                                                                                
Co-Chair Kelly  presented a  video about  FASD. It  showed a                                                                    
woman who  was pregnant, but  she was drinking early  in her                                                                    
pregnancy. That  drinking resulted in  FASD in her  son. The                                                                    
message of the video was  that drinking during pregnancy has                                                                    
a harmful impact on the fetus.                                                                                                  
                                                                                                                                
10:31:57 AM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly  remarked that  the  video  was intended  to                                                                    
solicit  funds from  private industry.  He  shared that  the                                                                    
video  would  be remastered  to  be  used on  social  media,                                                                    
radio, and television.                                                                                                          
                                                                                                                                
Vice-Chair  Micciche  remarked  that the  program  was  very                                                                    
effective and  honorable. He  shared that  he had  kept each                                                                    
pregnancy  test  from his  wife's  urine  with each  of  his                                                                    
child's names attached  to the test. He felt  that the press                                                                    
had misrepresented the program during the prior year.                                                                           
                                                                                                                                
Senator   Dunleavy  wondered   if  there   was  a   list  of                                                                    
ineffective program recommendations  for removal. Mr. Jessee                                                                    
agreed to provide that information.                                                                                             
                                                                                                                                
Co-Chair  MacKinnon   wondered  if  there   was  information                                                                    
regarding Daylight Savings Time.  Mr. Jessee replied that he                                                                    
did not have  that information, but agreed  to research that                                                                    
request.                                                                                                                        
                                                                                                                                
10:37:23 AM                                                                                                                   
                                                                                                                                
Co-Chair Kelly  asked for some  explanation of  the research                                                                    
and contacts to eradicate FASD.                                                                                                 
                                                                                                                                
RYAN  RAY, STAFF,  SENATOR PETE  KELLY, shared  that he  had                                                                    
been personally  upset when studying  the issue of  FASD. He                                                                    
thanked the  committee for  their commitment  to eradicating                                                                    
FASD.  He shared  that the  UAA  study was  a full  academic                                                                    
study  on the  effectiveness of  a pregnancy  test dispenser                                                                    
located  in bar  bathrooms  on raising  public awareness  of                                                                    
FASD,  and  the  impact  of drinking  during  pregnancy.  He                                                                    
stressed   that  the   pregnancy  dispensers   were  not   a                                                                    
prevention  mechanism.  He  remarked   that  the  study  was                                                                    
complex, because  of the many variables  to identify whether                                                                    
the dispenser  would cause  public awareness.  The intention                                                                    
was to  create a discussion,  and provide an  opportunity to                                                                    
use a  pregnancy test. He  shared that the study  had caused                                                                    
some international  interest, because  Alaska was  the first                                                                    
place  in  the world  that  had  initiated the  program.  He                                                                    
shared that  the study would  compare the Mat-Su  valley and                                                                    
the Kenai Peninsula.                                                                                                            
                                                                                                                                
Co-Chair Kelly  queried the effectiveness of  a program that                                                                    
was once  titled, "Community Helper."  Mr. Ray  replied that                                                                    
initially  the process  was  intended  for a  cost-effective                                                                    
solution. He  shared that it  was important to  identify the                                                                    
local, "living  room leaders" that  would effect  change. He                                                                    
shared  that the  collection of  individuals  knew what  was                                                                    
occurring,  and how  to fix  the communities.  The intention                                                                    
was the  development of listening  to the  community members                                                                    
regarding what needs to change in their communities.                                                                            
                                                                                                                                
10:43:48 AM                                                                                                                   
                                                                                                                                
Co-Chair Kelly  remarked that a  goal Empowering  Hope Group                                                                    
was to  partner with private  industry to fund  the response                                                                    
to preventing  FASD. He  shared that  there were  many state                                                                    
leaders in  the Empowering  Hope Group.  He shared  that the                                                                    
program  was a  long-term  response, in  order to  eradicate                                                                    
FASD. There were  programs through the state,  but he wanted                                                                    
to   focus   on  prevention.   He   felt   that  there   was                                                                    
underreporting  of people  that  were affected  by FASD.  He                                                                    
would like  a screening method  that would identify  who was                                                                    
affected by  FASD. He  opined that there  may be  a national                                                                    
effort in partnership with  some pharmaceutical companies on                                                                    
the   screening   development.    He   stressed   that   the                                                                    
incorporation of  identification was because the  measure of                                                                    
success  could   not  be  determined  until   the  diagnoses                                                                    
occurred.                                                                                                                       
                                                                                                                                
Vice-Chair   Micciche  wondered   if   a   501C3  had   been                                                                    
established. He  wondered if there  was a way for  a citizen                                                                    
to contact the  effort. Co-Chair Kelly replied  that Mr. Ray                                                                    
was a contact  for the program. He furthered  that the group                                                                    
anticipated an attachment to a separate program.                                                                                
                                                                                                                                
Mr. Ray  stressed that the  goal was to keep  the Empowering                                                                    
Hope Group  costs as low  as possible. He stated  that there                                                                    
were  partnerships  to  conduct   the  media  campaigns  and                                                                    
research in  order to  streamline the  funding and  keep the                                                                    
group at a volunteer level.                                                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:49:46 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:49 a.m.                                                                                         
                                                                                                                                

Document Name Date/Time Subjects
012915 SFC Mental Health Trust Presentation.pdf SFIN 1/29/2015 9:00:00 AM
Budget Overview