HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE February 15, 2000 3:56 p.m. MEMBERS PRESENT Representative Fred Dyson, Chairman Representative Joe Green Representative Tom Brice Representative Allen Kemplen Representative John Coghill MEMBERS ABSENT Representative Jim Whitaker Representative Carl Morgan COMMITTEE CALENDAR HOUSE BILL NO. 336 "An Act increasing the eligible maximum amount for quality school grant funding for school districts; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 224 "An Act requiring a public employee labor organization representing employees of a school district, regional educational attendance area, or a state boarding school to give notice before striking." - MOVED CSHB 224(HES) OUT OF COMMITTEE HOUSE BILL NO. 260 "An Act relating to coverage of children and pregnant women under the medical assistance program; and providing for an effective date." - HEARD AND HELD PREVIOUS ACTION BILL: HB 336 SHORT TITLE: QUALITY SCHOOL GRANT FUND INCREASE Jrn-Date Jrn-Page Action 2/04/00 2092 (H) READ THE FIRST TIME-REFERRALS 2/04/00 2092 (H) HES, FIN 2/04/00 2092 (H) ZERO FISCAL NOTE (DOE) 2/04/00 2092 (H) GOVERNOR'S TRANSMITTAL LETTER 2/04/00 2092 (H) REFERRED TO HES 2/15/00 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 224 SHORT TITLE: PERA: NOTICE BEFORE STRIKE Jrn-Date Jrn-Page Action 5/05/99 1180 (H) READ THE FIRST TIME - REFERRAL(S) 5/05/99 1180 (H) HES, L&C 5/06/99 1214 (H) COSPONSOR(S): OGAN 5/07/99 1247 (H) COSPONSOR(S): DYSON 1/25/00 (H) HES AT 3:00 PM CAPITOL 106 1/25/00 (H) -- Meeting Canceled -- 2/03/00 (H) HES AT 4:00 PM CAPITOL 106 2/03/00 (H) -- Meeting Canceled -- 2/08/00 (H) HES AT 3:00 PM CAPITOL 106 2/08/00 (H) Heard & Held 2/08/00 (H) MINUTE(HES) 2/15/00 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 260 SHORT TITLE: MEDICAL ASSISTANCE PROGRAM COVERAGE Jrn-Date Jrn-Page Action 1/10/00 1887 (H) PREFILE RELEASED 12/30/99 1/10/00 1887 (H) READ THE FIRST TIME - REFERRALS 1/10/00 1887 (H) HES, FIN 1/10/00 1887 (H) REFERRED TO HES 1/27/00 (H) HES AT 3:00 PM CAPITOL 106 1/27/00 (H) 2/08/00 (H) HES AT 3:00 PM CAPITOL 106 2/08/00 (H) Heard & Held 2/08/00 (H) MINUTE(HES) 2/15/00 (H) HES AT 3:00 PM CAPITOL 106 WITNESS REGISTER RICHARD CROSS, Commissioner Department of Education & Early Development 801 West Tenth Street, Suite 200 Juneau, Alaska 99811 POSITION STATEMENT: Presented HB 336. CARL ROSE, Executive Director Association of Alaska School Boards 316 West Eleventh Street Juneau, Alaska 99801 POSITION STATEMENT: Testified in support of HB 336 and HB 224. JOHN CYR, President National Education Association-Alaska 114 Second Street Juneau, Alaska 99801 POSITION STATEMENT: Testified in support of HB 336; testified on HB 224. RANDY LORENZ, Researcher for Representative Vic Kohring Alaska State Legislature Capitol Building, Room 421 Juneau, Alaska 99801 POSITION STATEMENT: Presented HB 224. LARRY WIGET, Executive Director Public Affairs Anchorage School District 4600 DeBarr Road Anchorage, Alaska 99519 POSITION STATEMENT: Testified in support of HB 224. DARROLL HARGRAVES, Executive Director Alaska Council of School Administrators 326 Fourth Street, Suite 404 Juneau, Alaska 99801 POSITION STATEMENT: Testified in support of HB 224. KAREN PERDUE, Commissioner Department of Health & Social Services PO Box 100601 Juneau, Alaska 99811 POSITION STATEMENT: Testified in opposition to HB 260. NANCY WELLER, Medical Assistance Administrator Division of Medical Assistance Department of Health & Social Services PO Box 110660 Juneau, Alaska 99811 POSITION STATEMENT: Answered questions on HB 260. JANICE TOWER Alaska Chapter of the American Academy of Pediatrics 7645 Griffith Street Anchorage, Alaska 99516 POSITION STATEMENT: Testified in opposition to HB 260. LEILA WISE PO Box 244034 Anchorage, Alaska 99524 POSITION STATEMENT: Testified on HB 260. GEORGE HIERONYMOUS, Executive Director Beans' Cafe and Kids' Kitchen PO Box 100316 Anchorage, Alaska 99510 POSITION STATEMENT: Testified in opposition to HB 260. MICHELLE SCHUMACHER PO Box 2282 Homer, Alaska 99603 POSITION STATEMENT: Testified in opposition to HB 260. LAUREN CARLTON PO Box 198 Homer, Alaska 99603 POSITION STATEMENT: Testified on HB 260. RUTHE KNIGHT PO Box 3218 Valdez, Alaska 99686 POSITION STATEMENT: Testified in opposition to HB 260. PATRICIA MACPIKE 409 Monastery Street, Number 3 Sitka, Alaska 99835 POSITION STATEMENT: Testified in opposition to HB 260. ACTION NARRATIVE TAPE 00-14, SIDE A Number 0001 [The minutes for HB 297 and the Alaska Mental Health Board Review of the U.S. Surgeon General's Report on Mental Health are found in the 3:10 p.m. minutes for the same date.] CHAIRMAN FRED DYSON reconvened the House Health, Education and Social Services Standing Committee meeting at 3:56 p.m. Members present were Representatives Dyson, Green, Brice, Kemplen and Coghill. HB 336 - QUALITY SCHOOL GRANT FUND INCREASE CHAIRMAN DYSON announced the first order of business as House Bill No. 336, "An Act increasing the eligible maximum amount for quality school grant funding for school districts; and providing for an effective date." Number 0036 RICHARD CROSS, Commissioner, Department of Education & Early Development (EED), came forward to present HB 336. He explained that HB 336 changes existing law to increase the eligible amount school districts are to receive for quality school grants from $16 to $52 per student. The cost of this increase is approximately $7.6 million. The fiscal note on this bill shows zero dollars, and the reason for that is there is $7,552,300 increase in cost. This amount has been placed in the Governor's budget as a part of the foundation formula. In making a comparison to the Governor's budget, the fiscal note is zero, but the department is not trying to hide the fact there is a real cost associated with this bill of approximately $7.6 million. The reason for asking for this increase is to deal with short- term needs that school districts are going to face as a result of the process of implementing the Quality Schools Initiative, specifically the high school graduation qualifying exam. COMMISSIONER CROSS noted it is anticipated that school districts are going to have to implement extra tutoring, summer school programs and different kinds of remediation for students who don't meet the expected higher standards. The idea that school districts are going to be able to immediately adapt to this without any additional resources is an unrealistic expectation. What was anticipated in the budget for the foundation formula was $19.9 million more than the EED is now telling the committee that is needed next year. The reasons for that is some declining school enrollment, some of the federal money received, PL-874 [Federal Law Title VIII, Public Law] funds are greater than anticipated and local communities are going to have to share more of the burden for education because the assessed valuations went up. When the assessed valuations go up the required local effort goes up and therefore the state share goes down. The districts are struggling across the state to deal with this $19.9 million loss. COMMISSIONER CROSS cited the levels of funding from other states on school reform: Washington - $113 per student; Connecticut - $128 per student; Louisiana - $256 per student; Minnesota - $82.74 per student. Much less is being asked for in HB 336. He urged the committee to move this bill along in the process so the school districts can receive the needed funding as a result of