I call this meeting in the House Finance Committee to order, let the record reflect that it is 1.32 PM on Wednesday, January 28, 2026.
Present today are Representative Hannon, Representative Moore,
Representative Staff, the three co-chairs, co chair Foster,
co Chair Schrodinger and myself, Co-chair Josephson, also present to our House
Finance committee staff, committee assistant Helen Phillips, page Tallulah LaStofka.
Secretary Brie Wiley and Secretary Leah Frazier.
We also have our moderator, Emily Mesh,
from the Legislative Information Office.
With us also on the panel are Representatives Galvin
and Representative Bynum.
Before we start, please mute your cell phones.
In today's meeting, we will hear the Department of Labor
and Workforce Development give two presentations.
The first is the FY26 Departmental Budget Overview.
Then they will give a two-part presentation on the statewide 2026 jobs forecast and unemployment insurance financing metrics.
If there's time, we will also invite Mr. Painter back to continue his presentation
on The Overview of the Governor's FY27 budget.
With us today, and just so it's clear, if that doesn't happen today that is the completion of Mr Painter's presentation.
with us today from the Department of Labor and Workforce Development to present its overview
is Commissioner Munoz, Dan DiBartolo, the administrative service director,
if the, and by the way it's the FY27 departmental budget overview of course,
if two of you will come forward, we look forward to your presentation.
We've been joined by Representative Thomas Shefsky.
Welcome.
Thank you, Chair Justisson and co-chair Schruggi.
It's nice to be here.
For the record, my name is Kathy Munoz.
I am the Commissioner for the Alaska Department of Labor
and Workforce Development.
And with me is Administrative Services Director,
Dan DiBartolo.
In the audience, we have Lisa Flores, the Budget Manager
for The Department.
We also have Kim Colvig, Legislative Liaison.
And Director of Workers' Compensation, Chuck Collins,
Director Division of Employment and Training Services,
Paloma Harbor.
And then we have Lynn and Weller.
You mentioned earlier is our economist and UI Trust Fund
Actuary.
And Corinne Weebold is an economist
with the Research and Analysis section.
Great.
All right, thank you so much for the opportunity
to be here and to present the budget.
We wanna go ahead and get started.
So the division, the department has seven divisions,
and under the Division of Employment and Training Services
are 14 job centers, which are all over the state,
as you can see from this slide.
We recently opened a satellite job center in Kotzebue.
Under the provision of vocational rehabilitation,
Vocational Rehabilitation Client Service offices.
We also administer federal and state training funding.
We have a nine regional T-VEP recipients.
Those are non-state programs that receive T VEP money.
That's the training vocational education program,
which is funded through a share of the employment security tax.
passed through the department, and we have oversight over those grants.
We also have 37 step grantees that we manage,
the grants for those organizations,
those go to regional training providers around the state.
Step, the State Training and Employment Program is also
funded through a portion of the employment security tax.
And the final state program that we administer the funds for are the construction academy funding
Those go out to nine construction academies around the state and we also
Have the Alaska vocational technical center
Under our umbrella and the abtech is located in Seward
Okay, I was asked to highlight some of the
popular or the accomplishments for FY 2025 and
Some of them will be highlighted in our budget presentation. The first is
Avtech program expansion
We've expanded our industrial electricity
and our plumbing programs at Avtech.
We have also started a new industrial machine
and maintenance program.
Enrollment is strong.
We're above pre-pandemic levels for all of our programs.
And we have waiting lists for our most popular programs,
especially in the industrial
electricity and the plumbing.
areas. We also have a very popular welding program and other really good programs.
We have new director. I think you may have Chairman, you might have met our new Director,
Dr. Corey Ortiz. He's in his first year at Abtech and he's doing very well.
Also, I wanted to mention that of the many awards that Abtech has received just this
last year, it was named as one of
the top vocational technical schools in the country by USA Today, so that was good news.
Another area of success is in
the Occupational Safety and Health Program.
We have started the first of its kind in
This allows us to work through the ACOSH group with businesses that have received
first-time safety violations or first time violations within the previous five years
to make safety improvements to their business and receive a full waiver of any financial penalties.
We believe that this results in safer workplaces and we're doing so in a more collaborative manner.
We've also successfully launched the Office of Citizenship Assistance.
We were happy that you were able to attend chair and representative Foster and
Representative Galvin, thank you for being there.
The first year has been very successful.
We served over 250 legal immigrants with employment and job training services.
been able to connect legal immigrants with digital literacy training and English language,
conversational language training. We can also do credential translation, which helps when
individuals are coming from another jurisdiction and they need help with translating their credentials.
We're able help to help.
And then, this past year, we've been working with the
Administration, the Refugee Support Services Federal
Administration to assume the duties of the refugee agency,
which previously has been handled by Catholic social
services.
Those services will fold under the OCA umbrella moving forward,
and we will discuss that a little bit in our budget today.
And then also in the area of mechanical inspection, we're very pleased with the number of changes at mechanical
inspection in this certificate of fitness program.
This is the program that certifies electricians and plumbers.
We've implemented a number of changes there, including military credit, allowing for military
credit comparable military credits toward licensure.
Reciprocity, we've increased to 30 states across the country where we can accept licensures
from a state that has similar licensur as Alaska.
We have also implemented provisional licensing, which allows us to accept an electrician or
jurisdiction provisionally for up to one year.
This last year are the number of electrical journeymen
issued certificate of witnesses increased by a lot.
We issued 423 certificates.
That was a 133% increase over the previous year
And we've issued this past year 435 electrical trainee licenses.
Also a big jump over the previous year.
Another area that I'd like to give a shout out to is in our workers compensation division.
We have a great collaboration between the Medical Services Review Committee and
medical providers to work to bring the cost of medical services down by publishing
annually and updated medical service list for reimbursement purposes.
