Legislature(2015 - 2016)SENATE FINANCE 532

02/10/2015 09:00 AM Senate FINANCE

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Audio Topic
09:02:48 AM Start
09:03:07 AM SB28
10:42:36 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 28 Presentation: Overview FY17 Operating Budget TELECONFERENCED
Departments: Environmental Conservation and
Jeff Jessee, Alaska Mental Health Trust Authority
Bills Previously Heard/Scheduled
                 SENATE FINANCE COMMITTEE                                                                                       
                     February 10, 2015                                                                                          
                         9:02 a.m.                                                                                              
9:02:48 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Kelly called the Senate Finance Committee meeting                                                                      
to order at 9:02 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Peter Micciche, Vice-Chair                                                                                              
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
MEMBERS ABSENT                                                                                                                
Senator Anna MacKinnon, Co-Chair                                                                                                
ALSO PRESENT                                                                                                                  
Jeff Jessee, Chief Executive Officer, Alaska Mental Health                                                                      
Trust Authority; Pat Pitney, Director, Office of Management                                                                     
and Budget, Office of the Governor.                                                                                             
SB 28     APPROP: MENTAL HEALTH BUDGET                                                                                          
          SB 28 was HEARD and HELD in committee for further                                                                     
SENATE BILL NO. 28                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
9:03:07 AM                                                                                                                    
Co-Chair Kelly  wanted to  get a  deeper examination  of the                                                                    
budget,  but wanted  a greater  understanding of  the mental                                                                    
health  budget.  He wanted  a  new  approach to  the  mental                                                                    
health budget. He  queried the history of  the Alaska Mental                                                                    
Health Trust Authority (AHMTA).                                                                                                 
JEFF JESSEE,  CHIEF EXECUTIVE OFFICER, ALASKA  MENTAL HEALTH                                                                    
TRUST  AUTHORITY, discussed  the  history of  the AHMTA.  In                                                                    
territorial days, individuals with  a mental disability were                                                                    
sent to Morningside Hospital in  Oregon, and, in many cases,                                                                    
served  a life  sentence.  At the  point  of statehood,  the                                                                    
issue of a  mental health was part of  the conversation. The                                                                    
federal   government   paid   for   Morningside,   but   the                                                                    
formulation of the state would  require the state to pay for                                                                    
the rehabilitation.  The issue halted statehood,  during the                                                                    
debate  over  the  mental  health  issues.  There  was  cash                                                                    
appropriated  to the  first wing  of the  Alaska Psychiatric                                                                    
Institute (API) and  to purchase a motel in  Valdez to place                                                                    
individuals with  mental health  issues. He stated  that the                                                                    
mental  health management  in the  state evolved  over time.                                                                    
For example,  senior issues were assigned  to the Department                                                                    
of  Administration (DOA).  He shared  that, at  the time  of                                                                    
statehood, a holistic approach to  mental health program was                                                                    
discussed. He  remarked that mental  health issues  were not                                                                    
solely  the  purview  of Department  of  Health  and  Social                                                                    
Services  (DHSS),   but  also  held  within   Department  of                                                                    
Corrections  (DOC). He  stated  that there  were many  other                                                                    
departments   in   state   government   that   "touch"   the                                                                    
beneficiaries, and should be examined  as part of a holistic                                                                    
picture of the state's  mental health program, including the                                                                    
capital budget.                                                                                                                 
Mr. Jessee  presented the PowerPoint, "Mental  Health Budget                                                                    
Bill Overview,"  (copy on  file), and  referred to  slide 1,                                                                    
"The Budget Process - Why separate Appropriation Bill":                                                                         
     Settlement mandated an integrated, comprehensive                                                                           
     mental health program                                                                                                      
     Separate bill enables a holistic approach of all                                                                           
     mental health programs rather than in silos/per                                                                            
Mr.  Jessee highlighted  slide 2,  "The Budget  Process -  A                                                                    
Separate Appropriation Bill":                                                                                                   
     Trustees recommend to governor annual operating and                                                                        
     capital budgets by September 15 (required by statute)                                                                      
     Recommendations include not only MHTAAR but what                                                                           