significant school reform. Number 0408 REPRESENTATIVE BRICE asked why the money is put in this component of the formula rather than the base student level. COMMISSIONER CROSS answered that this particular component is a grant program that school districts apply for, and it was chosen to make sure that it was directed at the needs school districts are going to have as a result of the testing that will be done. The EED is not asking that each district do the same thing. The school districts will be asked to tell the department what they will do with the money, and EED will approve it assuming it is a strategy that is directed at improving student performance. REPRESENTATIVE BRICE asked if the local school districts are going to be told what to do with the additional money or will it be left up to the local school districts to decide. COMMISSIONER CROSS answered that the districts will be asked to use the money for improving student performance, which may include summer school programs, extended day programs or other remediation programs. The districts are not being told what must be done with the money, but the districts need to direct the money towards the same kinds of purposes that the original $16 was directed toward. It is a grant program; in order to receive the money, the grant does have to be approved by EED. There are strings attached. Number 0612 REPRESENTATIVE GREEN asked: If the student number had gone up from last year, would the commissioner be asking for more money because there were more students to educate? He said there aren't as many students now, so the funding is going down. Representative Green wondered if now the commissioner wants to use that money to do something else; he asked if that is a kind of "shell game." Number 0631 COMMISSIONER CROSS answered that he didn't believe it is. Some of the reason that the $19.9 million is available is due to declining student enrollment but also to an increase in federal funds and an increase in local effort. Districts that have required local effort are going to have to go to their assemblies and ask for more money to make up the state's share in order to perform the same level of service. It isn't all tied up in student enrollment. Some dramatic and radical school reform is going to cause school districts to have to make significant changes to meet the needs of all the students. Under these circumstances, an increase in funding is needed. COMMISSIONER CROSS explained that districts are going to find that many of their students will not meet the high standards. The school districts are going to need to implement some short- term and long-term strategies in order for those students to be successful, particularly because those students haven't had the advantage of third grade, sixth grade or eighth grade assessments. The tenth graders who will be taking this test in three weeks have not had the advantage of that forewarning. COMMISSIONER CROSS stated that without respect to increasing or decreasing enrollment, the EED would be there asking for a fairly modest amount of money to address an immediate need so students can be successful. The larger factor in determining whether or not the Quality Initiatives and the high school graduation qualifying exam is going to be determined is not initially on how the students perform but on how the adults and policy makers behave in reaction to student performance. School districts will need to recognize that some immediate short-term and long-term changes must be made to the way business is done at schools in order for all of the students to be successful. The EED believes that $7.5 million is a very modest way to give the school districts the opportunity to make the significant changes needed. REPRESENTATIVE GREEN asked Commissioner Cross why these changes haven't been implemented in the past. Number 0886 COMMISSIONER CROSS replied that he cannot do anything about what did or didn't happen in the past, but now it is evident that significant changes are going to have to be made. A significant number of the sophomores are not going to meet the standards. That is not a reason for panic; that is a reason to realize that in those students' junior and senior years of high school they are going to have to be involved in activities that are significantly different than what is being offered to juniors and seniors right now if they are to be successful and meet those standards. The EED is asking for an opportunity to give students the tools and opportunities, whether it is extended day program, summer school program or other strategies that districts might identify. Number 0982 REPRESENTATIVE GREEN commented the standards have been talked about all the time he's been here, over 23 years. Now he is hearing something needs to be done, and money is the answer. He isn't sure that is necessarily the case, and he is concerned what is going to be done for these students other than money. COMMISSIONER CROSS answered it is time to move on and do everything possible to make sure the students meet the standards. He thinks if that can be done, it will be something everyone has hoped for. REPRESENTATIVE KEMPLEN commented that these standards have to adapt to what is going on in the world, and today's world is dramatically different than it was 23 years ago. People must recognize that difference and adjust the standards accordingly. By creating the qualifying exam and benchmarks, a very systematic effort is in place to ensure that the students will meet the high standards that are needed to compete in a high-tech world. This bill is looking at recognizing how much students need to know to get a high school diploma today. It seems to him people need to be prepared for that. A number of parents are going to be upset when their children don't do well on the exam and the school district isn't going to do anything for them. There won't be summer school or tutoring, and that would be a gross injustice to the children. This money is prepared for next year's budget. He wondered if a tenth-grade student fails the exam, how long will that student have for remedial work to be brought "up to speed." Number 1204 COMMISSIONER CROSS replied this year's sophomores will have two more years before graduation. The law states that students can take the test after they normally would be scheduled to graduate for three more years. Hopefully the district would be able to get them there in two years. Number 1227 REPRESENTATIVE KEMPLEN asked Commissioner Cross what school districts will do if the state doesn't provide any additional funding to accommodate the students who fail to meet the standards, for example special needs students. COMMISSIONER CROSS said all he can tell the committee is in states that have implemented successful reform and gotten improved performance have provided additional resources in order to have that change occur both on the part of the student and the district. REPRESENTATIVE KEMPLEN concluded that the money is needed to ensure success. COMMISSIONER CROSS replied he believes that additional resources are necessary to get effective change and be successful. Number 1326 REPRESENTATIVE BRICE asked Commissioner Cross if the need for this money is time limited: that after the first four or five years of students having problems, the system will shake out, reform will be made and there won't be a need for this additional money. COMMISSIONER CROSS said whether or not there is going to be additional resources