Legislature(2017 - 2018)SENATE FINANCE 532
02/16/2017 09:30 AM Senate FINANCE
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| Fy 18 Budget Overview: University of Alaska | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
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SENATE FINANCE COMMITTEE
February 16, 2017
9:35 a.m.
9:35:44 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:35 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Mike Dunleavy
Senator Peter Micciche
Senator Donny Olson
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
James Johnsen, President, University of Alaska; Senator
Berta Gardner; Senator Gary Stevens.
SUMMARY
FY 18 BUDGET OVERVIEW:
UNIVERSITY OF ALASKA
Co-Chair Hoffman stated that the committee would be going
through a different process in handling the operating
budget and not doing business as usual. He shared that the
Senate had come up with a plan to try to address the $3
billion budget shortfall, and had found an additional $300
million in cuts to the operating budget. He referred to the
governor's proposed plans to raise revenue including a
motor fuel tax and revision of the Permanent Fund Dividend
(PFD) plan. He thought that if all three of the governor's
revenue measures were to be implemented, there would still
be a $674 million deficit the following year.
Co-Chair Hoffman continued, stating that even if the Senate
accomplished its proposed $300 million in reductions, the
state would still be operating at a deficit of well over
$500 million. He thought the legislature had made
substantial reductions over the course of the preceding
years, and mentioned the departments that represented large
components of the budget: the University of Alaska (UA),
the Department of Transportation and Public Facilities, and
the Department of Health and Social Services. He
communicated that he planned on having overviews of the
state's four major cost drivers to enable members to
understand how each component was providing services to the
people of Alaska. In prior years, the committee had not
focused on specific departments, but rather heard overviews
of each agency.
Co-Chair Hoffman informed that the subcommittee chairs
would continue to operate and would come forward with
recommendations. Because the Senate had taken a new
approach, there would be additional hearings, starting with
today's meetings. He expressed that the intent of the
presentation was to have as detailed as possible
understanding of the services that UA provided to the
people of Alaska.
^FY 18 BUDGET OVERVIEW: UNIVERSITY OF ALASKA
9:39:45 AM
JAMES JOHNSEN, PRESIDENT, UNIVERSITY OF ALASKA, expressed
appreciation for Co-Chair Hoffman's remarks, and echoed the
sentiment that it was not possible to move forward doing
business as usual. He commented that UA was not moving
forward in a business-as-usual manner. He hoped that the
committee would recognize that in addition to being one of
the four major cost drivers in the state, UA was also one
of the major drivers of the economy and future. He
acknowledged the Senate's plan and fiscal focus, and its
attention to making sure that government was operating in
the most cost-effective manner. He stated that he would
address the values that UA provided the state, including a
commitment to cost effectiveness.
President Johnsen discussed the presentation "University of
Alaska - FY18 Budget Overview" (copy on file).
President Johnsen turned to slide 2, "Constitution &
Statutes":
AK Const. Art. 7, § 2 State University
University of Alaska is hereby established as the
state university and constituted a body corporate. It
shall have title to all real and personal property now
or hereafter set aside for or conveyed to it. Its
property shall be administered and disposed of
according to law.
AK Const. Art. 7, § 3 Board of Regents
The University of Alaska shall be governed by a board
of regents. The regents shall be appointed by the
governor, subject to confirmation by a majority of the
members of the legislature in joint session. The board
shall, in accordance with law, formulate policy and
appoint the president of the university. He shall be
the executive officer of the board.
Alaska Statutes Title 14 Chapter 40
AS 14.40.10 - AS 14.40.817 govern the University of
Alaska
President Johnsen noted that the University would be
celebrating its 100-year anniversary of the territorial
legislature establishing the foundation of the college. He
reminded that UA had its roots and origin in the
constitution itself.
President Johnsen discussed slide 3, "University Mission":
"The University of Alaska inspires learning, and
advances and disseminates knowledge through teaching,
research, and public service, emphasizing the North
and its diverse peoples."
Regents' Policy 01.01.01
President Johnsen stated that the University mission
statement was similar to that of other land-grant
universities, but it was also unique.
Co-Chair Hoffman acknowledged Senator Berta Gardner and
Senator Gary Stevens.
President Johnsen viewed slide 4, "University Mission":
Education
Academic and vocational instruction
Research
Scientific and academic research, advancing
knowledge basic and applied
Service
Sharing knowledge to address Alaska's community
needs
President Johnsen mentioned the UA Cooperative Extension,
and the fact that almost every UA faculty member had a
service responsibility that was beneficial to communities.
