Legislature(2015 - 2016)SENATE FINANCE 532
03/10/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB27 | |
| Overview: Fy 16 Department of Labor and Workforce Development | |
| Overview: Fy 16 Department of Military and Veterans Affairs | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 27 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 10, 2015
9:06 a.m.
9:06:20 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:06 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Donny Olson
Senator Mike Dunleavy
Senator Lyman Hoffman
MEMBERS ABSENT
None
ALSO PRESENT
Heidi Drygas, Commissioner, Department of Labor and
Workforce Development; Paloma Harbour, Director, Division
of Administrative Services, Department of Labor and
Workforce Development; Colonel Laurel Hummel, Commissioner,
Department of Military and Veterans Affairs; Colonel Robert
Doehl, Deputy Commissioner, Department of Military and
Veterans Affairs; Susan Colligan, Director, Division of
Administrative Services, Department of Military and
Veterans Affairs.
SUMMARY
SB 27 APPROP: OPERATING BUDGET/LOANS/FUNDS
SB 27 was HEARD and HELD in committee for further
consideration.
FY 16 BUDGET OVERVIEWS:
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT
SENATE BILL NO. 27
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, making
reappropriations, and making appropriations under art.
IX, sec. 17(c), Constitution of the State of Alaska,
from the constitutional budget reserve fund; and
providing for an effective date."
9:07:50 AM
^OVERVIEW: FY 16 DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT
9:08:18 AM
HEIDI DRYGAS, COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, discussed the PowerPoint, "FY 2016
Budget Overview, Department of Labor and Workforce
Development" (copy on file). She shared that she was born
and raised in Fairbanks, and attended the University of
Alaska Fairbanks (UAF). She attended law school, and
graduated in 2003. She continued to discuss her background
and resume.
Commissioner Drygas highlighted slide 1, "Department
Overview":
MISSION:
Provide safe and legal working conditions and
advance opportunities for employment.
KEY PROGRAM PRIORITIES:
•Protect Alaska's workers through statutory and
regulatory assistance and enforcement.
•Workforce development to support Alaska hire and
economic development.
•Income replacement for injured, unemployed, and
permanently disabled workers.
Co-Chair Kelly suggested that the focus of the presentation
be on the budget requests.
Commissioner Drygas stated that slide 2 showed some of the
office locations and job centers.
Commissioner Drygas looked at slide 3, which was the
department organizational chart.
Commissioner Drygas discussed slide 4, "Protect Workers."
She stressed that the state saw a significant reduction on
the work place time lost due to illnesses and injuries from
a rate per 100 employees of 1.13 in FY 13 to a record low
of 0.061 in FY 14. She stressed that the decrease was a
direct result of the Division of Labor Standards and Safety
developing a ten-hour Occupational Safety and Health
Administration (OSHA) course that was used to improve
safety in the target industry of seafood processing. The
majority of the decrease occurred in that industry. She
expressed concern, because the other body proposed
eliminating the funding that supported those efforts. She
felt that developing proactive programming to keep workers
safe, functioned as a cost savings measure overall.
Commissioner Drygas highlighted slide 5, "Workforce
Development." She stated that the vocational rehabilitation
programs performance had remained strong over time.
9:12:05 AM
Co-Chair Kelly looked at slide 4, and surmised that the
reduction rates were an overall reflection, or strictly the
seafood industry. Commissioner Drygas replied that
reduction rates were an overall reflection of the
workforce. She stressed that there was a program to train
the seafood processing industry for better handling of
seafood. She stressed that the industry was fraught with
workplace injuries. The rate of the decline could be
attributed to the specific training program. She remarked
that the training program cost $300,000, and felt it was a
worthwhile investment.
Senator Bishop remarked that the keeping the workplace
incident rate low would keep the overall workman comp
premiums at a low rate.
Vice-Chair Micciche agreed that the unintended consequences
of the budget reductions could be far higher than the
initial program cut.
Commissioner Drygas addressed slide 5, "Workforce
Development." She shared that the vocational rehabilitation
programs performance remained strong in 2014.
Commissioner Drygas looked at slide 6, "Income
Replacement." She shared that the department saw a marked
improvement in the timeliness of Fishermen's Fund Claim
payments from an average of 60 days in FY 13 to an average
of 47 days in FY 14. She stated that the reduction resulted
from an implementation of follow-up protocol that quickly
notified claimants of any missing documents required to
process the claims. The successes were due in large part to
existing public and private partnerships she stressed that
the department worked hard to develop the partnerships.