     trustees think the state should spend (GF/MH) in order                                                                     
     to have an adequate MH program                                                                                             
     If governor or Legislature does not follow trustee                                                                         
     recommendations they have to explain why                                                                                   
9:10:21 AM                                                                                                                    
Senator Dunleavy  asked if the  governor or  legislature had                                                                    
ever not  followed the recommendations of  the trustees. Mr.                                                                    
Jessee  replied  that almost  every  year,  the governor  or                                                                    
legislature did not follow the trustee recommendations.                                                                         
Senator  Dunleavy  asked  him  to  elaborate.    Mr.  Jessee                                                                    
responded that the trustees  recommended increments, and the                                                                    
legislature  does   not  fund  them  or   according  to  the                                                                    
recommendations.  Every year  the  AMHTA  receives a  letter                                                                    
from  both  the  governor  and  legislature,  outlining  the                                                                    
contrasting decisions.                                                                                                          
Mr. Jessee moved  to slide 3, "Types of Funds  in the Mental                                                                    
Health Budget Bill":                                                                                                            
     GF/MH - general fund/mental health                                                                                         
     MHTAAR - Mental Health Trust Authority Authorized                                                                          
     MHT Admin - funds to operate the Trust                                                                                     
     Alaska Housing Finance Corporation dividends                                                                               
     Alcohol tax receipts                                                                                                       
Mr.  Jessee   moved  to  slide  4,   "Examples  of  Holistic                                                                    
     Therapeutic Courts                                                                                                         
     Bridge Home                                                                                                                
9:13:00 AM                                                                                                                    
Mr. Jessee moved to slide 5, "Therapeutic Courts":                                                                              
     Prevent inappropriate use of Correctional Centers and                                                                      
    reduce criminal recidivism for targeted populations                                                                         
          -Anchorage Mental Health Court (est. 1998)                                                                            
               •Total  of  Trust  funds  ~$1,000.0  (1st  in                                                                    
               Alaska, 3rd  in the  nation) over 5  years to                                                                    
              develop, implement and evaluate                                                                                   
               •Combined savings of  nearly 2½ times program                                                                    
               annual operating cost ($293,000)                                                                                 
               •2005   transitioned   to  GF/MH   and   used                                                                    
               available Trust funds to expand to Palmer                                                                        
          -Palmer Mental Health Court (est. 2005)                                                                               
               •Total  of Trust  funds  ~$600.0 to  develop,                                                                    
               implement and evaluate                                                                                           
               •Participants were  less likely to  engage in                                                                    
               new  criminal   conduct  after   exiting  the                                                                    
               program  (17  percent)   than  an  equivalent                                                                    
               group (40 percent)                                                                                               
               •2007   transitioned   to  GF/MH   and   used                                                                    
               available  Trust  funds  to expand  to  other                                                                    
          -Current Trust funded mental health courts                                                                            
               •Fairbanks   Juvenile  Mental   Health  Court                                                                    
              (est. 2008); FY14 $245.6 MHTAAR                                                                                   
               •Juneau  Mental  Health  Court  (est.  2008);                                                                    
               FY14 $204.4 MHTAAR                                                                                               
9:22:26 AM                                                                                                                    
Mr. Jessee moved to slide 6, "Bridge Home":                                                                                     
     Targeting people exiting Alaska Psychiatric Institute                                                                      
     or Dept. of Corrections through intensive community                                                                        
     outreach project                                                                                                           
         •Bridge Home Program: FY14 $750.0 MHTAAR                                                                               
          •Total investment since FY06: $6,250,000 MHTAAR                                                                       
          •Medicaid supportive services utilized in the                                                                         
Senator  Dunleavy  asked what  the  asterisks  on the  slide                                                                    
meant.  Mr. Jessee replied that he did not know.                                                                                