President Johnsen spoke to slide 5, "100 Years of Service":
Established in 1917 as the Alaska Agricultural College
and School of Mines, today:
· One campus in 1922 - 15 statewide campuses today
· One graduate in 1923 - 4,800 graduates in 2016
· Alaska's #1 higher education institution - in
education, research, and workforce preparation
· America's #1 higher education institution -
affordability
· World's #1 research university on the Arctic
President Johnsen noted that Alaska led the nation in the
percentage of Alaskans with some college and no degree. He
asserted that UA was the most affordable university in the
United States if its tuition was divided into household
income.
9:44:55 AM
President Johnsen reviewed slide 6, "Serving All Alaskans,"
which showed a state map and a list of all the campuses of
UA. He noted that the university served the state, and
remarked on the size of the state. He noted that there were
three university campuses and twelve community campuses
across the state, in addition to outreach centers and
distance delivery.
President Johnsen displayed slide 7, "Alaska Sized
Benefits":
A major economic engine in Alaska generating direct and
indirect benefits:
· 15,740 jobs result from University activities
· $1.1 billion in annual economic/employment impacts
statewide
· $43.7 million in economic impacts to rural Alaska
alone
· $1 of investment generates $3 in economic activity
· $1 of state research investment generates $4.1 in
research dollars
President Johnson relayed that UA had contracted the
McDowell Group to study the economic impact of the
university on the state. He noted that there were some
prominent UA research programs that generated over $6 to $7
in return for each dollar of state investment.
President Johnsen showed slide 8, "Research Diversity &
Service":
The university is home to more than 60 research
centers addressing critical issues important to
Alaskans, our lifestyle and our economy
Geophysical Institute
Institute of Social and Economic Research
Institute of Arctic Biology
Arctic Domain Awareness Center
Alaska Center for Energy and Power
Institute for Circumpolar Health Studies
Alaska Volcano Observatory
Ocean Acidification Research Center
Center for Behavioral Health Research and
Services
Alaska Coastal Rainforest Center
Center for Alaska Native Health Research
President Johnsen spoke to the variety of research work
done by the university. He highlighted the Geophysical
Institute; and the Institute of Social and Economic
Research (ISER), which did relevant public policy research
that was of value to the state. The Arctic Domain Awareness
Center was doing work for the United States (U.S.)
Department of Homeland Security; and had the U.S. Coast
Guard as its primary client. He discussed the close ties
that the university had with the military in Alaska. He
spoke to the breadth of issues addressed by the research
centers listed on the slide. He added that the Center for
Alaska Native Health Research had the top quality rating of
the National Institutes of Health, and that it was an
American Recovery and Reinvestment Act (ARRA) program.
9:48:06 AM
President Johnsen turned to slide 9, "Challenges":
· Geography - location, size, regionalism
· Students - low high school graduation rate, low
college going rate, low college completion rate,
half require developmental education
· Economy - high in natural resources - low in "new
economy", historically high wage to education
ratio, industry workforce gaps
· Structure - 4 administrative structures, 3
institutional accreditations, geographic spread
· Budget - heavy reliance on resource-dependent
state funding, 3rd year of budget reductions
· Revenue - private giving, comparatively low
tuitions, land grant deficit
President Johnsen considered that UA was a microcosm of the
state, and he was thereby addressing the state's fiscal
challenges within the university. He relayed that prior to
the committee meeting he had a meeting with the
commissioner of Department of Education and Early
Development (DEED) to work on alignment with K-12 education
and the university. He discussed the commitment of the
department to provide college and work-ready graduates for
the economy and the university system, while the commitment
of UA was to be aligned and to produce more top-quality
teachers for the state.
President Johnsen informed that UA had relatively low
private contribution rates. He discussed the historical
legacy of the land grant, which the university was trying
to address. He thought part of the UA's heavy reliance on
the state was due to a land grant deficit. He explained
that UA did not get the close the 500,000 acres that was
due under various federal acts; but had received 110,000
acres.
Co-Chair Hoffman asked President Johnsen to provide a brief
snapshot of what had happened with tuition in the previous
5 years.
President Johnsen relayed that tuition had increased at a
rate of about 5 percent each year. Currently, UA tuition
was 84 percent of the Western Interstate Commission for
Higher Education (WICHE) states' average. He informed that
the WICHE states received 90 percent of Alaskan students.
Co-Chair Hoffman asked when the last time tuition was
raised.
President Johnsen relayed that the tuition had been raised
in the current year. He discussed a proposed 9 percent
tuition increase, at which time the students (and the
University of Alaska Anchorage (UAA) debate team) had made
a counter-proposal of a 5 percent increase.