Commissioner Drygas discussed slide 7, "Workforce
Development Partnerships":
State Partnerships
-Alaska Military Youth Academy - WorkKeys
assessments
-Department of Corrections - WorkKeys assessments
and Hiland project
-Department of Education and Early Development -
WorkKeys assessments, education program outcomes,
and Career and Technical Education grants
-University of Alaska - Training program outcomes
-Division of Juvenile Justice - Johnson Youth
Center training
Private/Non-profit Partnerships
-Alaska Employers
-Tribal and Community Vocational Rehabilitation
Programs
-Construction Education Foundation
-Alaska Works Partnership
-Regional Training Centers and Private Training
Providers
-Membership on Boards and Councils
9:17:06 AM
Senator Bishop wondered if the other body had proposed to
cut the Construction Education Foundation. Commissioner
Drygas responded in the affirmative.
Senator Bishop wondered how much of the funding was used to
bring high school students into the trades. Commissioner
Drygas replied that there was approximately $2 million for
K-12 in the Construction Education Foundation.
Co-Chair MacKinnon disclosed that her husband was the CEO
and served on the board of directors for the Construction
Education Foundation.
Senator Dunleavy wondered if there were discussions
regarding job displacement management due to the job losses
that would occur during the budget climate in the state.
Commissioner Drygas replied in the affirmative. She wanted
to insure that the Unemployment Insurance (UI) fund was
solvent.
Vice-Chair Micciche remarked that there was a 75 percent
reduction in lost work case days. He felt that the oil and
gas industry hoped that many of the people that were
displaced from the shutdown of the Agrium Plant would be
able to return to the Kenai for work. He felt that the
success on a community level was extraordinary.
Commissioner Drygas responded that the department took
great pride in the rapid response program to ensure that
the workers get back to work as quickly as possible.
Commissioner Drygas looked at slide 8, "FY 2016 Endorsed
Budget: $179,537.8 million." She explained that the
department's governor's budget totaled $179.5 million; 53
percent of which was federal funds. The department's UGF in
FY 16 totaled $29.2 million, which was down by $4.2 million
from the current year, and was equivalent to a 12.8 percent
reduction. To implement the reduction, the department
focused on the governor's goal of redesigning
administrative services to maintain maximum program and
services delivery. The reductions proposed in the
governor's budget were significant enough that there would
be direct service implications, but the decisions were
informed and reasoned. She was committed to continuing to
streamline services; find efficiencies; and develop
partnerships to maintain key programs and services. She did
not believe that the reductions made by the House
subcommittee fig the key criteria.
9:22:16 AM
Commissioner Drygas discussed slide 9, "Governor's Endorsed
Budget Overview":
Operating Budget:
One-time and Temporary Increment Reversals
•-$1.4 million UGF for the Alaska Youth
First/Compass Alaska program
•-$150.0 DGF for the Rural Apprenticeship
Outreach program
•-$226.8 UGF and -$100.0 DGF for the Alaska
Vocational Technical Center (AVTEC) Registered
Nurse program
Designated General Fund Increases
•Additional program receipt authority for the
Alaska Safety Advisory Council ($35.0) and AVTEC
($110.0)
•$429.0 in additional Technical and Vocational
Education Program (TVEP) funding to regional
training centers specified in Alaska Statute
23.15.835 Known Federal and Other Funding
Reductions
•-$3.0 million less in federal and other funding
that supports the state's job center network
9:22:46 AM
Senator Bishop wondered if the decrement was only for the
registered nurse program. Commissioner Drygas replied that
the reversal was only for the registered nurse program.
Senator Bishop wanted to examine that issue further in the
subcommittee.
Senator Dunleavy remarked that the administration was in
disagreement with the recommended cuts from the House
subcommittee. Commissioner Drygas agreed.
Senator Dunleavy asked that she restate her disagreement.
Commissioner Drygas responded that she believed very
strongly that reductions must be made thoughtfully and
responsibly, and she did not believe that the cuts from the
House subcommittee were responsible or thoughtful.
Senator Dunleavy wondered if there would be additional
recommendations for cuts and reductions above what was
submitted by the governor's budget. Commissioner Drygas
responded that she would continue to examine her programs
to determine the best solutions. She felt that the House
proposed reductions would cost more money than the cuts
would provide. She felt that reducing OSHA funding would
hurt the bottom line more than it helps the bottom line.