The system costs those are premium costs for employers have gone down by approximately 38% since
so we were seeing safer workplaces overall and
Reduction in the cost of medical services by simply having an agreement over published
Services and what the division will reimburse for those services
We also have implemented SB 206, which was a bill carried and sponsored by Senator Gray-Jackson,
which allows us to work proactively to get individuals that have been injured.
That may not be able to go back to their previous type of work, but can get into other maybe lighter work or
Quicker that we found that it you know
It's always much more beneficial if an individual gets back to work soon as soon
as possible after an injury the longer that they're separated from work
The more likely it is that. They will never return to the workplace
So the the reemployment it's called stay at work program has been successful and
Focusing on on getting people back-to-work sooner
Let's see, and then, gosh, did I mention the...
Did I mentioned these?
I did mention the ACOSH program.
So those are some of the highlights, Chairman.
And then moving forward, we're very much focused
on a training proposal that was introduced by the governor,
HB267 and SB217.
That would be a major boost for short-term trainings
and industry recognized training opportunities
around the state, supporting our regional training network,
through the job centers.
We're also updating the 2018 gas line workforce plan,
the most recent plan as I said was 2018.
So we recognize there's been significant changes
and we want it adapted to the current project.
So that is in the works.
We hope to get that report to you by mid to late March
at the latest so that you will have it
for your consideration.
And with that, I will turn it over to Director Dan DeBertolo
and I'm also available for any questions.
Thank you, any question so far for the commissioner?
Oh, our lucky day.
Okay, we'll start with Representative Galvin.
Thank you, co-chair Josephson, through the chair.
Thank so much for being here.
There's always good news coming from your department,
and I love hearing it because I know that means
that our youngest folks are getting
into great opportunities for independence, so thank you.
And I have directed my staff to try something new,
a new approach, and that's to go through
the OMB website around key performance indicators.
And so I do have a question, looking at mostly
incredibly great news but it's something that I didn't get to hear from you about
so I just thought I would ask you I see that for as far as app tech goes which
is one awards I I saw that what you're they're trying to do it standard is to
have at least 60% of students complete the program and it looks like that has
And similarly, around 90% of the long-term graduates
are employed in their area of training.
So I thank you for that.
And I wanted to know if you could share with us
what that means in terms of how many Alaskans that is.
It just gave me the percentages.
So, I thought I would ask if could give me
a bigger picture for what
that mean in term of of
how that many.
Avetak in particular is what this is from in the key indicators.
It says 90%, and I'd like to know what that number looks like then on an annual basis.
Through the chair.
Mr. Chair.
So we we have a number of programs we
have the longer programs which are six months and nine months in of those programs
I think our enrollments about a hundred and twenty students
90% of that yeah, but in addition to that we
have short-term train
trainings that are offered in conjunction through partnerships with employers.
We have our Marytime program, we have a partnership with Trident Seafoods where we train up in some of the off season time.
on campus, but then we bring, you know, they're able to work and then come back to ABTEC over
a period of time. So in total, I think, including all of the short-term trainings,
I would say we're close to about a thousand students,
but we can get that number to you. Well, just that
number is great. If it's close that, that's pretty much all I need.
Thank you so much. I really appreciate it.
Representative Tomaszewski. Thank you, co-chair Josephson through the chair two questions one. I see that
Your federal funding 98 million, which is about 51% of your total budget apparently
I just want to know if that's if if it's increasing decreasing little comments on that and also on your department supports
just for those
Listening and who may not be able to get this information. You have 14 job centers 37 step grantees 9 TVT recipients and 7 construction academies
Do you have a list of those out somewhere that people can look at and see and find out more information on those?
Commissioner
Thank You chair a List of the recipients of Those grants is
Specifically or a List of all of The Trainers Around the state absolutely both both okay
Yes, we do have that for you, and I I would say for the public we have
An approved an eligible training provider list which can be found on the website on The Department of Labor's website
That lists all of the program short-term trainings around the state connected to specific schools and and training centers
But in addition to that I'll get you a list of our stiff recent step recipients and our TVIP recipients
And follow up yes follow in the federal funding
And the Fed, do you want to take on that question?
Mr. Deapertolo.
For the record, my name's Dan Deabartolo,
I'm the Admin Services Director for the Department of Labor.
Representative Tamashowski, through the chair,
our federal funding, when we get into my portion
of the presentation in the last few years,
we're up about 4% overall.
But I want you to note that that is an authority bucket.
We don't necessarily realize the full amount
that we are actually authorized for.
And if you'd like to see actuals that
we've spent in that federal authority as opposed to what
we have in the budget for authority,
I could get you a breakdown for that,
if that would be helpful.
Yes, thank you. And one quick follow-up. Yes follow up. So you mentioned Trident specifically
just a moment ago in your talk. Do you get private donations to help out with the training? And
how does that work exactly for a private company to be able to donate to your cause of training
Mayor time and all those positions. Commissioner. Yeah, and in that example
Yes, Trident pays for that program and then sends a certain number of students every year and it's a multi-year program
Then in addition to that we receive tax
donation or tax deductible donations from businesses to our to
Our training programs and those are used in a variety of different ways
Representative, staff that hand in.
Yeah, thank you, Coach, you're just,
most of my questions are gonna revolve
around step and TVEP, and I don't know
if you would like me just to hold to the end
of the presentation, I'll see you placing the slide deck
that kind of fits those through the chair.
I think they look willing and able, so let's, okay.
Through the Chair to Commissioner,
thank ya, Co-Chair.
So I guess first question is,
I know we haven't gotten here a little disappointed.
I, know, we were talking a lot about A-Calangy,
Workforce development is a big challenge.
I don't see anything movement in this proposal regarding gearing up for the workforce development
challenges that we're going to need to fulfill those jobs in the event that end up coming
with this project which hopefully will be very shortly.
and I specifically with the step grants
to the Fairbanks Pipeline Training Center, right?
So obviously there's appropriation for T-VIP in there.
Used to also receive STEP.
I don't see us at the fairbanks pipeline training center
as a STEP grant recipient.