Senator Dunleavy  asked if all trust  beneficiaries actively                                                                    
participate in one or more  of AMHTA outreach services.  Mr.                                                                    
Jessee postulated  that he  thought the  answer was  no, and                                                                    
went on  to clarify that  there were beneficiaries  that had                                                                    
family  support,  so they  may  not  need outside  services;                                                                    
there were those that chose  not to participate in services;                                                                    
and so on. The trust did not operate outreach services.                                                                         
Mr.  Jessee moved  to slide  7,  "FY15 -  FY16 Budget."  The                                                                    
slide depicted  a $15,000  level view  of the  mental health                                                                    
budget.  He  stressed  that  the  numbers  were  a  work  in                                                                    
progress, because  the governor had not  submitted the final                                                                    
numbers.  He  stressed  that there  was  approximately  $200                                                                    
million  in GF.  The  other funds  were  mostly alcohol  tax                                                                    
money. He remarked that the  capital budget numbers showed a                                                                    
remarkable difference between FY 15 and FY 16.                                                                                  
Mr.  Jessee presented  slide 8,  "FY15 Budget  (operating)."                                                                    
The slide divided that budget  by departments. He noted that                                                                    
DHSS was  most of the  mental health budget. He  stated that                                                                    
the budget also  included the DOA, DOC,  Department of Labor                                                                    
and  Workforce  Development   (DOLWF),  Department  of  Law,                                                                    
Department  of  Education   and  Early  Development  (DEED),                                                                    
Department  of   Natural  Resources  (DNR),   Department  of                                                                    
Revenue (DOR), the University of  Alaska (UA), and the Court                                                                    
Mr.   Jessee  presented   slide   9,   "FY15  Budget   (DHSS                                                                    
Operating)," and  explained that the mental  health bill was                                                                    
far reaching  in just DHSS.  He shared that within  DHSS the                                                                    
budget  affected   Behavioral  Health;   Medicaid  Services;                                                                    
Senior  and Disability  Services; Pioneer  Homes; Children's                                                                    
Services;  Juvenile Justice;  and Public  Assistance, Health                                                                    
Care Services, Public Health, and Departmental Support.                                                                         
9:26:41 AM                                                                                                                    
Co-Chair Kelly  queried the successes  in the  programs. Mr.                                                                    
Jessee stated that Housing First,  as a concept, occurred in                                                                    
the  Lower  48  when   jurisdictions  discovered  that  many                                                                    
homeless   people  had   severe   addiction  problems,   and                                                                    
homelessness was  extremely expensive. Up until  that point,                                                                    
the government required homeless  people to get sober before                                                                    
they  were granted  housing. After  some time,  homelessness                                                                    
was   deemed  extremely   expensive.  Therefore,   providing                                                                    
housing  to those  individuals resulted  in a  positive, and                                                                    
less expensive outcome. The  housed individuals saw improved                                                                    
health  care;  the utilization  of  health  care costs  were                                                                    
reduced; they were not contacted  by police; and the alcohol                                                                    
abuse was reduced. He remarked that  it was a myth to assume                                                                    
that  homeless people  enjoy  being  homeless, because  they                                                                    
consider it  like camping. He  furthered that it was  also a                                                                    
myth to  assume that  homeless people "enjoy"  drinking. The                                                                    
Housing First project  in Seattle proved that  the people in                                                                    
the project  went through treatment  an average of  15 times                                                                    
before  they  were  sober. He  felt  that  participation  in                                                                    
treatment  proved the  desire to  stop  abusing alcohol.  He                                                                    
stated  that  a  Housing  First  project  in  Anchorage  was                                                                    
established, and  had positive outcomes. He  stated that the                                                                    
individuals and neighborhood had  showed a positive outcome.                                                                    
He  announced  that UA  was  going  to conduct  an  in-depth                                                                    
evaluation  of the  program. He  furthered  that the  Tanana                                                                    
Chiefs  Conference  was   interested  in  a  tribal-operated                                                                    
Housing  First project  in Fairbanks.  He stressed  that the                                                                    
issues must be examined holistically.                                                                                           
9:35:10 AM                                                                                                                    
Mr. Jessee  stated that family  support for  senior programs                                                                    
was also  an issue  in the mental  health budget.  He stated                                                                    