9:52:04 AM
Vice-Chair Bishop referred to the second bullet on slide 9,
and requested to meet later with President Johnson and the
Commissioner of Education.
Senator Olson referred to President Johnsen's comment about
a low amount of private sector contributions. He wondered
about the reason for the low contribution rate. He thought
there were sizable corporations in the state that could
contribute.
President Johnsen acknowledged he was making a
generalization, but did not believe there had been a strong
culture of philanthropy in Alaska after having heavily
relied on state funding for many years. He offered to bring
additional data to the committee, with a breakdown of
sources of revenue to the UA Foundation (the private
fundraising arm of UA). He discussed the different funding
sources at the university, and made note of a significant
decline in the rate of corporate giving from 2015 forward.
He cited relatively low alumni giving rates, and noted
there was new leadership in the foundation that had
emphasized private giving and alumni outreach. He commented
that many leading institutions ran multi-year campaigns.
Senator Olson disagreed with President Johnsen's comment
about Alaska not being a philanthropic state. He referred
to the Pick.Click.Give program, under which state residents
could donate money to a variety of organizations. He asked
President Johnsen to contextualize his comment.
President Johnsen noted that he personally participated in
the Pick.Click.Give program, and thought that the Rasmussen
Foundation had stepped up to lead the program after
recognizing the need to build a philanthropic culture in
the state.
9:56:00 AM
President Johnsen discussed slide 10, "State Budget
Reductions":
The university's budget has been reduced $53 M (14
percent) over the past three years.
The overall institutional impacts are greater than
just the reduction of programs and personnel.
The slide also showed a bar graph entitled 'UA State
General Funds FY 15 - FY 18.' He made note of the cascading
reductions, and noted that the governor's proposed budget
included a continuation of funding at the $325 million
level.
Senator Micciche thought it would have been helpful to see
the state support for the university system for FY 14,
which he assumed was the peak of state support.
President Johnsen stated that the FY 14 amount was $377
million.
Senator Micciche asked if FY 14 was the peak of funding for
UA.
President Johnsen affirmed that FY 14 was the peak General
Fund (GF) contribution by the state.
Co-Chair MacKinnon asked if the funding reflected on the
slide was all operating funds, or if it included deferred
maintenance funds that the state also provided.
President Johnson specified that the graph showed operating
money for FY 15 and FY 16, and did not recall that deferred
maintenance had come out in those years. In FY 17 the
regents had reallocated some operating funds for deferred
maintenance, because the capital budget request for
deferred maintenance was not provided. He recalled that
there had been approximately $10.5 million reallocated.
Co-Chair Hoffman believed that the legislature also
appropriated a substantial amount in capital to the
infrastructure of the university.
President Johnsen stated that the legislature had very
large capital budgets over the years that had provided
tremendous facilities for UA. Additionally, there were
years with generous contributions to deferred maintenance.
He commented on the university's continued large deferred
maintenance backlog, which ran from $800 million to $1
billion. He would discuss steps to address the backlog in a
later slide. He reminded that new facilities brought new
operating expenses, which were often not provided.
Co-Chair Hoffman clarified that he had been referring to
the power plant. He asked if the president recalled the
total amount of funding that was committed to the
university for the important piece of infrastructure.
President Johnsen agreed that the power plant was a very
important piece of infrastructure. He estimated that $245
million in capital investment had been committed by the
state, and the university also utilized some bonds.
Co-Chair Hoffman stated that although that although there
had been some reductions, the university was viewed as very
important asset of the state, ergo the substantial
investment in the power source.
10:00:21 AM
President Johnsen viewed slide 11, "Budget Reduction
Impacts":
· Jobs impacted
o Cumulative FY15-FY17 headcount reduction:
over 900
o More than 250 reduced assignments or
increased workload
· Academic program reductions
o Since January 2016, 50 academic programs
eliminated or suspended
o Fewer sections and larger class sizes
o Increases in faculty instructional workloads
· Administrative function consolidation and service
reductions
· Closed Galena, McGrath, & Shishmaref Learning
Centers
· Reduction of faculty travel and professional
development funding
· Reduced research faculty start-up/seed
availability
· Telecommunications contract cost reduction
· Reduced owned & leased space; defeased &
refinanced debt
President Johnsen relayed that work was ongoing to complete
the engineering building on the University of Alaska
Fairbanks (UAF) campus, which would be done in one year and
would provide state-of-the-art space for faculty and
students to work. He discussed the ongoing collaboration
between the two Schools of Engineering at UAA and UAF.