And my concern is, hey, like if we're serious about
AKLNG, we are not devoting resources
to The Pipeline training Center
which you would think that that would be like
the number one place in parity
most of our work portion of the pipeline.
I just wanted to get your thoughts on that through the chair.
Thank you, Chair.
The Fairbanks Pipeline Training Center
is a wonderful facility, and they provide fantastic training,
short-term trainings, in welding,
and a variety of different things.
And they were added to the T-VIP.
program as you know last year. We have a very limited step pool overall. I mean we I
mean limited it's about six and six-and-a-half million total that goes out to
competitive grants.
We
have
a proposal that you will have an opportunity to consider
to significantly increase that funding that source of funding.
And our hope is that that money will go to support programs like the Fairbanks Pipeline Training Center and
also to provide individual training support through our job centers for individuals interested in getting short-term training.
Follow Mr. Carter. So
Specifically regarding the step grants right because we used to be a recipient
Fairbanks pipeline training center used to be a pretty hefty recipient of step grants,
and that's kind of been a recent change when we made the changes to TVAP.
And again, my concern is I see the change that you're doing for the stepgrants,
but there's nothing in there that I say that we have any say over the participants
of the grants.
I saw the funding increase, but I don't see that participants.
Again, Mike, the biggest concern, is if we had AKL and G on the horizon.
We're not really putting a lot of resources.
And I love all these programs, they're all good.
But again, we have this project is on the horizon.
We have a very serious workforce challenge
that we need to target the vast majority of our resources
into this, specifically pipeline training,
those types of trade jobs.
Otherwise, you know,
we're gonna
Perhaps miss out on capitalizing on a great opportunity right through the chair and through
the Chair we can look at the numbers
But I believe pipeline training center through TVP received over 1.5 million and their previous
Step Grant was 400,000 so they increased by over a 1,2 million for training in one year
And again, we have limited funds and we're trying to make sure that programs around the state are benefiting and individuals around
the State are benefitting from that source of funding.
We do have a major proposal that we are pushing through the legislature, and
we would love to talk to you about it that will help programs continue to help and
subsidize programs like the Fairbanks Pipeline Training Center.
And in addition to that, Chair, if I may.
Senator Stevens put, Senator Ted Stevens, put an appropriation in many years ago for the
Pipeline Training Center of $20 million contingent on a final investment decision.
And we're at that point, we are pretty close to that
point where the US Secretary of Labor can release those funds once we have the final green
light on that project.
And those fund would go directly to the Fairbanks Pipeline training center as well.
Thank you. Thank You
That's fantastic news. I was unaware of that
Commissioner I'm gonna go to the other members here, but but
In the gas line caucus that I attended in August that you presented it and your team presented
Even though we want to do all we can for current Alaska residents
I remember the number of something like 10,000 workers needed for the entire pipeline project
We just don't have that capacity and I think folks need to not saying no one in this room is aware of that
But there are going to be a lot of people moving here, and that's just sort of a fact. Is that true?
Chairman, thank you
I first of all and foremost our main focus is on getting Alaskans trained and
employed with the opportunities economic opportunities on the horizon
But yes, we recognize that we will need to import some labor for that work.
And as such, as I mentioned earlier,
we're looking at our policies to make sure that there's no barriers in our certification process.
at the Department of Labor.
So, particularly related, excuse me,
to electricians and plumbers,
because we have purview over certification
of those professions.
We have done a number of things
to encourage easier certification
for qualified workers to work in Alaska.
Great, all right, we'll go to Representative Hannon
and then Gelman.
Thank you, Coach here, Josephson.
Commissioner, thank you.
And I'm going to return to ABTEC and I know that in your presentation of it you're talking about expanded popular programs
But I want to just end you called out industrial electricians and industrial plumbers, but AB TEC still does residential
Can you confirm that they still produce residential plumber and residential electrician certifications?
Thank you chair. So a plumbing pathway for certification is
4000 hours for
residential and 8,000 for commercial and we the training provided at abtech is equal to one year of a full
Apprenticeship so gentle whether it's it the four-year apprenticeship whether they're going for 4,00 or 8 thousand hours
The ab tech portion can equate to 1 year that training
I'm just affirming that my nephew who is an abtech alumni and working in it is doing
all that he can and earning all the money he has and he's busy every day.
Good.
Yeah.
You know, Chair, thank you.
Thank you very much for that.
We're very proud of the work that's happening up at Abtech and would encourage all of you
if you haven't been out there to visit.
It's truly inspiring.
We have great teachers.
So they're experts in their field coming in,
usually toward the end of their careers,
and wanting to give back.
And they do a great job up there.
Thank you.
Representative Galvin.
Thank You, co-chair Josephson.
My understanding is this year, FY27,
that governor is requesting to move the STEP program
from the numbers section.
to the language section, and then this would also allow for additional funding without any legislative action.
And so these, my understanding is that these requests then will result in a net increment of just over $800,000.
And then also the governor is additionally requesting $1.4 million to maintain the workers' comp.
operations part. My question is, not understanding how your department works, is this because
you're looking for more flexibility and how these dollars are spent? Is it because you
need to be able to move dollars quicker or I'm just not sure what the intent is and if
you could explain that. Absolutely. Through the chair, thank you. So quarterly we have
reports and our UI actuary can speak to this, but we get estimations on what our tax revenue will be coming in through the employment security tax program.
And because of fluctuations in the economy and the unemployment rate and wages, growth
in wages etc., that amount can grow more than what we anticipated in a year.
So when that happens, we would like to be able to have the flexibility to then get that
money out on the street to the training provider so that moral ask-ins are benefiting from
those dollars.
Follow-up.
Thank you.
Have you found that you are not presently or in the recent past been able to cover what
your needs are and there's been a need for the additional funds?
Is that kind of the basis or foundation for that then, that if there were funds you would
Yes, yes. Thank you chair. We have many more requests for the funding applications for
competitive grants and also requests
for individual training support through our job centers. Then we have funding available.