that supporting  the families before  the senior was  a ward                                                                    
of the state, was a preventive and cost-saving measure.                                                                         
Senator  Hoffman queried  the estimated  homeless population                                                                    
in Alaska. Mr. Jessee replied  that in Anchorage alone there                                                                    
are 200-250 chronically homeless individuals.                                                                                   
Senator Hoffman  queried the number of  homeless individuals                                                                    
in  Fairbanks.  Mr. Jessee  estimated  that  the number  was                                                                    
roughly  similar to  that of  Anchorage.  He furthered  that                                                                    
Juneau also had a similar number to Anchorage.                                                                                  
Senator  Hoffman  asked if  there  were  homeless people  in                                                                    
rural Alaska.   Mr. Jessee replied that  there were homeless                                                                    
people  and "housing  burdened" people  in rural  Alaska. He                                                                    
explained  that "housing  burdened"  meant  that there  were                                                                    
many family members living in a very small space.                                                                               
Senator Hoffman queried  the impact of Housing  First on the                                                                    
larger  population  in   receiving  employment.  Mr.  Jessee                                                                    
looked  at the  Anchorage Housing  First project.  He shared                                                                    
that a number of the  residents also worked for Rural Alaska                                                                    
Community  Action Program  (Rural CAP),  and some  were then                                                                    
able to get  a job outside of the program.  He stressed that                                                                    
the population  in that project  was often  health impaired,                                                                    
in addition to substance  abuse. Therefore, employment was a                                                                    
problem, because  of the prevalence  of chronic  disease and                                                                    
other health problems.                                                                                                          
Co-Chair Kelly  queried the  management of  the unsuccessful                                                                    
programs.  Mr.   Jessee  noted  a  program   called  Healthy                                                                    
Families, which identified high-risk  families at the moment                                                                    
a  child was  born and  provided outreach.  It was  the hope                                                                    
that there would be better  outcomes in the family, in terms                                                                    
of child protection  and other problems. He  shared that the                                                                    
trust  spent approximately  $250,000 to  have Johns  Hopkins                                                                    
explore  the  actually  outcomes  of the  programs.  It  was                                                                    
determined that the program did  not have positive outcomes.                                                                    
There  were issues  with  the fidelity  with  the model  and                                                                    
program implementation.                                                                                                         
Co-Chair Kelly  remarked that the  program was enacted  at a                                                                    
time  where  there  was similar  fiscal  challenges  as  the                                                                    
current  budget  year.  He appreciated  the  high  level  of                                                                    
program scrutiny from the AMHTA.                                                                                                
9:41:08 AM                                                                                                                    
Senator Dunleavy  wondered if  the Healthy  Families program                                                                    
was a  problem, or  if the  implementation was  the problem.                                                                    
Mr. Jessee  replied that the  program was  an evidence-based                                                                    
successful  concept.  The program  in  Alaska  did not  have                                                                    
fidelity with the successful model.                                                                                             
Senator Dunleavy asked if the  management of the program was                                                                    
the problem. Mr. Jessee replied in the affirmative.                                                                             
Senator  Dunleavy  wondered  if  there  was  a  "failure  to                                                                    
perform clause" in the management  and administration of the                                                                    
program.  Mr.  Jessee   noted  he  was  not   aware  of  any                                                                    
performance-based   employment   contracts   for   executive                                                                    
directors, but felt that it may  not be a bad idea. He noted                                                                    
that the business model of  behavior health was complicated,                                                                    
because  of   reimbursement  rates  and  other   issues.  He                                                                    
stressed that supporting the  administrators with the proper                                                                    
assistance was important in providing adequate support.                                                                         
Co-Chair  Kelly asked  to move  on,  and noted  that it  was                                                                    
important  to examine  successful outcomes.  He referred  to                                                                    
slide  10, "FY16  GF/MH  Recommendations."  He wondered  why                                                                    
MHTAAR  money was  not  used for  the  programs. Mr.  Jessee                                                                    
responded that  the trust had approximately  $25 million per                                                                    