President Johnsen specified that the precise number of
position reductions at UA was 923. He continued that UA had
reduced assignments and had made part-time jobs from some
full-time positions. He noted that some faculty might get a
reduced service, creative activity, or research assignment.
He discussed the inverse trend of economic upswing in the
Lower 48, and noted that other universities were seeing
more support to be competitive in faculty research rivalry.
He discussed the increasing prominence of the Arctic as a
subject of study, and noted that the area was becoming
competitive. He discussed the over $1 million per-year
reduction in wide-area network costs; and noted that UA was
selling facilities and reducing expenses through other
space changes.
10:03:22 AM
Senator Micciche asked if there was an active revenue arm
that pursued opportunities for UA to provide research for
the private sector. He did not feel strongly about
competing with the private sector, but wondered about
research that was not available through private sector
firms.
Mr. Johnsen communicated that by far, UA was the leading
research entity in the state. He furthered that UA
partnered with and provided the majority of the workforce
for many private research organizations in the state. He
stated that UA worked with industry, and he had met with
individuals in the oil and gas sector as well as other
sectors, who were interested in doing more work in the
state. He discussed the cycle at UA by which alumni ended
up in positions in industry and then returned to the
university to work on a project.
Senator Micciche followed up to inquire about Mr. Johnsen's
assertion that UA was the number one research institute for
Arctic research issues. He asked about global outreach for
potential revenue-enhancing research to offset state
funding reductions.
President Johnsen could not identify specific organizations
that UA had pursued, but asserted that the university was
recognized by all other universities and organizations
operating in the North as the leader in Arctic research. He
agreed that global outreach was the right direction to
pursue. He thought it was important to recognize that it
was crucial to conduct research that was relevant to the
North, and to Alaska in particular. He thought the mix of
research at UA had global implications, and wanted to make
sure the research was highly relevant to what was happening
in the state. He used the example of the Alaska Center for
Energy and Power, which did world-class research on micro-
grids. He stated that Alaska led the world in research on
micro-grids, and other countries were interested.
President Johnson continued discussing Arctic research. He
thought it was important to recognize that UA faculty and
researchers were not allowed (under their research
contracts) to apply for additional research opportunities
under the contracts; which was why the GF component of the
research body was so important.
10:07:05 AM
Vice-Chair Bishop relayed that had worked closely with the
university for the past 10 years, specifically with the
Mining and Engineering Department. He referred to cross-
border collaboration with the Yukon Territory. He discussed
sharing mine training knowledge, as well as working with
countries such as Mongolia. He mentioned the notion of
exporting knowledge to bring in revenue.
Senator Micciche referenced the 14 percent reduction in GF
funding to UA since FY 14, and queried if UA was putting
more effort towards opportunities to bring in research
revenue.
President Johnsen pointed to the regent's reallocation for
deferred maintenance, and stated that funds had also been
reallocated for research. He had identified four high-level
goals for the institution: work-force development,
research, economic development and diversification, and
building a culture of education in the state. He re-stated
that research was a top priority of the institution, and UA
was reallocating funds towards it.
Senator Micciche stated that Alaska was largely dependent
upon revenue from one commodity, and thought there should
be as much emphasis as possible on exporting knowledge of
the Arctic as a revenue base and as a move towards
diversification.
10:10:33 AM
President Johnsen spoke to slide 12, "10-Year Glide Path
Framework":
The University's 10-year framework uses benchmarked
goals to incorporate gradual, sustainable reductions
in state general fund appropriations while increasing
university revenues through enrollment and diversified
revenue
President Johnsen spoke to the graph on slide 12, entitled
'Moderating State General Fund Support.' He noted that UA
had thought deeply about the budget and was beginning to
look forward. He shared that the glide path on the graph
represented an approach to thinking about the UA budget. He
explained that in 2025 it was projected that it would be
necessary for 65 percent of Alaska's workforce to have some
postsecondary education (25 percent baccalaureate; 40
percent career and technical certificate, license or
degree).
President Johnsen expressed that UA had contemplated how to
moderate state's GF support and still meet the essential
workforce goals for the state. He pondered what was a
reasonable GF request from the state. He stated that the
graph identified 1.3 times the national average per-student
GF appropriation, which equated to $312 million. He stated
that the goal would be to gradually bring down the GF
request over the period of time on the graph, acknowledging
the state's fiscal condition. He thought that UA could
serve the state's needs more effectively over time through
a gradual reduction in dependence in state funding.