Thank You.
All right. Representative Bynum.
Thank
you co-chair justice and through the chair first of all appreciate you guys and what you do. I
What we're doing here, and I want to see absolutely more of it. Some of the questions I have I'm gonna wait until we go through the subcommittee process
They'll be very similar to the same questions. I asked last year really talking about pipeline development going through from our K-12
System and into these training opportunities, but specifically earlier you'd mentioned
People being able to donate and get these tax deductions
have you guys looked at trying to figure out a way to leverage the new program that the governor
has opted us into through the scholarship granting organizations and how we might be able to
leverage that particular program for this purpose? Commissioner.
Thank you, Chair. I'm most familiar with the educational tax credit program as it currently
been the beneficiary of those opportunities at ABTEC.
I know the university also receives educational tax credit
donations as well, but speaking to the new proposal
that you referenced, I would have to go back
and do my homework before I could answer that question.
I think there's maybe a tremendous opportunity out there for us. It's new, so I wouldn't expect
that you would already have something lined up, but that would have been really impressive.
So, appreciate that. And then my second question really revolves around,
you're aware of the ADA, actually, it just entered into a new agreement in southeast
down in my area. Specifically, ADA had been working at our shipyard,
It's a state-owned facility, and having work development, creating jobs has been a priority
for that facility.
And recently, we have a new operator that came in and they're JAG Marine group,
and, they are making tremendous opportunities for growth in jobs.
But with that is a need for a growth in employees, and so ADA has recently entered into an agreement
not only with JAG, Marine Group, but with Generation Southeast Vocational Center.
And they are here in Juneau and also on Prince of Wales to create that pipeline of how do
we make sure we're getting skilled work.
With agreements like that, are you guys working to see more opportunities where we're aligning specifically with these types of trades to have partnerships?
Yes.
Fisher.
Thank you.
A couple of thoughts on that.
First of all, we have the maritime partnership between ABTEC and the University of Alaska, Southeast, which is very.
It's been named as a maritime center of excellence, training excellence by the U.S. Department
of Transportation.
So there are great opportunities for Alaskans in state to get excellent maritime training
through the university and through Avetec.
And then in addition to that, we are working, I was just down at Prince of Wales Island
with the director of ABTEC and we're working with Rob Edwardson, the
director there, on articulation agreements that will allow individuals
that have completed a program at Prince of Wales and to articulate into ABtEC so
that they have a continuance of their education so that
they can advance quicker. Yeah, thank you very much. Just a big kudos to
all the people involved with that, with ADA.
I know Randy Guerrero has been doing a phenomenal job
and making sure that those things are thriving
in our community.
And I now there's opportunities throughout the state.
So it's very exciting.
I'm glad that they're having those working partnerships.
And then also, generations Alaska,
they've been a tremendous team.
So I appreciate all of the things you guys are doing
to make sure we're gonna continue doing those positive things.
our fellow Southeastern that we are so happy
that the shipyard is up and running
and has a new operator.
It was something that were watching very closely
and really pleased with that outcome.
Great, let's move forward to slide four.
Is this?
All right.
No, I'm fine right here, Commissioner, that's fine.
Thank you again for the record. My name is Dan DiBartolo, the administrative services director
and co-chair Josephson in considering time for our other presentation. So I might go to a little
quicker clip here. Please just...
Slowing me down for questions as we go if that works.
We can handle it.
OK.
OK, mostly.
All right.
So first of all, on this slide, I will mention,
as an organization, we are structured in actually six
major divisions.
They're already you.
I know the commissioner mentioned seven earlier,
and I think sometimes that's because we
conflate our Alaska Workforce Investment Board as a division.
They are actually part of the Commissioner's Office
and Administrative Services Division.
And I'll have some more detail on that in an upcoming slide.
But, in this slide, you're seeing our budget as a function of our mission, and quite simply that's to provide all Alaskans safe and legal working conditions and advanced opportunities for employment.
And 10% of the budget in the green section you'll see is primarily for leadership and support.
That is my division administrative services, fiscal functions, HR, that kind of thing, the commissioner's office.
And you're going to hear us from some of those fine folks in just a bit.
And then in the next section here in Orange, that is for protect workers.
We have worker safety licensing and compensation functions there.
That represents about 15% of our FY27 request.
In purple, about 18% are budget.
only in insurance and disability determinations.
And finally, the largest portion of our budget in blue belongs to workforce development.
That is vocational rehabilitation services, our job centers, technical
vocation education programs and SOARD, and then our training grants to individuals and
organizations throughout the state.
And that's all covered by this portion in our Budget, in which represents about 57%.
Okay, let's go to slide five, all right.
So, my intent with this slide is to give you a FY26 implementation status.
So let's talk a little bit about first about AFTEC and what we'd already mentioned and
that is the expansion of the Industrial Electricity Program.
and our plumbing programs. Last year, the legislature granted us a supplemental in the
amount of 660,000 and an increment in 182, 000. The supplemental,
the reason we asked to accelerate that is because the goal was to expand our industrial
electricity lab from 15 seats to 30 seats. And to order that equipment, get it in and
expand that space was going to take some time. So we appreciate the legislation was able to give
and I can confirm that we made all those purchases.
And if I could just coat your doses
and jump ahead one slide, I'd like to show you a picture.
And then I'll come back to this slide.
Just direct us.
All right, so I think pictures tell great stories here.
So in the upper left-hand corner,
what you see is the building that is our target building.
for the expanded industrial electricity program.
Funding that we're using is currently remodeling
in the right-hand side, that space inside that building.
It is not fully ready for The Labs yet.
We've been working on it this year.
There are some delays in getting that space finished, but we are moving.
What you see in the center of the page here is actually our temporary home of
the Industrial Electricity Lab.
So we've received that expanded equipment, and what we're using is the additional heavy
diesel space we have in Sword.
And right now, we�re conducting our labs in this space here.