She agreed to continue to examine more areas to cut. She
remarked that the current time was not a good time to
diminish the efforts to develop Alaska work force.
Vice-Chair Micciche preferred that commissioners were not
compliant to the legislature, and appreciated the honesty.
He hoped to continue to passionately defend the programs.
Co-Chair Kelly stressed that the commissioners were not
available to argue against the governor's budget.
Commissioner Drygas continued to discuss slide 9.
9:28:21 AM
Senator Dunleavy surmised that DLWD was examining the
possibility of program redundancies. Commissioner Drygas
agreed.
Senator Dunleavy wondered if there would be a plan to
concentrate on one particular training center for a
specific trade, in order consolidate and reduce cost while
maintaining quality. Commissioner Drygas responded that the
governor wanted to focus on career and technical education
(CTE). The department was working to examine its own
programs to eliminate duplications, and work with industry
to ensure that the training programs that were desired.
Senator Dunleavy asked if there was a continued robust
presence of providers of training. Commissioner Drygas
replied that there were both union and nonunion public and
private partnerships. She stressed that those relationships
were continually cultivated.
Commissioner Drygas looked at slide 10, "Governor's
Endorsed Budget Overview":
Operating Budget continued
$300.0 Unallocated Unrestricted General Fund Reduction
•Delete three positions from the Commissioner's
Office and the Administrative Services Division
to attain the Governor's goal of redesigning
administrative infrastructure to maintain maximum
program and services delivery
8 percent Unrestricted General Fund ($2.5 million)
Reduction
•Reduce administrative and support positions, and
streamline services to minimize direct service
impacts (-$1,052.2)
•Reduce funding available to offset lease
expenses (-$311.4)
•Closure of the Alaska Vocational Technical
Center's Anchorage Campus, which houses AVTEC's
Allied Health programs (-$478.9)
Co-Chair Kelly queried the additional amount that the House
removed. Commissioner Drygas replied that the House removed
an additional $6 million, which was a 31 percent reduction.
9:34:04 AM
PALOMA HARBOUR, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT,
announced that the total UGF reduction in the FY 16 amended
budget was $4.2 million.
Commissioner Drygas highlighted slide 11, "Governor's
Endorsed Budget Overview":
Operating Budget continued
8 percent Unrestricted General Fund ($2.5 million)
Reduction continued
•Reduced Adult Basic Education instructional hours (-
$172.5)
•Eliminate a Wage and Hour Investigator (-$153.9)
•Less funding for pass-through grants in support of
Alaska Construction Academies and Rural Training
Centers (-$367.6)
Capital Budget
Re-appropriation
•$530.0 unexpended balance of the AVTEC Third Avenue
Dormitory project to provide for the replacement and
upgrading of AVTEC's information technology (IT)
equipment and infrastructure.
Senator Bishop queried the total number of Adult Basic
Education (ABE) test takers that received diplomas.
Commissioner Drygas replied that there were approximately
17,000, but agreed to provide an exact figure.
Senator Bishop wondered if less people would be able to
take the test, due to the budget reduction. Commissioner
Drygas deferred to Ms. Harbour.
Ms. Harbour explained that the ABE program estimated that
the reduction would serve approximately 80 less individuals
per year. She stated that the GED underwent a significant
change in 2014 to a computer based test. The GED test was
much more difficult, so it required greater instruction
just to take a computer-based test. There will be a demand
on the program, but the number of test takers had reduced.
Senator Bishop encouraged the department to consider a
partnership with another provider to help with the
instructional hours, because GEDs were another way into an
apprenticeship program.
Co-Chair MacKinnon looked at slide 10, and remarked that
there would be a deletion of three positions from the
Commissioner's Office and Administrative Services. She
wondered if those positions were currently filled.
Commissioner Drygas responded that the positions would not
result in any layoffs. She furthered that some people were
moved to different positions to eliminate some vacancies.
Co-Chair MacKinnon commented that the reoccurring cost
would save money in perpetuity if those positions were
already filled.