year for  spending. He  felt that  money would  only support                                                                    
the  base programs,  and the  result would  have a  negative                                                                    
impact on  the legislature's willingness to  provide funding                                                                    
for the effective programs.                                                                                                     
9:46:33 AM                                                                                                                    
Co-Chair  Kelly  asked  how  frequently  the  AMHTA  closely                                                                    
examined  its  programs,  and adjusted  its  enthusiasm  for                                                                    
unsuccessful  programs. Mr.  Jessee replied  that the  trust                                                                    
measured  the program  effectiveness  on a  daily basis.  He                                                                    
stated that every  grant had a set  of trackable performance                                                                    
measures. He  stated that there  was not a similar  level of                                                                    
scrutiny for  the every single grantee  program, however the                                                                    
outcomes were examined. He shared  that sending children out                                                                    
of the  state was  not resulting in  a positive  outcome. He                                                                    
remarked that the trust was  able to sustain programs across                                                                    
changes  in  administration.  He  stated  that  the  program                                                                    
recommendations were  the result  of a  rigorous data-driven                                                                    
9:51:46 AM                                                                                                                    
Co-Chair  Kelly asked  if  the trust  has  had a  discussion                                                                    
about  the current  fiscal environment  and its  position in                                                                    
deficit situation.  Mr. Jessee  replied in  the affirmative.                                                                    
He   shared   that  the   budget   had   the  lowest   GF/MH                                                                    
recommendations in his memory.                                                                                                  
Mr. Jessee moved to slide 15, "Current Priorities":                                                                             
     Restore Homeless Assistance Program Funding                                                                                
     Medicaid Expansion and Reform                                                                                              
     Substance Abuse Prevention and Treatment                                                                                   
9:54:02 AM                                                                                                                    
Co-Chair  Kelly  queried  the   trust's  investment  in  the                                                                    
priorities. Mr.  Jessee replied that the  trust put $850,000                                                                    
into   the  Homeless   Assistance   Program;  the   trustees                                                                    
authorized  almost $2  million  to  Medicaid Expansion;  the                                                                    
trust paid  for hiring  Carmen Gutierrez for  the Recidivism                                                                    
plan;  and a  couple  million dollars  would  be put  toward                                                                    
substance  abuse prevention  and  treatment  in the  current                                                                    
Co-Chair Kelly  remarked that  the administration  wanted to                                                                    
expand Medicaid before Medicaid  reform, and the legislature                                                                    
wanted, at  least, reform  first. He  wondered if  the trust                                                                    
had  conducted  any  research on  Medicaid  reform  and  its                                                                    
recommendations.  Mr.   Jessee  responded  that   they  have                                                                    
already been  collaborating with the DHSS.  He used patient-                                                                    
centered medical  homes as an  example of  collaboration. He                                                                    
stated  that  Alaskans  were  heavy  utilizers  of  behavior                                                                    
health services  and basic health  services. He  stated that                                                                    
intensive case management had proved  to be a cost saver. He                                                                    
stated  that the  trust had  committed $300,000  to DHSS  to                                                                    
hire  some  technical  assistance,  to  research  the  other                                                                    
states' effective reform and expansion strategies.                                                                              
Co-Chair Kelly  noted that the  committee needs to  know the                                                                    
Trust's  recommendation,  and  they need  hard  evidence  to                                                                    
support  Medicaid expansion.   Mr.  Jessee urged  caution in                                                                    
considering  the Medicaid  program as  a stand-alone  budget                                                                    
element.  He  noted   the  correlation  between  individuals                                                                    
coming out of corrections and high Medicaid costs.                                                                              
Co-Chair Kelly  reiterated the need  for evidence.  He noted                                                                    
that the  most common  scenario was  that spending  does not                                                                    
create   savings.  Mr.   Jessee  replied   that  the   Trust                                                                    
understood that Medicaid expansion was a high stakes issue.                                                                     
10:00:49 AM                                                                                                                   
Senator Dunleavy wondered if the  budget had any earmarks to                                                                    
underwrite  Medicaid expansion.   Mr.  Jessee noted  that it                                                                    