And so eventually,
we will move out of this center section here and into that new building that we
As the commissioner mentioned earlier,
we have high demand, particularly for the industrial
electricity program, and so we're very proud
about where we are going with that overall.
And then I wanna mention here on item number,
oops, excuse me, I'm gonna pop back.
Item number three for
the Alaska Workforce Investment Board.
Earlier, the Commissioner mentioned
refugee support services,
excuse, me.
So Catholic Community Services has been administering these funds for quite some time and the current federal administration came in and said listen, we want this to be a state responsibility.
You can still partner with Catholic community services, but we'd like the funds to come through a State entity.
But the funding has not come through yet.
Some of that has to do with what's going on in the
machinations at the federal level of budgeting.
When that funding does come in, we'll be required to
do an annual report and work with our partners on
helping refugees that benefit from those funds.
And we were also asked to mention some of our items that were not funded last year.
And so I'd like to speak to first the Alaska Safety Advisory Program,
which was formerly called ASAC, ASIC, or the LASCA Safety advisory council.
So labor standards and safety.
Their involvement with ASAC used to be largely helping put
on the Governor's Health and Safety Conference.
And then they had volunteer private sector partners
and individuals who would help do some
of the roles associated with the Alaska Advisory Safety Council.
Through the governor's executive order 135,
we were asked to stand up ASAP and those duties were put
into labor standards and safety.
They said, we need you to do this work.
And we came to the legislature based on the time and the effort we believe that would take.
And, we asked for 290,000 to support two positions to run not only those new functions under the executive order,
but also the governor's health and safety conference.
That was unfunded, so, or not unfun, excuse me, it was not funded.
Basically, the division has said what they've had to focus on is just the governor's health
and safety conferences.
They collect fees from vendors to run that conference.
We can't let that money go unspent.
But the other functions, they just lack the capacity right now to do that in the EO.
And so that is where we are on that item.
So does this request come back in FY27?
Okay, and so that's where we're at.
Okay.
Okay yes.
So the next item was for also for labor standards and safety was the mechanical inspection.
So at the end of May 2024, when the legislature was wrapping up,
we had two bills in particular.
In this case SB 204 was rolled up with a number of other bills after conference committee had already completed its work on the budget.
of this mechanical inspection support for the certificate of fitness program and we asked
for that 58,000 last year and that was not approved.
As the commissioner mentioned, certificate fitness is moving forward but as we modernize
our systems, those gaps in funding and reduction in collecting of fees is making a little bit
Can I just clarify for that on that point?
So the legislation that Director references
took on the training certificate from two years to six years.
Because what we were running into is occasionally,
more often than we liked, an individual
would come to us with their training hours
ready to sit for the journeyman test.
But we couldn't take those hours that
had occurred on a lapsed certificate of fitness.
So we thought well one solution would be to take it from two years to six years and that way we don't run into this
Situation where people are lapsing a certificate a trainee
And that but in doing that then we lost that revenue, right because we weren't getting that the every two-year
Certificate it was just a one six year. Okay. Thank you. That's all
Reficent and Hannah has a question.
Thank You chair, Josephson. So commissioner
How has that impacted?
Keeping our mechanical inspectors certified to work without that 58,000 have we slowed down the number of certificates we're giving or are there people who are still pending or
You've been able to cover it with money from somewhere else.
I would say they're very busy.
They are extremely busy.
I mean, our COF, as I mentioned earlier, way up,
we've issued over 400 journeyman certificates this year
and over last year and
over four hundred trainees certificates.
It's a busy shop.
So, and they're running on a shoestring, yes.
Follow-up, Representative Hannon.
Thank you, Chair Josephson and Commissioner,
as you know, most of our professional licensure programs.
intentional by design eventually pay for themselves, right?
So the nursing board licensures pay
for it, but I was changing that.
This $59,000 gap, is that a permanent gap?
Or will the fees eventually increase
so a six year certificate will pay
for that balance?
Commissioner.
The goal I think in fairness would be
to increase at the journeyman level.
a little, you know, a nominal amount, and I think we could do it and cover this deficit,
this particular, this short coming.
Thank you.
Okay.
And then, Mr. Departolo, the item six.
Yes.
Coach or Joseph in the last item on here deals with the commissioner mentioned the the saw program or stay at work program
Which passed?
Also in May
2024 at the end of that session and that fiscal note for funding the position that was supposed to do that work for getting people back to work
Coming off injury injuries was not funded
We requested that funding last year and it was unfortunately not able to be approved workers comp
We have some bigger issues to talk about overall on the next a few slides
but they are operating at a 30% vacancy rate.
They're covering that work as best they can,
but it is a difficult situation for them.
Okay, so we'll skip past six,
because we've touched that, we're going to seven.
And I'll...
I'll keep this brief, this represents our six major divisions are already used here for our budgets.
Of note, we like to point out that, if you look at blue in each of these pie graphs, our total reliance on UGF is fairly low as compared to the rest of the departments in the state of Alaska.
I think we're fourth overall now, and for FY27 we actually have a one-time item request I'm going to cover on a future slide here.
that raises that for workers compensation.
But as a total percentage of our budget for FY27,
FED comes in at 50.5% DGF at 27.50%,
UGF of 13% and other is 9%.
Alright, seeing a question, slide eight.
Alright and this is just another way to look at our, that same
Here co-chair Joseph and excuse me, Joseph, and we are
Our major changes we could mention during this period
between FY 25 authorized and FY 27 governor
is largely the UGF I mentioned,
which we're asking as a one-time item,
but most of our increases here are represented
by contractual salary increases and health benefit changes
and then of course the change to the TVAP program,
which increased our DGF during that time for that program.
Okay.
Okay, and that will bring us then to slide nine and our requests for FY 27
Just a note to the committee of the statewide items that are dealing with the
IT
Reclassification and the transferring of positions out of DOA are not
represented here since these are just specifically our request from the department
So, number one and number, one A and one B, excuse me, I related.
