SENATE BILL NO. 124(efd fld) An Act relating to grants for alcoholism and drug abuse programs. Co-Chair Harris MOVED to ADOPT SB 124(efd fld), #23- GS111\A.A as the working document before the Committee. Representative Croft pointed out that the effective date had failed but noted that he did not see an effective date. Co- Chair Williams interjected that is how it is before the Committee. It does not have an effective date. Representative Joule asked if the A.A version consisted of one page only. Co-Chair Williams clarified that it did. Co-Chair Harris asked if there had an effective date when it passed the Senate. Co-Chair Williams reiterated that this was the bill before the Committee. JOEL GILBERTSON, COMMISSIONER, DEPARTMENT OF HEALTH & SOCIAL SERVICES, clarified that when the bill was introduced as SB 124, it did have an effective date of July 1, 2003. The cost savings associated with that version are included in the Governor's budget. It was passed out of the Senate without the effective date. Co-Chair Harris interjected that when the effective date fails, then that language should be removed from the title and body of the bill. Representative Joule asked about the difference between the House HES version and the Senate version. Co-Chair Williams explained that the House HES dropped it from 25% the first year to 17.5% until July 1, 2004. The Senate version is the Governor's version minus the effective date. That would amount to a 25% savings as of July 1, 2003. Representative Joule clarified that the House HES version would transition the process to 2004. The Senate version removes it all on July 1, 2003. Representative Joule OBJECTED to adopting the Senate version of the bill. Representative Croft noted that he also supported the House HES version. The House version keeps the effective date and changes the percentage, which would be a better procedure. Co-Chair Williams commented that if the Committee could get the Senate version before them, then they could entertain an amendment to reinstate the July 1, 2002 effective date, from the Governor's original bill. Representative Joule asked if it could be amended to indicate that transition. Co-Chair Williams replied he would not support the amendment. A roll call vote was taken on the motion to work from the Senate version. IN FAVOR: Foster, Hawker, Meyer, Stoltze, Whitaker, Chenault, Harris, Williams OPPOSED: Joule, Moses, Croft The MOTION PASSED (8-3). Commissioner Gilbertson commented that the general fund savings resulting from the Governor's bill would be in the amount of $1.6 million dollars. The bill increases local investments and involvement in the alcohol treatment grants provided to the communities. Local investment indicates the success of the programs. The current 10% match is low. He stressed that this would be a sensible effort to increase local effort and to keep grants on the street. He concluded that at a time when State government does not have the necessary resources to continue to fully fund all these programs, it is important that the local investment and commitment come forward. Representative Croft noted that the fiscal notes indicate approximately $1.6 million dollars savings. He inquired if it was assumed that the communities would step up the same level of effort on alcohol services. KAREN PEARSON, DIRECTOR, DIVISION OF ALCOHOL AND DRUG ABUSE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, clarified that the hope is that the communities will generate that additional revenue and that the services can remain the same. Representative Croft questioned the total State effort spent on alcohol services statewide. Ms. Pearson responded that certain programs would be held harmless at the same rate. There is not an across the board difference. Representative Croft emphasized that it is being assumed that the municipalities would make up the $1.6 million dollars. Ms. Pearson replied that was correct. Representative Joule pointed out that the Legislature this year is: · Proposing to cut revenue sharing to municipalities by 25%; · Proposing to cut debt reimbursement; and · Proposing more reliability on faith based programs. He stressed that all these reductions are coming from the same pot. He warned about the stress and burden these actions would place upon the local communities. Commissioner Gilbertson advised that the way in which the bill is structured, most of the smaller communities are exempt. He emphasized that it was not indented to "shirt the shift costs to the local government" but rather to keep the grants on the streets. Representative Joule noted that last year, the State increased the alcohol tax. He asked how much of that was spent on drug and alcohol related problems. Commissioner Gilbertson replied that the State spent roughly $7 million dollars of the alcohol tax package toward new programs and/or the infrastructure. He added that 50% of the total alcohol money was invested in programs. Representative Joule recommended that the money raised from that tax should be placed back into programs related to that concern. Commissioner Gilbertson stated that the total investment in alcohol treatment programs is higher than it was in FY03 & FY04. The Administration is investing additional resources from the alcohol tax. He reminded members that there is a general fund short fall at this time and that the Department of Health & Social Services took more than $50 million dollars in general fund reductions. Representative Hawker referred to the fiscal note, pointing out the exclusion of the grantees that receive less than $30 thousand dollars. He asked the mechanism used to determine that amount. Karen Pearson explained that those tend to be the smaller program grant to schools and communities. There were five of those grants. The community based suicide prevention grants were all excluded from that, as they have no way to generate revenue. The grants tend to fall within category types. Within the treatment programs, the ones that are geared for women and youth are being held harmless because of the vulnerability of those populations. Representative Hawker understood that some of the categories would fall