President Johnsen noted that the slide did not reflect
tuition, and noted that UA had a goal of moving from the
current level of 84 percent of WICHE states' average up to
equate to the WICHE states' average. He added that UA had
goals in philanthropy and research. He stated that
enrollment was a key factor in making the vision work. He
discussed the importance of working with the commissioner
of DEED, for the purpose of achieving the goals of
increasing high school graduation rates and college
attendance rates. Additionally, he considered that
outreach to the 115,000 Alaskans with some college and no
degree would be essential in achieving the workforce goal
and making the financial model work.
Senator von Imhof referenced diversified revenue and asked
if UA had done an analysis of how it could benefit if the
U-Med road [a proposed extension of Elmore Road through
Anchorage's University-Medical District] was completed. She
wondered how much land UA owned around the proposed
corridor, and if it could be leveraged to create income
opportunities for the university.
President Johnsen was certain the UA owned substantial land
in the area, and strongly supported increased access to the
U-Med area from the north. He noted that there was a
superhighway that bisected the campus through UAA Drive,
which was extremely unsafe. He mentioned that other
stakeholders in the area were strongly supportive of
improving access to the area. He thought there was
tremendous commercial opportunity for growth in the area,
and mentioned the idea of research parks and business
incubators. He discussed work being done at Auke Bay with
commercial benefits.
10:15:39 AM
Co-Chair Hoffman wanted to address the 10-year glide path
depicted on slide 12. He asked about the designation of the
University of Alaska Southeast (UAS) campus and how it fit
into the glide path framework.
President Johnsen referenced the UA Board of Regents recent
decision to assign UAS the administrative leadership for
teacher education programs. He stated that the decision was
tied to the workforce goal. He noted that currently the
state imported 70 percent of its teachers, which resulted
in a high turnover rate as compared to teachers prepared
within the state. He stated that there was a strong
interest in increased accountability in the teacher
education programs, to drive the numbers up. He discussed a
degree program at UAS in which a student with a
baccalaureate degree could come to campus for six weeks in
the summer, be teaching and taking courses during the year,
and receive a Master of Arts in Teaching degree at the end
of the first year.
President Johnsen continued, relaying that UA had worked
with DEED and school districts across the state to have
provisional certification so that the students could be
paid while teaching. He thought that UAS would make the
designation a top priority, while the other two main
campuses had competing priorities.
10:18:20 AM
Co-Chair Hoffman asked President Johnsen about the ten-year
glide path represented on the slide, and mentioned the
Senate's 5/4/3 plan. He referred to the governor's
assertion the previous year that the budget was critical,
and the current budget was in a crisis situation. He
thought the Senate was of the same mindset. He referred to
structural changes to mental health and corrections
programs the previous year (through SB 74 and SB 91); and
to the revenue sharing program.
Co-Chair Hoffman discussed changes to the Community
Assistance Program, in which municipalities had been asked
to take a reduction of 50 cents on the dollar. He relayed
that he discussed education and other topics with his
constituents, and discussed the deficit. He suggested that
if agencies were in crisis mode, its budget be reduced by
ten percent. He thought the problem with the major four
cost drivers in the state was that given the immense size
of the budgets, even a five percent cut would translate to
a sizable amount. He knew the governor had worked with the
Board of Regents and other departments to come up with his
proposed budget. He thought it was important to acknowledge
the deficit and attempt to adjust spending.
10:22:37 AM
Co-Chair Hoffman relayed that he made a special order
presentation on the Senate floor, and lauded the budget
reduction efforts of the Chief Justice of the Supreme Court
of Alaska. He wondered if the UA finance subcommittee would
work with President Johnsen's office to look at
prioritizing the 5 percent reduction target that the Senate
had adopted. He reiterated that the Senate was taking the
lead in tightening the state's budget. He emphasized the
need for the legislature to work with all agencies. He
asked Mr. Johnsen to address how he would endeavor to
reduce expenses.
President Johnsen recognized the need to reduce expenses in
the state. He noted that the University had taken a 14
percent budget reduction over the previous few years. He
continued that UA was engaged in a contingency budget
planning process, as it had been the previous year. He
thought the current challenge was to identify what UA could
stop doing in response to the budget cuts. He referred to
the Strategic Pathways process, through which UA had
identified areas to streamline. He appreciated the position
of Co-Chair.
Co-Chair Hoffman stated that the legislature's challenge
was to assure the people of Alaska that services would
continue. He emphasized the need to look at the long-term
fiscal health of the state. He commented on the drastic
reduction in state savings. He feared there would be
substantial reductions if a solution was not found. He did
not think an additional 5 percent reduction seemed
substantial in light of the potential consequences.