As we mentioned earlier, we're talking about the state training and employment program
appropriation to the language.
Having it in language means if we have training providers late in the fiscal year that need funds
And it's step being a competitive grant program
We don't get just to direct that money anywhere we want and we
Have people have applied and were not awarded funds language allows us to go to OMB and said
Lenin will or come to us there are our actuarians say yes, you have
approximately
900,000 or 1.1 million additional in step
They will, we will ask OMB for that adjustment in language.
They can give us that authority and we can get those funds
in the street as soon as possible.
That has now worked well for us for T-VEP
and that is what we're asking for here.
One note on a step between these two components
and one A workforce investment board, as I mentioned,
is competitive grants to organizations
and then workforce services
within division of employment and training services.
Those are grants for individuals.
On item two, this is our single largest department
ask this year for the FY 27 budget,
and that's the workers' compensation.
We are looking to shore up Whiska,
and Whyska is the worker's safety
and administration compensation account.
It's a mouthful, pardon me.
Typically, workers compensation is 99% funded.
by this fund source.
And its funds are generated by employer workers
compensation insurance premiums, and we get 2.7%
of those premiums that are redirected into this budget
to run workers compensation.
But here's what happens.
Over the time that the commissioner was mentioning,
we have gotten safer as a state, premiums have dropped.
Hence, when premiums go down that percentage goes down and there's at the same amount of
time we have contractual with gated salary increases, we had a salary study for hearing
officers that really drove up our personal services cost, but our revenue has been dropping.
So it's a paradox.
You've done a good job.
You get less money.
And so what we're asking, at least while we try to figure this out structurally is for FY27 is to have 1.4 million UGF increment to cover operations, so we don't have to
have a 30% vacancy rate next year.
Okay.
Representative Galvin for the Director.
Thank you.
Yes, this is the director.
Thank You.
Chair Joseph sends through the chair.
Director, when I see the word maintain.
and then connected to one-time increment,
that's rough for me to kind of get my head wrapped around.
I heard what you said, that insurance premiums have dropped
and because you've done a great job with regard to safety,
but unless you think they're going to rise up again,
I don't know how this could...
be one time I think that there will always as long as you unless you think these are
one-time projects maybe your salary study isn't going to happen again or I'm not if
you could fill me in and give me even more color I
think it would be helpful so that we can appreciate the one
time increment piece yeah that's that to me is helpful director yes representative
So we have a few options here.
And first of all, the one time increment, I would say,
gives us an opportunity to kind of workshop our options
here, as we're looking forward on this.
Because there's two ways.
You find a way to increase your revenue.
Right, currently that's fixed in statute, or you ask for an increment instead of a one-time
increment for UGF and perpetuity in the current environment, we know that is challenging.
So we chose not to ask it for it as an ongoing increment in hopes that we can find the best
path forward.
Follow-up.
Thank you.
I don't see it here, but maybe I missed it.
for that particular, the Whiska work.
So I guess, yeah, that the account
and how it previously was spent out.
And then what we can anticipate in this coming year,
you said, I think, a 30% reduction vacancy rate.
So imagine you were able to float funds that way somewhat.
that doesn't really answer 1.4 million dollars.
So again, more color or at least more details
on how you anticipate spending that 1,4,000,
I think might be helpful.
Oh, and Representative Galvin threw the chair.
One thing I should mention is that back in 2021,
we had a balanced, approximately 2.2 million
usually returned to Whiska via the process we called the reverse sweep.
Once those funds were swept, we no longer had a buffer in our account.
And so the idea here was, instead of asking for the entire 2.2 back as a one-time item,
we looked at what our likely costs would be in FY27,
and we asked for a portion of that back to cover operations,
knowing that we could be at least healthy through FY 27.
Follow-up if I may I think again if you would if
You have some idea of a budget with what you're going to do with that 1.4 million
I
Think that would help
Well, this subcommittee would probably pick that up
But I just think that to help all of us down the road when we
want to be supportive of your work and you just want
to make sure we are asking you for a little bit more detail.
So I think Director that the 1.4 is used broadly just
to maintain the division.
Yes. Right.
That's correct.
It's just to keep the lights on and your employees paid
and the commission functioning and all those sorts of things.
Chair Josephson, that is correct.
This is going to cover basic operations,
and that includes largely as with many
state agencies payroll.
We'd love to get our positions hired
and pay individuals for hearings,
the related support.
There's a lot that goes on there.
So I see.
Chairman.
We can get a budget breakdown for the workers comp division for you and how these particular funds will be used
Specifically, but as the director said and the whisk of fund was swept a couple of years ago
And the funding was not returned so that created a whole in that divisions budget
And we were able to float it for a year,
But we can't do it this year. We need this money and able pay the services of that division
So for decades after the CBR was created we had this reverse sweep vote and at 12 a.m.
On the 1st of July the money went back and about four or five years ago
That just broke down. I could I have an opinion as to why but it just broken down
Thank you for that context sure and I had a bill on this issue designed
identified it and designed to
Increase the compensation premium
and basically increase DGF in that way.
Briefs of the step.
Thank you, Chair, Justin, through the Chair.
So can you explain to me, is we are moving the STIP
or STEP grant appropriation in the language section
of budget through The Chair?
And is that because of
the multi-year nature of The Grant Money or?
Commissioner.
It is because the fluctuation and revenue received to the department based on tax revenue
You know, we may project that we're going to get a certain amount, but when that quarter is
Accounted for we maybe getting additional revenue because of changes in economy
Unemployment, you know changes and wages, etc
Follow-up then coach your Justin to The Chair to Commissioner
How do you choose a step grant awardees?
The Alaska Workforce Investment Board reviews applications. It's a competitive grant process. The maximum amount awarded is 400,000 in the current framework.
We have, was it 27 grantees this year? I think I'm pretty sure it's 27 this
year, but it said it is a process through the Alaska workforce investment board.
No, no sir.
It moved.
No.