needed for education in the future, it is reasonable to predict that there will be additional needs for resources. The department isn't saying that this is the only type of resource that districts need. This bill identifies a particular need that in the short term will be more urgent than in the long term, but it is difficult to say that three years from now the school districts should be able to absorb it within their existing budgets. It is going to depend on what kind of programs are necessary. Number 1391 REPRESENTATIVE BRICE commented that this leads back to his original point about the need not to have it in a grant line where school districts have to apply and be answerable back to a centralized department but rather to put it within the base of the student level and to increase that level, which obviously needs to be increased. COMMISSIONER CROSS said he is not here to argue against general increases. He is here to argue there is a specific identified need. He believes the success of this year's sophomores depends on some resources being available for programs that are targeted to help them, and that is what is being asked for in this bill. REPRESENTATIVE BRICE commented that hindsight is 20-20. During the debates on SB 36 when the $16 was established, he was led to believe that the $16 was going to cover the needs of school districts coming through the exit exam. The legislature passed SB 36 a year after the exit exam was passed, and at that time he thought the $16 was low. Number 1471 REPRESENTATIVE COGHILL asked if this goes with a regular annual appropriation, and then this particular bill would only affect that one appropriation. COMMISSIONER CROSS answered no, this would become a part of the public school foundation formula and would become calculated every year for districts depending on their adjusted ADM [average daily membership]. REPRESENTATIVE COGHILL asked what is the intended life of the quality schools grant. Number 1505 COMMISSIONER CROSS answered that the quality schools grant, as contemplated in the rewrite of the public school foundation formula, was intended to be an integral part of the formula. It was the intent of the legislature to have a certain part of increase funding for education targeted for a specific purpose. An additional $7.5 million is being asked for in HB 336 for specific purposes that districts identify, as opposed to the general operation of their school districts. REPRESENTATIVE COGHILL asked if the grant is a better vehicle than going directly to the foundation formula. COMMISSIONER CROSS answered that the grant ensures that the money is targeted to specific programs that are identified by the district and approved by the EED. It gives the legislature assurance that the types of changes that need to occur in order to ensure that students meet high standards, there are programs in place, and that the money isn't being diverted and used for some other purpose. Number 1585 REPRESENTATIVE COGHILL said he doesn't understand why HB 336 doesn't have a "shelf life" on it. He wondered why it isn't said that this is needed for a certain period of time, but after that, the regular formula should be sufficient. COMMISSIONER CROSS said there are two answers to that. First, the money was put in the Governor's budget for the next fiscal year. The legislature considers foundation funding and the amount of money that is appropriated for it on an annual basis so all aspects of the foundation formula are considered from year to year. Second, students are going to need more time on task in school whether it is through summer school or extended day programs. In most countries, students spend more time on task than in the United States. Those programs are going to cost, and that cost is not going to go away. REPRESENTATIVE COGHILL commented that doing it this way is questionable to him, especially what is already being paid at what he considers a pretty sizeable foundation formula. He asked Commissioner Cross to explain the relationship of PL 874 to this particular grant. Number 1684 COMMISSIONER CROSS explained that the correct terminology for PL 874 is Title VIII Impact Aid. Federal Title VIII Impact Aid is money that the districts receive "in lieu of taxes." It is money for children who live on military bases or Indian lands where there is no property tax paid. The state takes that amount into account when it determines how much state aid is going to be given to districts. This year the state will receive more impact aid than was anticipated. It doesn't decrease the effort required on the part of school districts, but it does decrease the resources that the state provides under the formula to districts. The school districts still have the same job to do but more of the money received is federal and less state. REPRESENTATIVE KEMPLEN referred to a comment made about more countries requiring longer periods of time for their students to be on task. He assumes that is required because of the demands of a high technological world and wondered if that is correct. Number 1763 COMMISSIONER CROSS answered that's correct. When he started kindergarten, only half of the students in this country were graduating from high school. Today all the students need to meet extremely high standards in order to be successful. It is going to take more time on task. This bill will be an opportunity to identify where the students are starting to fall behind in certain area, and what skills are not being acquired as the third, sixth and eighth graders are tested. The tests will show whether the skill is actually occurring between those grades, and if not, it can be fixed. For many students that will mean more time on math in order to get those skills within the time frame, and that will take additional resources. REPRESENTATIVE GREEN noted that teachers know whether or not their students are measuring up or not. He wondered why has it waited until the students are sophomores to find out, where did the system go astray and how is this going to allow students to learn in two years what they needed to learn in ten. Number 1926 COMMISSIONER CROSS answered the simplest answer is because the assessments in three weeks are going to show things that weren't known before. The standard fare doesn't work for all students. The school districts have to figure out what to do with those students in order to make them successful. He is asking for the opportunity to let the schools keep moving in that direction. REPRESENTATIVE GREEN asked what the $7.5 million is based on. COMMISSIONER CROSS replied that there is nothing magic or scientific about the $52 per student which adds up to the $7.5 million. The department is trying to provide a modest but significant enough increase for schools to be able to implement programs successfully. CHAIRMAN DYSON advised Commissioner Cross to have a sunset or one-time or two-year limit instead of putting it into law forever. Number 2065 CARL ROSE, Executive Director, Association of Alaska School Boards, came forward to testify in favor of HB 336. He associated himself with many of the comments previously stated. He pointed out there is an educational dilemma. With the standards and quality initiatives, there will be accountability which will require some things done differently. Simultaneously, operating expenses are struggled with. The Governor's bill is the accountability and quality part of the solution. There still is an operational problem