10:27:50 AM
President Johnsen stated that he was pleased to continue
working with Senator von Imhof on the issue.
Co-Chair MacKinnon requested the Legislative Finance
Division to produce a graph that would depict the
reductions. She had seen graphs of spending, and stated
that different agencies had taken different amounts of
cuts. She discussed the small percentage of the state
budget comprised of the Legislative and Judiciary branches.
She wanted the graph to include all the branches of
government, to reflect the cuts that had been made from FY
15 to present. She remarked that while UA had been cut,
there were other agencies that had been cut to a much
greater degree. She supported Co-Chair Hoffman in asserting
that 5 percent was a small cut. She acknowledged that some
funds accessed federal funds.
10:31:02 AM
Senator Micciche thought slide 12 was very important. He
thought that 200 percent of the national mean on a per-
student FTE basis was an extreme outlying condition. He
requested the data set that produced the graph on the
slide. He wanted to understand the funding makeup of the
Western states.
President Johnsen stated that UA was happy to provide the
requested information. He specified that the university had
some data from the Great Recession, when some states were
ratcheting down contributions and increasing tuition to
address fiscal challenges. He discussed various revenue
tools; such as online education, stronger partnerships with
K-12 education, dual enrollment programs, and stronger
community colleges.
President Johnsen reviewed slide 13, "FY18 Governor's
Budget Highlights":
· Level funding over last year: $325 M UGF
· Reduction in Receipt Authority: $17 M -
University $10 M, Fed $7 M
· Tuition rate increase (~5%): ~$5 M in revenue
· Reduction in PCNs: 225 positions
President Johnsen detailed that a 1 percent tuition
increase was equivalent to $1 million. He furthered that
the reduction in PCNs was mostly clean-up.
President Johnsen displayed slide 14, "Program Areas,"
which showed a table. He pointed out that 71 percent of the
UA budget went to student instruction, 21 percent to
research, and 8 percent to service. He thought the ratio
gave an idea of the priorities of the UA mission. He
indicated that the number of employees followed the same
ratio; with 75 percent of full time employees focused on
student instruction, 17 percent on research, and 7 percent
on service. He noted that 16 percent of total expenditures
came from tuition and fees charged to students. He
reiterated that research generated more than $4 in revenue
for every $1 invested.
10:35:08 AM
Vice-Chair Bishop asked how much of the total on slide 14
was comprised of administration.
President Johnsen relayed that UA tracked the information,
and agreed to provide the number at a later time.
Co-Chair MacKinnon asked if students were informed that the
state paid for over 50 percent of instructional costs every
year.
President Johnsen was confident that student leadership was
aware of the fact, and ventured to say the student body as
a whole was not aware.
Co-Chair MacKinnon wondered if perhaps there should be an
informational line on student tuition documents that
reflected the state contribution. She discussed past
student opposition to hydrocarbon development, an indistry
which had generated all of the income that was being
invested in their education. Additionally, she recalled
that students had not been supportive of income taxes, nor
a state sales tax. She thought there was a lack of
understanding of how the state was funding the university.
President Johnson indicated he understood Co-Chair
MacKinnon's point.
President Johnsen showed slide 15, "Education Imperative -
65% by 2025":
By 2025, 65% of Alaska jobs are expected to require
some postsecondary education; current attainment is
37%.
UA's long-term goal is to support Alaska's evolving
workforce needs by producing more graduates and
developing a stronger culture of education.
President Johnson qualified that UA would not account for
all of the 65 percent of Alaska jobs listed on the slide,
as there were other postsecondary and career/technical
institutions across the state. He continued that UA was
devoting itself to meeting the goal for the state's
economy. He discussed the benefits of a higher level of
education.
Co-Chair Hoffman asked if President Johnson had considered
growth areas in the state; including healthcare services,
which was particularly important in the area of the state
he represented.
President Johnsen answered in the affirmative. He referred
to projections that indicated increased demand for the
healthcare workforce.
Co-Chair Hoffman asked if UA was trying to get more of its
budget towards helping pay for the education of students to
aid them in achieving degrees. He mentioned higher tuition
costs at institutions such as the University of Washington
and others in the Lower 48.
President Johnson thought there should be more capacity in
helping students afford degrees, and stated that funding it
by the budget request was one of the regent's top
priorities. He relayed that UA was looking to put more
funds toward needs-based financial aid. He informed that UA
was reviewing its health programs through the Strategic
Pathways process, which he would elaborate on later in the
presentation. He continued that the process examined what
steps needed to be taken to increase production of people
in the health industry across the state. He mentioned that
Roald Helgeson, CEO of the Alaska Native Tribal Health
Consortium, was part of the Strategic Pathways group. He
detailed his recent attendance at a graduation in Bethel
the previous spring, at which the majority of graduates
were receiving certificates as community health aids.