No?
Represent Hannon.
Thank you, co-chair Josephson, commissioner, and Mr. DiBartello.
I want to return to the workers' compensation.
First question, 30% vacancy.
How many positions is that?
I don't know whether.
There's five or 500.
I know there's not 500, pardon me.
Direct a representative hand into the chair.
I look back for a lifeline.
Currently 13 positions, so that's 13 that are through the chair 13. That are vacant, okay? That is correct. Okay
follow-up. Yes follow up represent handed for the director or the commissioner
I remember my recollection of the sweep problem in 21 was that several funds that had never been considered
sweepable before were suddenly swept and then by 22 we had some no new OMB and
ledge
Fiscal agreements about yes, these funds aren't sweepable is
The whisk of fun now in the list of that's not really a sweep-able fund because these are collected from the payers
It's it's NOT isn't whisking not ugf. It is payment that is made out of
employer
plain workers compensation
director
Representative Hannon through the chariots considered a DGF fund and so we received those funds and are allowed to spend them up to our
allocation, however, the discussion or determination about whether a fund was sweepable
Was something that occurred between Department of Law and the Office of Management and Budget
And so, we although we may have
Thought it was not a sweep of the fund. It was determined at least at that time that it
Was and at this point it is still sweet
Let me follow up on that, because I was very involved in legislation that got some traction,
but clearly didn't pass, on the reverse sweep, so my office was really studying this issue.
So there are folks who are paying into WISCA, and they're paying a premium tax, essentially.
And then those dollars are going into the CBR at this time that that's happening annually right now
Coach, you're Joseph Sin.
In the event that there was a sweepable balance in Whiska
at the end of the fiscal year, yes, those funds
would be swept.
That largest amount happened approximately five years ago
now.
And then more recently, we did not have sweepball amounts.
We've had to cover workers' compensations operations
this last year with whatever we could
scrape together internally.
that this was sort of a lawsuit waiting to happen because
Why am I a private businessman paying for the CBR?
What's the nexus there? I don't get it.
Representative hannon. Yeah, I have a follow-up and it's along the same lines coach here
Because my recollection is before 21 the whisk of fund was
So healthy that we were discussing increasing our benefits to people who were getting workers compensation because we
were far behind and the rates had not increased in a number of years, but then if the fund got swept, there is no room for increasing benefits out to
2 million that was swept in 21.
We've never restored that money that
was DGF coming from Alaskan businesses
to be held for Alascan employees who are injured on the job.
But through the politics of this weird business,
it just went into the CBR as if it was UGF.
But just to be clear that it's not these weren't so much payments for the injured workers to operate your division
Coach of Joseph's and that's correct that this is operational funds for what we do the work we
Do in workers compensation
But same same I mean it still doesn't justify the sweet chair that you're right
Representative, you're correct in that the money that flows into the whiska is from a fee on workers compensation policies
That fee goes into The Whiska account which then funds the division to pay
Benefits and and you know to maintain a workers comp system in the state
Okay
Yes, we're all sir
It's like the death of a loved one, so let's go to slide 10
We're, at the end of my presentation, primarily co-chair Josephson.
I know there's definitely been some interesting step in T-VEP, but just to reaffirm, when
the TVIP program was reauthorized, it is in statute that the recipients you see on
this screen receive the percentages on this green.
other than we look at the amounts that are available,
we hold 250,000 in reserve just in case there's fluctuations
in the available funds when we get to the point of distributing the funds
and then we the rest of the fund go towards a small amount towards
program administration and than two recipients as you see here.
And so that is how TVAP works currently. We're
state training employment program, those funds are competitively granted and through A-WIB
or through individuals in debts.
Okay.
And I think this is part of the answer to Representative Thomas Shefsky's question.
Do you want to go back?
Perhaps.
Oh, sorry.
The commissioner asked me to back.
Thank you.
And also to representative Stapp's questions, the Fairbanks Pipeline Training Center received
An answer to his earlier question.
Great.
Thank you.
All right.
Anything else the two of you would like to comment on?
If not, I want to thank you and we're going to take a very brief at ease to change.
We'll be at Ease very briefly at 2.34.
Okay, we'll come
Back on record in house finance at 237 p.m. Next. We have a presentation from the department same Department Department of Labor on
the statewide
2026 jobs forecast and
Unemployment insurance metrics and they'll let us know what that means
with us today from The Department is Lenin and Weller economists and unemployment insurance actuary and
Corinne Weibold economists for the research and analysis section
Mr. Willer and Ms. Warren Bull are before us. Please put yourselves on the record and begin your presentation
My name is Karina Weebold and I'm an economist with the Department of Labor
And good afternoon
Chair Josephson members of the committee
For the rector my name's London Weller. I am an Economist for the department of labor and workforce development
And also function is the actuary for The unemployment insurance system
Before I get started on the unemployment insurance portion
of the presentation, just want to take a moment to remind everyone,
the department puts out a fantastic annual actuarial publication
that I certainly would recommend everyone to read.
It goes into much more depth on all of these metrics and more that we produce
and that deal with the financing of, of
the Unemployment Insurance System.
And so I just wanna kind of put in a plug there for,
for that annual publication.
If you're looking for some more in-depth data that's readily available on the website,
it's on our research and analysis site under the Department of Labor.
What we're look at here first is the interaction between benefit costs, the net UI contributions,
that is tax contributions from employers and employees.
net UI contributions in green, and then finally the resulting closing balance of the UI trust fund
there in blue. So we can kind of see at least a bit of a historical series here on the relationship
between those. As you'd normally expect between benefit costs and contributions, those tend to
run counter to one another, where necessarily benefit cost rise under periods of heightened
And then on the back end of that the system is designed to recoup those costs with some increased
Tax rates and of course those net contributions should should
Respond in kind and then of Course
Given that relationship the resulting
Balance of the fun I would certainly point to the last several years certainly post COVID with respect to
the closing balance of The fun as something that
It's becoming a growing concern for myself as the actuary.