Commissioner Drygas discussed slide 12, "Vision for the
Department":
Streamline programs and revamp the workforce
development system to ensure maximum effectiveness and
efficiency within a sustainable budget
Increase Alaska resident hire in priority industries
and occupations to ensure Alaskans are getting
Alaska's jobs
Ensure economic stability for injured, unemployed and
disabled Alaskans
9:42:30 AM
AT EASE
9:44:21 AM
RECONVENED
9:44:32 AM
Vice-Chair Micciche remarked that there were certain
Alaskan industries that had a high nonresident rate. He
queried solutions to the nonresident rate in some
industries. Commissioner Drygas responded that the
department was working to develop an increase the Alaska
hire in the seafood industry. There was work with the
Pacific Seafood Processors Association in working with ways
to employ Alaskans. She shared that there was a successful
prisoner reentry program into the seafood processing
industry, and many of those individuals were some of the
best performing workers in the particular plant. There was
an interest to develop and further broaden that program to
other processors.
Vice-Chair Micciche felt that it was important for
residents to understand that there were some industries
that were considered "seasonal."
Senator Bishop remarked that the state may receive some
royalty relief, if the state reached 80 percent Alaska
hire.
Vice-Chair Micciche encouraged the commissioner to educate
Alaskans on the true residency rates.
9:50:31 AM
AT EASE
9:58:20 AM
RECONVENED
^OVERVIEW: FY 16 DEPARTMENT OF MILITARY AND VETERANS
AFFAIRS
9:58:49 AM
COLONEL LAUREL HUMMEL, COMMISSIONER, DEPARTMENT OF MILITARY
AND VETERANS AFFAIRS, introduced herself.
COLONEL ROBERT DOEHL, DEPUTY COMMISSIONER, DEPARTMENT OF
MILITARY AND VETERANS AFFAIRS, introduced himself.
Commissioner Hummel looked at the PowerPoint, "FY2016
Budget Overview, DMVA" (copy on file).
Commissioner Hummel addressed slide 2, which showed the
2015 plan and the 2016 amendment. She stated that column
three showed the difference between the two.
Commissioner Hummel addressed slide 3, "FY 2016 Budget
Reductions":
Decreases in the Governor's Amended FY2016 budget
•$4,175.0 UGF - Alaska Aerospace Corporation
State GF operating and sustainment funds have
been entirely eliminated. Aero Receipts have been
correspondingly increased to enable the
collection of contract revenue.
•$350.0 UGF - Interior Veterans Cemetery
Operations
Construction of the Interior Veterans Cemetery
has been delayed due to availability of federal
funds. Therefore, operating funds are not needed
in FY2016.
Co-Chair Kelly noted that it was $350,000. Commissioner
Hummel agreed.
Senator Bishop surmised that the department purchased some
property for the new cemetery in Fairbanks. Commissioner
Hummel agreed.
Senator Bishop wondered if the budget had an effect on the
new cemetery. Colonel Doehl replied that the state must
find a suitable location, so the federal government would
build the cemetery. Once the cemetery was built, the
department would operate the cemetery.
Senator Hoffman queried the timeline for the completion of
the cemetery. Commissioner Hummel replied that the federal
government had indicated that the cemetery would be
completed the following year.
Vice-Chair Micciche noted that the request was also in the
FY 15 budget, and felt no need to provide operating funds
for a cemetery that was not currently operation.
10:03:16 AM
Commissioner Hummel continued to discuss slide 3:
•$300.0 UGF - Base Realignment and Closure Impact
Assistance
DMVA will work with available resources and
coordinate with other interested parties to
advocate for sustainment of Alaska's military
installations.
Commissioner Hummel highlighted slide 4, "FY 2016 Budget
Reductions":
Decreases in the Governor's Amended FY2016 budget
•$350.0 UGF - Army Guard Facilities Maintenance
DMVA anticipates some cost savings due to changes
in cost-sharing ratios with the National Guard.
•$133.6 GF Match/$75.5 Fed - Pre-Disaster
Mitigation Activities
Pre-Disaster Mitigation activities will be
reduced.
Co-Chair MacKinnon assumed that the $133,600 in GF would
leverage the $75,000. Commissioner Hummel agreed.
Vice-Chair Micciche looked at slide 4, and remarked that
the decreases would amount to $5.2 million. He wondered if
the difference between $6.7 million and $5.3 million
related to PCN reductions. Commissioner Hummel deferred to
Ms. Colligan.
Co-Chair Kelly asked Vice-Chair Micciche to restate his
question.