10:40:57 AM
President Johnsen turned to slide 16, "Percent of 25-64
Year Olds with College Degrees - Associate and Higher,
2013," which showed a bar graph. He described the graph as
an array of the percentage (by state) of 25 to 64-year-olds
with an associate's degree or higher. He pointed out
Alaska's position at 37 percent. He relayed that there were
no states (as of 2013) at Alaska's goal of 65 percent.
Based on his meetings with other state system presidents
across the country, increasing degree attainment was the
top priority for all. He was confident that if committee
members attended an National Conference of State
Legislatures (NCSL) meeting, that the issue would also be a
top priority.
Senator Micciche asked about the definition of "some
postsecondary education" and wondered if it was equivalent
to an associate's degree.
President Johnsen answered in the negative. He furthered
that there would be many valuable certificates and licenses
that would be counted in the 65 percent goal.
Senator Micciche was confused by the fact that the graph on
slide 16 measured the percentage of individuals with
college degrees of the associate level or higher. He
wondered what the percentage would be if certificates were
included.
President Johnsen did not have a figure available but was
confident that the percentage for Alaska would be greater
than the 37 percent represented on the slide. He clarified
that the percentage would include education such as an
electrician's license, which UA would not have provided. He
cited collaboration with DEED and the Department of Labor
and Workforce Development.
President Johnsen discussed slide 17, "Education and
Income," which showed a scatter graph. He thought the slide
showed two views of Alaska, and showed that it was a low-
education, high-wage state. He drew attention to the lower
right quadrant on the graph, where Alaska was shown near
the State of Wyoming; which was another natural resource
state where citizens had high personal income and
relatively low college attainment.
President Johnsen viewed slide 18, "Education and Income,"
which showed a graph similar to the previous slide, but
with the axes flipped. He pointed out that Alaska was not
on the correlation line, in terms of higher income than
would be expected given the state's education attainment
level. He noted that a regression analysis was not merely a
visual tool; but according to statisticians, was also a law
that dictated over time one would regress to the mean. He
was concerned that if the state did not increase its
education attainment, then it could safely be predicted
that Alaska would move towards the mean, where incomes were
considerably lower than they were today. He thought it was
a challenge to increase Alaska's level of education
attainment in the current fiscal climate.
Vice-Chair Bishop commented that the state would have to
advance to expand its economy to increase opportunities for
Alaskan's. He mentioned the state's reliance on one
industry, while other states had diversified economies.
President Johnsen agreed with Vice-Chair Bishop.
10:45:52 AM
President Johnsen spoke to slide 19, "Alaska's Brain
Drain," and noted that the graphic emphasized the point
that UA needed to do a better job in partnership with K-12
education and other partners to drive up high school
graduation and college-going rates. He also thought it was
important to reach out to employers, to create a funnel of
education and employment for the state.
Senator Dunleavy referred to slide 19, and asked if
President Johnson was satisfied with recruitment efforts of
in-state students.
President Johnson answered in the negative, and noted that
there was a privately-funded campaign (including radio and
television) to advertise the university. He stated that
there was increased funding for recruiting in the FY 18
budget, including traditional high-school students as well
as Alaskans that had some college and no degree. He pointed
out that UA would not meet its goal by relying only on high
school graduates, but rather must reach out to other
Alaskans with high-quality convenient programs. He
emphasized that it was not possible to expect people to
quit jobs or move to complete college work.
Senator Dunleavy asked how it was determined that a student
would need a developmental course. He asked if UA used the
Accuplacer assessment.
President Johnsen answered in the affirmative.
Senator Dunleavy wondered how many of those who needed
developmental coursework were non-resident students. He
asked about the total cost per year dedicated to
developmental education in the university system. He asked
how many students taking developmental coursework were UA
scholars. He asked how many students taking developmental
coursework were receiving the Governor's Performance
Scholarship.
President Johnsen agreed to provide the information.
10:49:45 AM
Senator von Imhof spoke to slide 19, and found the numbers
alarming. She referred to a study by Northern Economics,
which had tried to provide causation for some of the
numbers displayed on the slide. She thought DEED would give
a presentation later in the day, and she would inquire
about whether anyone from the department had seen the
study.