was not  in this budget,  but it  would be reflected  in the                                                                    
budget detail of the Governor's budget.                                                                                         
Senator Dunleavy asked how the  recommendations on slide 10,                                                                    
were  formed. Mr.  replied  noted  that the  recommendations                                                                    
were  formed  based  on  what the  trust  thought  was  most                                                                    
critical for an ongoing sustainable budget.                                                                                     
Senator  Dunleavy  asked  about the  Licensed  Marriage  and                                                                    
Family  Therapist item.  Mr. Jessee  replied that  it was  a                                                                    
small  increment that  would help  establish the  credential                                                                    
process to  provide an ability  to access  federal resources                                                                    
for the services.                                                                                                               
Senator Dunleavy hoped to be  convinced of the effectiveness                                                                    
of Medicaid expansion.                                                                                                          
Co-Chair Kelly  wondered how behavioral health  programs had                                                                    
thrived without adequate case  management within the current                                                                    
Medicaid  system. Mr.  Jessee replied  that  a case  manager                                                                    
would  be  helpful  in   ensuring  that  beneficiaries  were                                                                    
treated. He stressed that the  case manager must be paid. He                                                                    
felt that paying case managers  was a wise financial choice.                                                                    
He   announced  that   the  division   had  established   an                                                                    
"Assertive  Community Treatment"  which  was  a mobile  case                                                                    
management system.                                                                                                              
10:07:21 AM                                                                                                                   
Co-Chair  Kelly noted  that in  his  personal experience  he                                                                    
observed a  staggering cost to  the state resulting  from an                                                                    
individual who did  not show up to appointments  or take the                                                                    
full  regimen  of antibiotics.  He  noted  that lack  of  an                                                                    
effective case  management practice. Mr. Jessee  agreed that                                                                    
there were problems.                                                                                                            
Co-Chair Kelly  asked Mr. Jessee  to postulate  an effective                                                                    
case management. Mr. Jessee guessed $5 to $10 million.                                                                          
Co-Chair Kelly  wondered if  the Trust  had designed  a case                                                                    
management system. Mr. Jessee replied in the negative.                                                                          
Co-Chair  Kelly asked  if  the Trust  would  support a  case                                                                    
management   system.  Mr.   Jessee  noted   the  trust   was                                                                    
supporting the division, in community treatment.                                                                                
Co-Chair  Kelly  asked  if  the  current  behavioral  grants                                                                    
contained  funds for  case  management.  Mr. Jessee  replied                                                                    
that  case management  would be  unnecessary,  if there  was                                                                    
continued cutting of programs.                                                                                                  
Co-Chair Kelly noted that he  would like to have a different                                                                    
relationship with  the AMHTA and  wanted to speak  about the                                                                    
mental  health   budget.  Mr.  Jessee  stated   he  embraces                                                                    
accountability  and the  trust  is committed  to reform  and                                                                    
using Medicaid expansion as a catalyst.                                                                                         
10:13:03 AM                                                                                                                   
Vice-Chair  Micciche  referred   to  individuals  who  abuse                                                                    
services,  and  asked  what systems  currently  function  to                                                                    
ensure   the   services   were  provided   for   the   right                                                                    
individuals.  Mr. Jessee  noted  that any  system will  have                                                                    
under-performing  and well  performing  aspects.   He  noted                                                                    
that no matter the system,  there will always be individuals                                                                    
which will  take advantage, and  the trust is well  aware of                                                                    
the  fiscal issues  with  those who  take  advantage of  the                                                                    
Co-Chair  Kelly  asked Mr.  Jessee  to  address Area  Health                                                                    
Education Centers (slide 10).  Mr. Jessee explained that the                                                                    
centers  provided  care  management,  so  individuals  could                                                                    
navigate  their  health care  system  to  better access  the                                                                    
specific services.                                                                                                              
Co-Chair  Kelly  asked  about  the  difference  between  the                                                                    
current Medicaid  waiver and personal care  attendants (PCA)                                                                    
care  in the  Senior  In-home Services  request. Mr.  Jessee                                                                    