under the provision listed on Page 7. Ms. Pearson replied that was correct and that the Department retains the ability to waive anytime the needed 10%. Representative Hawker noted that the Department intends to make use of that provision in certain cases. Commissioner Gilbertson agreed that was correct. Representative Croft observed that with the communities affected by the fiscal note, the State would be spending about $1 million dollars. To reduce that 90% to 75% would be going from $1 million dollars when a reduction from that percentage would be leaving a change from a $1 million dollar community effort to $2.5 million dollars. He stressed that would be a "huge increase" for those communities. Representative Croft inquired if there was information available that the communities would be able accommodates that. Commissioner Gilbertson acknowledged that the legislation will impact communities. He added that there is a system of programs to award grants. There are more entities looking for grants than there are grants. He added that the programs would still be offered. He stressed that the general fund savings would help the Department address the fiscal concerns. A number of grants were completely eliminated. The Department decided that instead of taking $1.6 million dollars of grants off the table, it changed it to having more local investment. There will be better programs, better applications and more community involvement. The overall savings may be larger in the long run. Programs will be more sustainable with less volatility. He concluded that the Department had to make a decision on how to achieve the necessary general fund savings while maximizing the number of services. Representative Croft asked if the fiscal note could be more accurate if it assumed something less than the municipalities being left with the entire obligation. TAPE HFC 03 - 72, Side B  Commissioner Gilbertson clarified that it was assumed that some of the grants would be awarded and that the Department would continue to administer the grants. He added that many of the grants would continue to be "out on the street". Representative Croft understood those funds would be the municipal match portion of it. Commissioner Gilbertson replied that it could be an in-kind contribution. In response to a comment by Representative Croft, Commissioner Gilbertson reiterated that the State's overall alcohol effort had increased. Representative Croft asked if the line had been decreased in a substantial way, what would that level be. Commissioner Gilbertson responded that in the Governor's budget proposal, there is a $3.5 million dollar additional general fund investment into alcohol treatment programs that target primarily rural juveniles who currently do not have access to treatment. Additionally, other funds have been designated for the preservation of families. Money in the Governor's budget is designated for those two populations. Representative Croft questioned if the efforts to add increases to offset decreases had survived the majority process. Commissioner Gilbertson responded that the budget was funded from the Senate side and the moved to the House side. ANN HOPPER, (TESTIFIED VIA TELECONFERENCE), PROGRAM DIRECTOR, FAMILY FOCUS PROGRAM, FAIRBANKS, testified in opposition to the bill. She voiced serious concerns with the increase in match for these programs. These areas are already "maxed to the brim" in terms of what they are able to afford and the quality of service that they provide. The 80% of the youth served at the community shelter that are under the age of 18 have alcohol related incidences in their lives. Ms. Hopper stressed that reducing or threatening current services will catch up with the State down the road. She encouraged that the State build upon the programs that are currently available. Taking away treatment removes the hope. If the hope is removed, she asked where would people turn. She noted that some communities have no other resources and maintained that since alcoholism is a disease, it should be considered in a medical model that addiction problems impact other portions of the budget. Ms. Hopper urged reconsideration of this issue, keeping it at the current 10% rate. ANNETTE FRYBERGER, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE DIRECTOR, FAIRBANKS NATIVE ASSOCIATION, FAIRBANKS, noted that the Fairbanks Native Association provides a continuum of care through a residential treatment center for many alcohol related problems. She noted that some programs will not be immediately affected by the increased match. She noted her support for the House Version of the bill, which implemented the increase in a gradual, stepwise fashion. She noted that programs might otherwise not be able to achieve their match. She requested time to implement the change. SENATOR TIM KELLY, SUBSTANCE ABUSE ASSOCIATION, JUNEAU, observed that traditionally the Senate has been against this type of funding for alcohol programs. He requested that the Committee revisit the decision to adopt the Senate version of the bill; he encouraged that the House HESS version would implement the changes over time. He speculated that a decrement of $1.6 million would be destructive to the State of Alaska. Co-Chair Williams MOVED Amendment #1, which would add a new section: "Section 2. This Act takes effect July 1, 2003". Representative Stoltze MOVED a conforming title amendment, which adds the language "provide for an effective date". There being NO OBJECTION, the amendment as changed was adopted. Representative Foster MOVED HCS CS SB 124 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Joule OBJECTED. Representative Joule stated that the House HESS version of the proposed legislation was more worthwhile in that it would allow organizations to have adequate time to make the needed adjustments. A roll call vote was taken on the motion. IN FAVOR: Hawker, Meyer, Moses, Stoltze, Chenault, Foster, Williams, Harris OPPOSED: Joule, Whitaker, Croft The MOTION PASSED (8-3). HCS CS SB 124 (FIN) was reported out of Committee with "individual" recommendations and with fiscal notes #1, #2, #3, & #4 by the Department of Health & Social Services.