because there are diverse and tremendous needs. Not all have been met as a result of the foundation formula. The world is changing at a great rate, and it is a different place than what it was. If students can't read, write and compute, they'll not be able to take advantage of many technological changes today. MR. ROSE commented that the decisions made today will impact the children tomorrow. Rather than to just argue the point of how it will be paid for, what bill should move, or what should be addressed, he asked them to take a broader look in terms of where the state is, what the responsibilities are going to be to the students, and how are the students going to be helped to get them get where they need to go. He referred to Commissioner Cross' strategy to look at benchmarks and ensure progress and identify areas of weakness and the third, sixth and eighth grade levels. The school districts are looking for strategies to help those students be at grade level in terms of performance. In the long- term, students coming through those benchmarks will not have a problem with the exit exam which seems to be the major problem right now. MR. ROSE believes it is a short-term problem. The students are not going to fare well this year, but the good news is that the students will succeed in time if the districts meet the responsibilities to get the students the things needed to meet the benchmarks. Operational resources are needed as well as the ability to deal with the quality initiatives. He is concerned about the issue of responsibility to the students. He urged the legislature to do the right thing. The AASB supports the Governor's bill as one of the tools that is needed. Number 2293 JOHN CYR, President, National Education Association (NEA)-Alaska, came forward to testify in favor of HB 336. The NEA believes the Governor's Quality Schools Initiative is going to cost local school districts money; the $16 is not enough. However, he is optimistic. Scholastic Achievement Test (SAT) scores in Alaska are higher than ever, and more than half of the students in Alaska are scoring in the top 50 percent on standardized tests which is better than the national average. Schools are doing a good job, but of course schools could be doing things better. It is true some of the students will not do well on the qualifying exam or the benchmarks. The question though is what is to be done with those students. He also remembers what was done 25 years ago with those students; there were meaningful jobs for those students to support their families. Those days are gone and that is the problem. TAPE 00-14, SIDE B Number 2260 MR. CYR noted that this money will help. It is needed as well as other money. REPRESENTATIVE GREEN asked Mr. Cyr if this is a temporary fix or is it something to be added to the school funding formula in order to bring the students up and keep them there. MR. CYR believes changes are going to be made in the way business is done in education, and that will probably take long-term resources. Putting money into K-12 education is a good investment. The state has to be clear about what it wants schools to do, and the people in the schools need to be held responsible for that. There will be some changes looked at over the next few years. REPRESENTATIVE GREEN said he truly believes that most legislators would gladly spend the money if they knew it would work. Many legislators are concerned that if this amount is paid and there still is trouble, more money would have to be paid later; it is going to take something more than money. MR. CYR said the schools are a measure of the society and many problems come through the doors which are never going to be cured. The ills are too great. A large portion of students are not being served now as well as they could be, and that will cost more. He doesn't know what the appropriate level is, but some of the right things are being done to get there by looking critically at the system rather than just giving out the money. The committee took an at-ease from 4:49 p.m. to 4:54 p.m. CHAIRMAN DYSON closed public testimony on HB 336. [HB 336 was heard and held.] Number 2161 The committee took another at-ease from 4:54 p.m. to 4:59 p.m. HB 224 - PERA: NOTICE BEFORE STRIKE CHAIRMAN DYSON announced the next order of business as House Bill No. 224, "An Act requiring a public employee labor organization representing employees of a school district, regional educational attendance area, or a state boarding school to give notice before striking." [HB 224 was sponsored by Representative Kohring by request.] Number 2111 RANDY LORENZ, Researcher for Representative Vic Kohring, Alaska State Legislature, came forward to present HB 224. House Bill 224 amends the Public Employment Relations Act (PERA) to require that school districts receive a three work days' advance notice before a strike can be called by a union representing district employees. Since 1990, when PERA took effect, there have been three labor strikes. Prior notice was provided on two cases. In January 1999, the Totem Association of Educational Support Personnel called a strike at 10:40 p.m. on Thursday. The strike began the following morning. The district had no time to provide sufficient notice to parents to enable them to make alternate arrangements for the care of their school-aged children. This action caused significant and undue disruptions to the families and placed the children at safety and health risk. MR. LORENZ shared what the Anchorage Daily News reported: Anchorage parents of public school children woke up to an ambush Friday morning. School district office workers and teacher aides voted ... Thursday night to strike, then ... called the strike for Friday. The decision came too late for the evening news. ... Many parents didn't get the word until Friday morning. That left them scrambling for child care and seriously disrupted work and transportation schedules. Parents who have paid attention knew a strike and school closing were possible. They didn't expect to learn of a strike at the school doors or bus stop, or while they were getting their children ready for school. While the union's timing got the community's attention, it in no way got community support. ... The union would have served its own cause and the community better by giving Anchorage parents a weekend's warning in time to make child care, work and transportation arrangements. Blindsiding thousands of families Friday morning served no one's interest. MR. LORENZ noted that in May 1999, Representative Kohring received a letter from the Anchorage School District requesting this legislation. He told the committee that the AASB [Association of Alaska School Boards] also supports legislation which would require and/or their bargaining agencies to give the school district a 72-hour advance notice when a strike will occur. The reason is unannounced strikes will undermine public confidence in the public education system and not serve the community well. The safety of school children would be compromised in the event that school employees walk off their jobs without adequate notice. MR. LORENZ said HB 224 will require three work days' advance notice but will not grant undue advantage to the districts. Employees will retain the full use of the strike weapon while protecting families and their school-age children from unnecessary risk. Opponents of this bill will argue that this will never happen again. However, the precedent has already been