explained  that that  PCA services  had paid  individuals to                                                                    
provide  care  to a  specific  person.  The Caregiver  Grant                                                                    
Program was  designed to support the  caregivers. The Senior                                                                    
In-home Services provided other  types of services for those                                                                    
trying to care  for loved ones may need to  access, and were                                                                    
not necessarily Medicaid or Medicare billable services.                                                                         
Mr. Jessee referred to back to  slide 7, and referred to the                                                                    
underlined capital  portions of  the mental health  bill. He                                                                    
noted the  substantial difference between the  FY 15 Enacted                                                                    
Capital, and  the WIP in  the governor's initial  budget. He                                                                    
explained the Homeless Assistance  Program (HAP) funding. He                                                                    
referred to  the handout "Impact  of the Loss of  AHFC Basic                                                                    
Homeless Assistance Program (BHAP) Funding."                                                                                    
Mr. Jessee referred  to slide 13, explaining  that there are                                                                    
two agencies that receive  homeless assistance funding: BHAP                                                                    
and   SNHG.  He   stressed  that   SNHG  was   essential  in                                                                    
establishing the Housing First program.                                                                                         
10:20:34 AM                                                                                                                   
Senator Bishop  wondered what  would occur  if the  SNHG was                                                                    
zeroed out.  He surmised that  the $547,000 would not  go to                                                                    
Fairbanks. Mr. Jessee replied in the affirmative.                                                                               
Senator Bishop asked if those  people that currently receive                                                                    
services would  then become homeless  again. Mr.  Jessee did                                                                    
not know what would occur, if the funding was eliminated.                                                                       
Senator  Bishop   asked  if  he  had   done  a  cost-benefit                                                                    
analysis, and what strain it  would put on other services in                                                                    
the state.  He wondered if Medicaid  expansion may "backfill                                                                    
that  number."  Mr. Jessee  noted  that  the trust  had  not                                                                    
examined  the   downstream  costs,  if  the   services  were                                                                    
eliminated. He  furthered that  Medicaid expansion  may help                                                                    
to fill  the numbers.  He remarked  that Medicaid  would not                                                                    
directly fund  the housing,  but it  did fund  the treatment                                                                    
services that  individuals need in  order to  maintain their                                                                    
Co-Chair  Kelly  clarified that  on  the  BHAP handout,  the                                                                    
items listed were on the  capital list. Mr. Jessee noted the                                                                    
BHAP handout listed the agencies  that received the BHAP and                                                                    
special needs housing grants in the past.                                                                                       
Co-Chair  Kelly wondered  if those  items were  part of  the                                                                    
capital budget  piece. Mr. Jessee  replied that  those items                                                                    
were included  in the missing  mental health  capital budget                                                                    
bill.  He stated  that one  body took  all of  the projects,                                                                    
except for  one, and  the other body  did the  opposite. The                                                                    
result of that process made all items conferenceable.                                                                           
10:24:43 AM                                                                                                                   
Mr.  Jessee   concluded  his   slides  and   encouraged  the                                                                    
committee  to look  broader  than  subcommittee budgets.  He                                                                    
noted that  a lot  of state costs  are driven  by behavioral                                                                    
health issues, and  the state should get a  better handle on                                                                    
those issues.                                                                                                                   
Vice-Chair  Micciche   hypothesized  that  if   we  expanded                                                                    
Medicaid,  could  Mr.  Jessee  provide  offsets  that  would                                                                    
reflect  some  benefit  to  the  beneficiaries.  Mr.  Jessee                                                                    
responded  the affirmative.  He stated  that there  would be                                                                    
some  opportunities for  offsets  in  the behavioral  health                                                                    
grants.  He  stressed  that  the  Medicaid  expansion  would                                                                    
provide federal reimbursement, so  there would be GF savings                                                                    
in the  grants. He stressed  that the offsets  were intended                                                                    
to expand capacity to better serve the beneficiaries.                                                                           
Vice-Chair Micciche requested a  document to further explain                                                                    
the  benefit of  Medicaid  expansion. Mr.  Jessee agreed  to                                                                    
provide that information.                                                                                                       