Vice-Chair Micciche remarked that the changes in the bullet
points totaled $5.3 million, but the UGF decrements shown
on slide 2 were $6.7 million.
SUSAN COLLIGAN, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS,
explained that there three other small items including
decrements, air guard facilities, and a $94,500 decrease.
She remarked that there was reduction of $68,200 for a food
service position in the Alaska Military Youth Academy
(AMYA), which was a recently vacated position. She
furthered that there was a reduction of $13,700 in National
Guard Military Headquarters, and there were continued
examinations of administrative efficiencies. She remarked
that there were some net numbers in the first slide, and
noted that there were some increases in personal services
due to contractual increases.
Vice-Chair Micciche surmised that it was a $1.462 million
gap, and there was only $150,000 accounted. He queried the
location of the other $1.3 million in detailed reductions.
Ms. Colligan agreed to provide that information.
10:08:43 AM
Commissioner Hummel discussed slide 5, "FY2016 Budget
Highlights":
Increases in federal authority in the Governor's
Amended FY2016 budget
•$3,005.0 Fed - Alaska Aerospace Corporation
The Department of Defense's current budget
contains federal funds for support of non-federal
launch facilities. AAC is one of only two such
facilities nationwide.
•$1,300.0 Fed - Alaska Military Youth Academy
(AMYA)
AMYA anticipates award of a 40-month grant to
provide a job-training component to selected
cadets who have completed AMYA's residential
program.
•$250.0 Fed - Office of Veterans Affairs
The Office of Veterans Affairs was awarded a
federal grant to off-set the costs of ground or
sea transportation of veterans in highly rural
areas.
Senator Dunleavy wondered if the grants expired, and
whether there was an expectation that the state would then
provide GF funds. Commissioner Hummel replied that she did
not know if there was an expectation that the grants were a
one-time opportunity or long-term programs. She deferred to
Colonel Doehl.
Colonel Doehl explained that the supplemental programs were
eliminated when the federal dollars were fully depleted,
because they were 100 percent federally funded.
Senator Dunleavy remarked that there were fiscal issues
that caused people to ask new questions, and noted that
there were numerous grants that could be awarded without
legislative approval.
10:12:53 AM
Co-Chair MacKinnon looked at slide 2, and looked at the
"other" category, and remarked that there was an overall
percentage increase. She queried the "other" dollar gains
and wondered how the Aerospace deduction was replaced by
federal receipts. Commissioner Hummel responded that the
other category included $4.175 million of aerospace
receipts and salary increases. The federal receipts of
$4.668 million included approximately $3 million from
aerospace, the $1.3 million in federal grants to AMYA,
$250,000 to veteran services transportation grants, and
salary increases.
Co-Chair MacKinnon remarked that there was no GF for the
grants. She stressed that aerospace could collect receipts,
and then have additional spending authority for the federal
grant. She noted that there was approximately $120,000 that
was not yet identified. She wondered if there was $4.175
million in the other category. Commissioner Hummel replied
in the affirmative, and stated that it also included salary
increases.
10:15:18 AM
Vice-Chair Micciche wondered what the house subcommittee
had determined. Mr. Doehl replied that the House increased
the decrements by approximately $400,000: eliminating a
position in the commissioner's office; eliminating more of
the pre-mitigation funding; and examining savings in Army
and Air Guard facilities.
Senator Hoffman remarked that the governor indicated that
he intended to expand the National Guard in different areas
of the state, specifically rural Alaska. He wondered how
the department planned to accomplish that goal in FY 16.
Commissioner Hummel replied that there would be
revitalization of the Alaska National Guard in rural Alaska
was one of the department's objective, but that was not
included in the current budget. She stated that it was a
complicated issue, and the department must examine how best
to accomplish that effort. She hoped to leverage federal
funds for increased recruitment, transportation, and
training expenses.
Senator Hoffman wondered if the department had conducted
communications with the congressional delegation regarding
the National Guard expansion. Commissioner Hummel responded
that there were no recent conversations.
Senator Bishop commented that there were many training
aspects in Anchorage. He queried the detailed opportunities
for training. Commissioner Hummel agreed to provide further
information.
10:19:53 AM
AT EASE
10:20:32 AM
RECONVENED
SB 27 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:21:43 AM
The meeting was adjourned at 10:21 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 031015 DOLWD Budget Overview.pdf |
SFIN 3/10/2015 9:00:00 AM |
SB 27 |