set. He encouraged the committee to pass HB 224. It is a matter of child safety, not union rights. Number 1971 REPRESENTATIVE KEMPLEN pointed out that when there is a school closure for snow, parents are only given one day's notice. He asked Mr. Lorenz why the bill specified three days' notice. MR. LORENZ answered that the Anchorage School District requested the three-day notice in order to make arrangements for the children and to get the notification out. Number 1918 REPRESENTATIVE BRICE stated that he takes great umbrage with the statement that this is a bill to address child safety issues; it's not. The Anchorage School District, school boards and administrators that are negotiating throughout the entire process know there is the potential for a strike. If they fail to make the appropriate arrangements, it is their fault, not the fault of the employees who go on strike. MR. LORENZ responded that as a result of the word not getting out to the parents, children were left at the bus stops with no bus service, or students were dropped off at the school doors without anybody there to let them in or let them get out of the weather. Normally, if the weather is bad and schools are closed, parents know it the night before because they can see it, or it is advertised on the radio. When it came to this strike, however, the talks had been going on for a long time, and parents had no way of knowing when they woke up that morning that there was actually going to be a strike. REPRESENTATIVE BRICE stated that it becomes a failure of the administration to take the appropriate action when it was known that a strike was a strong potentiality. Once again, it is not a question of child safety; it is a question of lack of preparedness by the school district that causes the negotiations to go so far. Number 1832 LARRY WIGET, Executive Director, Public Affairs, Anchorage School District, came forward to testify. He stated that the Anchorage School District does support a three-day work day advance notice before a strike can be called. As evidenced by testimony by the sponsor of the bill, written testimony provided to the committee from the Anchorage School District, and articles and editorials that appeared in the Anchorage Daily News, their primary concern for this legislation is for the safety of the students, by allowing parents to provide a safe environment for students in the unfortunate event of a strike. MR. WIGET said in terms of the Totem strike that happened last January, the district notified parents as soon as the district became aware of it. The parents in Anchorage watched the 10 p.m. news, but no indication was given then that a strike would be called. At approximately 10:40 that evening, the district received a call; that was after the news that the parents and community were watching to find out the status of the next day's activities. The district respects the right to strike and believes that this law does not provide an unfair advantage in labor negotiations. The district is not seeking an unfair advantage. However, children should not be placed in an unsafe situation, and the parents should have the opportunity to find alternate means for their children; many parents work and arrangements need to be made. Number 1723 REPRESENTATIVE BRICE asked: If child safety is the issue, then why doesn't the school district negotiate in good faith with its employees and make the appropriate preparations just in case? MR. WIGET replied that is making an assumption that the school district doesn't. Number 1700 REPRESENTATIVE KEMPLEN asked Mr. Wiget why a three-day notice is needed. MR. WIGET said in discussions with the administration, that group felt three days would provide fair and adequate notice for parents to make alternative arrangements. REPRESENTATIVE BRICE asked if those discussions include school district employees that are represented by collective bargaining organizations. MR. WIGET said the discussion was held by the administration. Number 1641 CARL ROSE, Executive Director, Alaska Association for School Boards (AASB), came forward to testify in support of HB 224. The AASB has had a position on this for over five years. He was a school board member in 1974 when the issue then was "meet and confer" laws, and there was no finality. He shared some history about the "meet and confer" laws and binding arbitration. Somewhere in between those two resulted the legal right to strike. The legal right to strike has been successful in many cases in bringing the pressure that was required to get the agreements finalized. MR. ROSE noted that the job action may be between labor and management dealing with salary and benefits. He said, "I don't believe, and I don't think anyone here will say, that you're striking the community or you're striking students. I believe you're striking the school district." With 72 hours as the ultimatum, the public pressure will be brought to bear in 72 hours for an agreement, or there will be consequences. He believes it will be good for communities, and it's good for children because parents and schools can prepare for their safety. The pressure is on the people at the table to come up with an agreement, or consequences will be recognized. His counterproposal is that school districts should be given a 72- hour notice of implementation of contract if they can't meet in agreement. He is concerned about the issue of public confidence. Number 1458 JOHN CYR, President, National Education of Alaska (NEA)-Alaska, came forward to testify. He shared some history of negotiations. He referred to the question about the health and safety of children; if it were about the health and safety of children, school districts would make those kinds of accommodations a long time before that final hour. If school districts were concerned about the health and safety of children, they wouldn't be hearing about "we'll give you 72 hours before we implement." He stated: What we would be hearing is if there's a strike, then we're real concerned, and we'll agree to keep the schools closed until the strike is settled. I may be paranoid, but I've watched too many strikes, and I've watched too many school districts enter into situations where they try to hire replacement workers. This is about strike breaking. This is about tilting the playing field. I don't think that's fair. We have a system that works. That's what this is about. This is punitive. It's about punishing one group, that quite frankly, they [NEA-Alaska] don't even represent, but they [support staff] are folks who work in schools. And if this happens here, it will happen in other places. I just don't think we need to do this. This is a bill whose timing is poor, that changes the way the game is played. If we're going to change the way the game is played, then I would suggest that we look at some amendments, [that] we look at keeping schools closed if there is a strike, to keep students safe. If we don't want to do that, I would suggest that we move those folks who work in the schools in the same classification as other public employees whose services are too important to have them go out on strike and give us binding arbitration. There are some ways to handle this if there is legitimate concern. But I don't think that is what this is about. Number 1237 REPRESENTATIVE BRICE asked Mr. Cyr if the replacement workers generally meet the qualifications of the striking workers. He would expect that bringing on replacement workers