Senator   Hoffman  wondered   if  the   document  could   be                                                                    
delineated  with  a timeframe.  Mr.  Jessee  agreed to  that                                                                    
Senator  Olson surmised  that  Mr. Jessee  was  in favor  of                                                                    
Medicaid expansion, as  long as guidelines were  in place to                                                                    
further  continue  to  the   current  programs.  Mr.  Jessee                                                                    
replied in the affirmative.                                                                                                     
10:29:45 AM                                                                                                                   
Senator  Dunleavy asked  how the  committee  would hold  the                                                                    
trust accountable.  Mr. Jessee replied that  future requests                                                                    
for  project funding  innately have  accountability measures                                                                    
when the results are examined.                                                                                                  
Senator Dunleavy asked if Mr.  Jessee had the same vision of                                                                    
Medicaid as "everyone  else."  Mr. Jessee  responded that he                                                                    
did  not  consider  Medicaid expansion  as  a  panacea,  but                                                                    
considered it  as a  way to help  more individuals.  He felt                                                                    
that  Medicaid expansion  would develop  a more  sustainable                                                                    
state budget over time.                                                                                                         
Senator Dunleavy  asked if  the trust  reported unsuccessful                                                                    
programs  to the  legislature. Mr.  Jessee replied  that the                                                                    
trust worked to identify  the problematic programs, and then                                                                    
attempt to assist the programs.                                                                                                 
Co-Chair Kelly  commented that  it would  be of  interest to                                                                    
the committee  to have a  list of discontinued  programs Mr.                                                                    
Jessee agreed to provide that information.                                                                                      
Co-Chair  Kelly   noted  that   the  trust  had   been  very                                                                    
responsible, even  though the legislature had  provided very                                                                    
little  oversight. He  felt that  there should  be a  higher                                                                    
level of scrutiny on the mental health budget.                                                                                  
10:35:06 AM                                                                                                                   
Vice-Chair Micciche  agreed with  Co-Chair Kelly  and stated                                                                    
that  the AMHTA  was an  important asset  and expressed  his                                                                    
appreciation for Mr. Jessee's tenacity.                                                                                         
Senator   Hoffman  asked   Mr.  Jessee   to  give   a  brief                                                                    
description   of  the   success   of  the   AMHTA,  and   to                                                                    
characterize  how  the  investments were  made.  Mr.  Jessee                                                                    
noted that  a venture capital  fund such  as the trust  is a                                                                    
unique and wonderful  way to serve. He noted  that the trust                                                                    
invested  over $16  million dollars.  He  stressed that  the                                                                    
trust   had  many   separate   interest,   because  of   the                                                                    
investments  in  innovations  and systems  to  better  serve                                                                    
Senator Hoffman queried  the number of acres  managed by the                                                                    
trust.   Mr.  Jessee   replied   that   the  trust   managed                                                                    
approximately 950,000  acres. He stated that  the Trust Land                                                                    
Office   had  contributed   nearly  $100   million  to   the                                                                    
endowment,  and  continued  to  produce  $4  million  to  $5                                                                    
million per year on top of the generated principal.                                                                             
Co-Chair Kelly asked how many acres were owned by UA.                                                                           
PAT  PITNEY,  DIRECTOR,  OFFICE OF  MANAGEMENT  AND  BUDGET,                                                                    
OFFICE  OF  THE  GOVERNOR,  replied that  UA  owned  250,000                                                                    
Senator  Olson wondered  if the  mental  health budget  took                                                                    
recommendations from other  departments when formulating its                                                                    
budget. Mr. Jessee referred to  slide 7, and stated that the                                                                    
trust money  MHTAAR is  a zero-based  budget. He  noted that                                                                    
they complete  a two  year budget,  which the  trustees will                                                                    
Senator  Olson asked  if  Mr.  Jessee was  in  favor of  the                                                                    
budget  process.  Mr.  Jessee replied  in  the  affirmative,                                                                    
because  it   was  helpful  to   have  a   long-term  budget                                                                    
SB  28  was   HEARD  and  HELD  in   committee  for  further                                                                    
10:42:36 AM                                                                                                                   
The meeting was adjourned at 10:42 a.m.                                                                                         

Document Name Date/Time Subjects
021015 SFC SB 28 Mental Health Budget Overview.pdf SFIN 2/10/2015 9:00:00 AM
SB 28
021015 AHFC BHAP Funding.pdf SFIN 2/10/2015 9:00:00 AM
SB 28