Co-Chair MacKinnon asked if President Johnson could discuss
how online degree-seeking might be affecting the
university. She wondered how effective the instructors were
at engaging students. She considered hypothetically that
had slide 19 reflected a business, it would be under
consideration for a cut if there was only a 5 percent
success rate. She acknowledged that there were individuals
attending college for other reason than graduation. She
wanted to know how to measure what happened in the
classroom.
President Johnson thought Co-Chair MacKinnon's question was
important and complex. He noted that the slide only
addressed baccalaureate degrees, while there were also many
trades programs that that would make the outcome increase.
Additionally, many students retained jobs (particularly in
trades) after not completing a degree program. He spoke to
the quality of UA programs and courses, and informed that
faculty were peer-reviewed regularly.
President Johnson continued to speak to Co-Chair
MacKinnon's question. He informed that all UA classes were
reviewed by students, and programs were institutionally
accredited. Accreditation included a rigorous review
programs by an external organization to ensure that student
learning outcomes were met. He continued that many UA
programs had specialized accreditations in specific fields
such as education, engineering, business, and nursing;
whereby quality control was the top criterion. He had
learned from K-12 education literature that 30 percent of
the variance in school performance was due to in-school
variables; and 70 percent of the variance was due to
external factors. He thought if the statistics applied to
UA, there would be a great deal of work to do outside of
the university to prepare Alaska's students for success.
10:54:22 AM
Co-Chair MacKinnon thought maybe the budget subcommittee
for UA could ascertain what was being done towards
increased recruitment and retention of students pursuing
advanced degrees.
Vice-Chair Bishop thought there was much information in the
slide that needed to be discussed in greater detail. He
stated he would address the matter with the subcommittee
chair.
Senator Micciche thought it was fair to say that UA was not
responsible for the 70 percent of high-school students that
did not attend college. He considered the proportion of
students that ended up attending UA, and graduated within 6
years; which signified a 50 percent success rate. He noted
that many Alaskan students attended college longer than
many states in the Lower 48. He thought the graphic on the
slide was confusing. He thought UA could be more successful
by capturing the 16 percent of high school graduates who
left the state for college.
Mr. Johnsen thanked Senator Micciche for his comment on the
slide, and suggested that UA did have a responsibility to
the 70 percent that did not attend college. He referenced
studies that showed the single most important in-school
factor for K-12 student success was the quality of the
teacher. He mentioned UA's work towards strengthening its
College of Education, and helping to build the K-12 system.
Co-Chair Hoffman thought there had been robust dialogue
with the members, and the members fully understood the
importance of the university and what it provided. He
thanked UA for its persistence in generating dollars with
funds they were given. He shared that he was a graduate of
UAF. He asked if Mr. Johnsen had closing remarks to make
regarding the university and its importance.
10:58:46 AM
President Johnsen congratulated Co-Chair Hoffman on the
Alumni Achievement Award for Business and Professional
Excellence that he had received from UAF the previous year.
He summarized that there was more information in the
presentation regarding the consolidations that the regents
had decided upon, as well as more about plan that would
enable UA to have a legally defensible land grant. He noted
that later in the day he would be speaking about the state
of UA to the State Chamber of Commerce. He would be
discussing three points: the strength of the university,
the challenges that were facing UA, and a statement of
confidence and optimism about addressing the challenges.
President Johnsen acknowledged that the state's current
fiscal challenges could also be present in the future, and
emphasized the importance of commitment and values of the
state. He was enthusiastic about continued work with the
university budget subcommittee to address any issues.
Co-Chair Hoffman reminded that the committee was hearing
from the four major cost-driver entities in the state to
gain deeper understanding, and asked if any members had
additional comments.
11:01:08 AM
Co-Chair MacKinnon asserted that she had confidence in
President Johnsen and the Board of Regents of UA. She
expressed appreciation for the fact that he had
acknowledged the state's financial position. She expressed
appreciation for all his hard work and outreach to
individual legislators. She referred to information in the
newspaper that was unflattering to the university. She
thought President Johnsen had done an admirable job
considering the challenges that the state was facing, and
the huge 14 percent cut the university had to accommodate.
Vice-Chair Bishop concurred with the comments of Co-Chair
MacKinnon. He discussed the importance of morale and its
connection to optimum performance at UA. He expressed
confidence in the employees of the university system.
Senator Micciche agreed with the comments of Vice-Chair
Bishop. He commented that he was also a proud graduate of
the UA system.
Senator Olson praised President Johnsen's presentation.
ADJOURNMENT
11:05:17 AM
The meeting was adjourned at 11:05 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 021617 UA FY18 Overview SenFin.pdf |
SFIN 2/16/2017 9:30:00 AM |
Operating Budget FY18 |