would cause a greater child safety issue than the proposal that has been put forth. MR. CYR answered that there is no way that a school district can hire replacement workers who are as qualified as those people who are in the classroom. The school district is hiring warm bodies without any checks, or they are going out of state to find qualified people. REPRESENTATIVE GREEN asked Mr. Cyr when the schools would be shut down. MR. CYR said if the school district wishes the union to give notice, the union would have no objection to giving notice if the school districts will agree that they won't use that period of time to hire replacement workers. The schools would remain closed for the period of the strike to keep the students safe. Number 1118 REPRESENTATIVE KEMPLEN asked Mr. Cyr about giving notice only 24 hours before the strike begins. MR. CYR said the union sees no need to give notice. He would prefer 24 hours to three days. He doesn't know why the school district needs it at all if they do a good job of informing their constituents. Recently, in Ketchikan, the union just went out on strike, and the district was told on Friday if there wasn't a contract settled by Monday, the members would be on the street. The district agreed to close the schools and then late Sunday evening announced that the schools would be open. The district put the students in the same kind of position that Anchorage accuses the Totem union of doing. Neither situation is right. Number 0986 CHAIRMAN DYSON noted that he has learned some new perspectives. He said: When you had said before that this bill would tilt the game, all I could think of was you were saying in order for the bargaining unit to prevail, the public has to have a lot of discomfort and because of their discomfort put a lot of pressure on the administration to either come to the table or agree. Now I'm not so sure that you're against this bill just because it decreases the public discomfort. MR. CYR answered: Quite honestly, anytime there is a strike, there is a failure on both sides. Any union that leads its folks out into the street has done a disservice to the folks it serves. It happens. Unfortunately, because we are public employees and we work with kids and in schools, it is markedly different than shutting down the coal mine, if you will. If there was some other way to do it, it would certainly meet my needs. Number 0896 DARROLL HARGRAVES, Executive Director, Alaska Council of School Administrators, came forward to testify in support of HB 224. He also shared some strike history. The ACSA supports this bill to protect the children and to protect the teachers from negative public relations if notice isn't given. Number 0760 REPRESENTATIVE COGHILL noted that the parents are not really a part of the long process of negotiation. He asked Mr. Hargraves if he viewed this as a way to involve parents in the process. MR. HARGRAVES said that could be a fallout result, but that is not what he is after. If the school district starts considering a lockout or implementing other types of actions, then they also need to make the announcement to the unions. CHAIRMAN DYSON asked Mr. Hargraves if the three days' notice would primarily be a time to increase pressure to get back to the table and solve the problems, or would it be as Mr. Cyr suggests, a time for the school district to hire replacement workers in order to break the strike and break the union.  Number 0645 MR. HARGRAVES said he believes districts could use it both ways. The pressure that the district can bring against the teachers' union is not his concern. He is advocating for advanced notice. CHAIRMAN DYSON announced that the committee would take an at-ease to figure out what would be the best course of action to take that would address everyone's concerns. The committee took an at-ease from 5:32 p.m. to 5:40 p.m. Number 0539 REPRESENTATIVE GREEN made a motion to adopt Amendment 1, which changes page 2, line 28, from "three days" to "24 hours". CHAIRMAN DYSON asked whether there was any objection. There being none, Amendment 1 was adopted. Number 0430 REPRESENTATIVE GREEN made a motion to move HB 224, as amended, from committee with individual recommendations and attached fiscal note. REPRESENTATIVE BRICE objected. A roll call vote was taken. Representatives Kemplen, Coghill, Green and Dyson voted in favor of moving the bill. Representative Brice voted against it. Representatives Morgan and Whitaker were absent. Therefore, CSHB 224(HES) moved from the House Health, Education and Social Services Committee by a vote of 4-1. HB 260 - MEDICAL ASSISTANCE PROGRAM COVERAGE Number 0280 CHAIRMAN DYSON announced the next order of business as House Bill No. 260, "An Act relating to coverage of children and pregnant women under the medical assistance program; and providing for an effective date." Number 0262 KAREN PERDUE, Commissioner, Department of Health & Social Services, came forward to testify in opposition to HB 260. She informed the committee the Denali KidCare program will reach its first birthday March 1. The legislature enacted the program about two years ago, and it has only operated for one full year; that is a pretty short time to talk about changing it. Denali KidCare offers more children in working families health care coverage, it covers pregnant women, and it is a streamlined way of government doing business in signing up children. If the coverage went away today, approximately 7,000 children and about 800 pregnant women would lose their coverage. The program has turned out to be cheaper than the department thought. It roughly costs the state around $472 in general funds a year, about $40 per month. COMMISSIONER PERDUE informed the committee the federal government is paying 72 cents on the dollar for this service, and this program is authorized for ten years. The state is only in the second year of the program, and the state part of Denali KidCare is financed through savings in changing the Medicaid match. Money was freed up for use toward more health care coverage. If HB 260 were to pass, Alaska would be the only state in the nation without a child health insurance program. She discovered in talking to private insurers and business people, there is a hole in the market. TAPE 00-15, SIDE A Number 0011 COMMISSIONER PERDUE explained the national Child Health Insurance Program was launched to provide health insurance access for the person working in small business or part-time who didn't have coverage. Alaska has a more extensive problem because many more people are either self-employed or are in very small businesses. She has not heard of a private sector solution that would meet this need for insurance. She concluded by expressing her opposition to HB 260. CHAIRMAN DYSON asked how reducing the qualifying level from 200 percent down to 133 percent makes Alaska a state without a child health insurance program. Number 0154 NANCY WELLER, Medical Assistance Administrator, Division of Medical Assistance, Department of Health & Social Services, came forward to explain. Under federal law, children up to the age of six are required to be covered at 133 percent of the federal poverty level. Children over the age of six up to the age of 18 are being phased in one year at a time to 100 percent of the federal poverty level which is the mandatory level for those children 6-18. The 16 year old children are now being phased in this year and in two years mandatory coverage at 100 percent of the federal poverty level for children up to age 18 will be complete. Therefore the child health insurance program would only include children ages 6-18 at the 133 percent level under the proposed committee substitute. The new fiscal note shows only 2,738 children would retain coverage on the Child Health Insurance Program of the 7,000 expansion children that are currently covered under Denali KidCare. Number 0257 CHAIRMAN DYSON asked if it was accurate to say if this bill were to pass in its present amended form, there would be an insurance program in Alaska that continued at the level that the federal government had before, so there is still a program going on, there just isn't the supplementary coverage provided by the state in Denali KidCare. COMMISSIONER PERDUE replied that she didn't know if that would be accurate. She said Alaska's state health insurance program would be the puniest in the nation, and all the pregnant women would lose their coverage. REPRESENTATIVE GREEN asked Commissioner Perdue if that would put many unborn babies at risk if they were no longer covered. Number 0374 COMMISSIONER PERDUE replied absolutely. At any one time about 1000 pregnancies were covered, and many of the pregnant women now covered were foregoing prenatal care until later in their pregnancies. She believes prenatal care is the most cost- effective health care investment anyone can make. REPRESENTATIVE GREEN asked Commissioner Perdue if she thought some of those pregnant women might resort to abortions if they were not covered. COMMISSIONER PERDUE remarked that she can't say what people's personal decisions would be, but lack of coverage gives them less options. She reminded the committee that the year the legislature enacted this law for pregnancy coverage, the public funding for abortion was eliminated. That was part of the discussion at the time. This bill would certainly foreclose every option. REPRESENTATIVE KEMPLEN mention that the Center for Families made a presentation in the Children's Caucus today, and they emphasized it is important to implement prevention services for children because those services are the most cost-effective techniques available. He wanted to confirm that is what Denali KidCare does. Number 0550 COMMISSIONER PERDUE answered it does that, and it also helps with catastrophic events. If people don't have insurance or are only covered for catastrophic coverage, it is often a choice for the family between going for the checkup and getting the last week out of the paycheck. More children show up at the emergency room, which is the most expensive care, because the emergency room takes a credit card; usually people have to write a check at the doctor's office. She emphasized that it is not that parents are irresponsible; it is that they don't necessarily always have the money when the illness arises. COMMISSIONER PERDUE noted the other issue is if people were to try to buy the preventive coverage, the people whose children are very sick would be attracted to the pool because those people really need the coverage. The premiums go up because those people are attracted to the product. That has been the difficulty of having small pools of people in the private insurance settings. Therefore only the catastrophic coverage gets offered. CHAIRMAN DYSON said it was reported to him that a family of four would qualify at the present 200 percent level if their income was under $41,000. With permanent fund dividends (PFD,) the income would be up to $48,000-$49,000. He asked if it was correct that the PFDs were not counted in the income to qualify. Number 0674 MS. WELLER answered that it would depend on when people applied. Coverage is based on the monthly income unless people are seasonally employed in which case the income is annualized. CHAIRMAN DYSON asked if it is the Administration's position that a family with a $48,000 annualized income is the working poor that can't afford health insurance for their children. COMMISSIONER PERDUE answered generally, yes. Those individuals are not thought to be destitute, but the goal is to try to provide access for parents to get health insurance for their children and/or pregnancy and to act responsibly. Sometimes the choice is quitting a job and going back on welfare. In some ways that is the most responsible thing to do if the children need health coverage. The problem is responsible parents cannot access the coverage, and the goal is to try to get as many children as possible covered. CHAIRMAN DYSON asked Commissioner Perdue if it is her position that 200 percent is exactly the right number. COMMISSIONER PERDUE answered it is unfair to count the PFD as extra income because it is not counted for a lot of other things. The decision has been made in this state that the PFD does not disqualify people for things. She believes that 200 percent is a good level. It is a medium level compared to other states. Many states are way above 200 percent in this program. It is not out of line for what is going on in the nation. Number 0873 REPRESENTATIVE COGHILL disagreed that the 200 percent level is where people really become needy. Number 0949 COMMISSIONER PERDUE summarized by saying she does understand the philosophical issue; it was debated two years ago when the legislature passed this bill. She deeply resents the concept that these parents are somehow not responsible. She believes the parents are doing responsible things. She does not believe someone could take a PFD and turn it into health insurance for a child; it would only buy a couple of month's worth of coverage. The message should not be sent out that these parents are somehow not doing right by their children by getting this health coverage or that pregnant women are not somehow doing right by getting this coverage. CHAIRMAN DYSON said if he implied that, it certainly was not his intention. REPRESENTATIVE COGHILL stated that was not his intention. Number 1006 COMMISSIONER PERDUE emphasized that this is not welfare. This is health coverage for children whose families are working, and they cannot access it easily in the private market. REPRESENTATIVE GREEN asked if the threshold is one where someone either is or is not covered, or is it a sliding scale. COMMISSIONER PERDUE answered that it is not a sliding scale. Number 1061 JANICE TOWER, Alaska Chapter of the American Academy of Pediatrics, testified via teleconference from Anchorage. She dittoed Commissioner Perdue's remarks about why this bill should not pass. She testified on behalf of the Alaska Chapter of the American Academy of Pediatrics which is an organization of 63 pediatricians and pediatric sub-specialists from across the state. In 1998, the legislature passed HB 369 by 26-8 and 14-5; that authorized the Denali KidCare program. Representatives Green, Kemplen and Brice each voted in favor of this bill. The legislature is to be congratulated for having passed one of the best bills ever devised for children and expectant moms. MS. TOWER stated that HB 260 is a step backwards to the twentieth century. Since Denali KidCare was launched last March, there has been a 27.6 percent increase in the number of children in the Fairbanks North Star Borough who now have health insurance through this program. Similarly, the Kenai Peninsula Borough can be proud that there's been an increase of 55.3 percent in health insurance enrollments through this program. She pointed this out because she understands that at the last hearing there was testimony from Kenai opposing this program. It is unfathomable that something so successful can be looked upon as undesirable. She sincerely hopes this will be the last that is heard about rescinding this valuable program and that more monumental decisions that benefit children and families will be made this session. Number 1182 LEILA WISE testified via teleconference from Anchorage. She said it sounds like Representative Coghill and other members of the committee believe that Denali KidCare represents some kind of socialized medical program; she doesn't see it that way. One of the ways she looks at it is as a subsidy to business to allow businesses, whether big or small, to pay their employees small amounts of money and fail to provide health insurance. She urged the committee to look at the bill in other ways. It is not just the 28 cents on the dollar that the state provides for health insurance for low income children and pregnant women. MS. WISE stated that anytime pregnant women are covered with health care or deafness in children can be avoided because their ear infections were treated is important. She is interested in preventing incidences of fetal alcohol syndrome or cocaine babies, and she is also interested in mental health care. The dollar investment in preventing and treating mental health issues will prevent greater costs later. The small amount of money paid for this program now is well worth it. Number 1341 GEORGE HIERONYMOUS, Executive Director, Beans' Cafe and Kids' Kitchen, testified via teleconference from Anchorage. The Kids' Kitchen program feeds underprivileged children in Mountain View, Fairview and the Muldoon area. A number of those children are now covered with this program that would not have had coverage before because their parents made over the 100 or 133 percent. By the time a single mother with three children pays for clothes, school costs and everything else, she can't afford to pay for insurance for her children. Bean's Cafe offers insurance for the employees, but if one of the employees want to insure their children, it costs $400 a month, not the $40 a month that the state pays. Not many people making $25,000-$35,000 can afford another $400 a month. MR. HIERONYMOUS noted that preventive care is very important. He sees what happens without the preventive care every day at Bean's Cafe. He can't serve corn on the cob because a number of the people did not have dental care when they were young, nor have dental care now. The children need to have their dental, health and mental problems taken care of early. He opposed HB 260. Number 1423 MICHELLE SCHUMACHER testified via teleconference from Homer. She told the committee that her son was born with a tumor in his head. Had he not been covered by Denali KidCare, she and her husband might have waited to have his head examined. After many tests, it was discovered that the tumor was rapidly growing further into his brain. She is happy to report that her son had surgery and now has a clean bill of health. She and her husband are so thankful for the Denali KidCare program and can't stress that enough. If it weren't for Denali KidCare, her family would presently be seriously in debt. Now she and her husband have health insurance through their jobs. She once again thanked Denali KidCare for the health of her son. She urged the committee to help the children by not passing this bill. Number 1486 LAUREN CARLTON testified via teleconference from Homer. She is pregnant, is on Denali KidCare now and is grateful for the program. She feels strongly that Representative Coghill is missing the whole point of this program. It's not just for the lower income people. This program was to fill a gap that the private sector has not filled even though there has been great economic growth in the country. Yet the private sector hasn't found a way to make insurance available to everyone that needs it other than catastrophic insurance. MS. CARLTON read in the newspaper on February 7, where Representative Coghill states that he doesn't think the government should be the supplier. She would like to know why people pay federal income tax, sales tax or property tax if people don't get something out of it that would really make a difference. The Denali KidCare program is making a huge difference to a lot of people. It is not a handout; it is a way for people to get insurance. An income of $40,000 (prior to taxes taken out and social security) for a single parent who has two or three children is not a lot of money these days in Alaska. She also noted that the federal government has guaranteed this program for ten years. She feels frustrated that all this time and energy is being spent on removing something that is a good thing. Number 1639 RUTHE KNIGHT testified via teleconference from Valdez. She has listened to all the previous testimony, and one thought going through her head is the possibility that many of the children that will need more time on task in school [as a result of failing the benchmarks or high school graduation qualifying exam], wouldn't need more time on task if they had adequate prenatal care. MS. KNIGHT has seen the Denali KidCare program help many families throughout the state of Alaska. It is one of the few pieces of legislation that has really helped the people in Alaska. There are many resource industry families that have never been able to have health insurance for their children, and this last year those families got that. More children are getting preventive care so they don't have to have the treatments they would have had if the prevention hadn't been there. It is way too soon to do anything with the original legislation that was passed in 1998. It needs to run for at least ten years. She believes cost savings will be seen in many difference places that probably haven't even been looked at. She urged the committee not to touch the original legislation, and she opposed HB 260. Number 1752 PATRICIA MACPIKE testified via teleconference from Sitka. She works with emotionally disturbed children and her child is covered by Denali KidCare. It dismays her to be considered part of the working poor because she works very hard with emotionally disturbed children. Some of the people in that field cannot be paid enough. She challenged the committee to work with emotionally disturbed children one day. MS. MACPIKE pointed out that parents who work seasonally have difficulty finding health insurance for their children. Her husband works seasonally for the Alaska Department of Fish & Game; his position has been downsized due to funding cuts. It costs $586 a month for continued coverage of the state insurance during the off season for her husband and daughter. If the deductibles are included, it is quite costly and almost not effective. They just hope no one in the family gets ill. She wondered if the legislators are covered by state health insurance when they are not in session. She noted that the cost of living and the cost of health care are continually increasing. Along side that comes the cost of education. She and her husband both have degrees, and it did not come cheap. They only have one child by choice because between the costs of education and health care, they can only afford one child. She opposes HB 260. [HB 260 was heard and held.] ADJOURNMENT Number 1906 There being no further business before the committee, the House Health, Education and Social Services Committee meeting was adjourned at 6:24 p.m.