It bottomed out at just under 300 million in about early mid-2021.
But since then has gained almost 500 million dollars, nearly half a billion dollars in the balance of the fund,
819 and a half million dollars as of just a couple of days ago, so it does continue to grow
Mr. Willard your concern is that it's just being unused so
chair josephson
I can get into some of the specifics as to
why this imbalance has occurred, but primarily, there's been a disconnect between the benefits that are being paid out and
the current financing structure that we have and its ability to respond to these varying levels of benefit costs.
And that's kind of in a nutshell, the issue.
To look at a couple of those metrics from the previous slide in a different way, what
we're looking at here is both the balance of the fund and benefit costs, but as a percentage
of wages that are covered, which is arguably, from my standpoint, a better way to look
at it, uh, What we'd like to see from a financing standpoint is to keep things relative to
a certain percentage of wages.
So as wages change in the economy, we like keep, specifically in reserves, ah, certain
While we can see that this does fluctuate, certainly with respect to benefit costs,
that linkage has broken a bit.
We have seen in kind of doing a little bit of historical...
You know overview here we can kind of look at the the 80s period right which is a period
We tend to speak to as being our our you know most severe economic
Recession that the state is faced, you certainly since statehood and you and we could see here,
you you specifically with respect to
these
These specific ratios where you benefit costs reach nearly 4% in a given year in in late
the late 80s and then again to compare that obviously to what we saw during COVID which was
significant but those didn't even reach you know barely above 2 percent so roughly half magnitude
wise of those of that that recession. But I think overall the point I'd like to make at least with
Pretty much this whole time period, but especially through the 2000s is is a precipitous decline in that benefit cost rate
That is the benefits being paid as a percentage of wages in the economy
Of course say for COVID where obviously we didn't see some significant claims and a bit of an increase in those payouts
But this benefit costs rate
is continuing a long downward trend and has been for a while.
Another reason we will see blips upward in benefit costs in addition to labor market.
contractions is when benefit schedules are increased,
which of course will increase or shift up, right?
That costs structure a little bit,
and that'll put some upward pressure on benefit costs.
But otherwise, long-term trend essentially
is that we're seeing a decline in benefit cost.
And ofcourse, on the flip side of that,
with the trust fund balance,
especially again, since
probably the early 2010s is this growing trust fund balance irrespective of these benefit costs
falling. Obviously with COVID bringing that reserve down but never actually falling to anywhere
below about two and a half percent reserve ratio which is still quite significant.
Mr. Weller first from Fredson Hannon, then represent Thomas Shefsky. Thank you, co-chair, Josephson. Mr
Wellery, remind me, are the benefit costs set in statute or are they tied to the earnings you had in the job that you've lost?
Mr Wellier. Through the chair, Representative Hannen,
Technically both. There's a schedule that is set in statute that does look at wages
and a corresponding benefit amount that would be related to that specific wage level.
We start that schedule at...
I believe, $56 at $2,500 in base-period wages.
Base-period wages just simply being four quarters of wages used.
So it's roughly an annualized period of wage,
and that would correspond to a $66 benefit amount.
And then,
The table, essentially, for every $2,550 in wages increases your benefit amount by $200.
And that works all the way up to a maximum of $370 weekly, not accounting for any sort
dependent allowances or anything like that and we hit that rate or at that
value that three hundred and seventy dollars at a base period wages of forty
one thousand seven hundred fifty follow-up
President Hammond so we increased our minimum wage in Alaska so in theory the
benefit should go up but if we have a maximum set in statute then it doesn't
earnings went up. Is there a presumption here that people who are losing their
jobs aren't even attempting to claim their benefits in Alaska? They're
instead leaving the state because for $370 a week I can't afford to keep the
lights on and if it's unlikely that I'm going to be re-employed over the next
six months.
I'm just not even claiming the benefit because it doesn't nearly match it and I should move south.
Is that something I can conclude from this or is that way too speculative?
And I know that economists like to speculate, but not usually about the social factors.
Mr. Weller, you better stick.
close to your labor magazine through the chair, Representative Hannon. I think it would be
understandable to recognize that the longer any benefit schedule is in place that has a fixed
amount and that as that simultaneously we see wage rates increasing over time. The longer that
continues, certainly the more severe likely the repercussions of the interaction of those
two things happening, you know, it certainly will be, I'm not certainly going to speculate
as to specifically, what might result from that interaction, but at least it's present
in the data that we're seeing a continued decline in claims loads, which certainly indicate,
specifically is not sufficient and certainly has been eroded
in real terms, I'll just point out that the last time
it was adjusted was 2009.
So it's been quite a few years since that's occurred.
Thank you.
That was gonna be my final question.
When did we last adjust it?
So 2009, the maximum benefit was set at $370
and that what it remains in 2026.
Thank You.
Rep. Tom Iszewski.
Thank you, co-chair Josephson through the chair.
I think it kind of touched on a little bit of my question.
I mean, maybe the unemployment percentage
might be another line in this graph
that maybe we could see well, we're like fully employed.
So there's more people contributing into the system.
But my questions is specifically to the rate
for the UI deduction from our paychecks.
Has that increased? I can't remember exactly. I know we talked about it, but I see that
between 2011-2019, just right before COVID, it was pretty steadily increasing the amount of
the fund. Of course, we had COVID. Everybody got an unemployment insurance. It dropped to that
strictly from more people working, less people collecting,
or did we adjust that UI rate somewhere in that time period?
Mr. Willer.
Through the chair, Representative Thomas Sheffske,
it's really a combination of a few things.
And again, this is something that we have seen
in previous periods.
I think it just, we're seeing it at a different magnitude
now, post COVID, but essentially,
Anytime benefit costs fall you should see and again also assuming that the trust fund balance is where we'd like it to be
And I was gonna try to wait till the end to get into some of those specifics. I'll just reiterate here just that that we
We have we like to have a pre-recessionary target for the fund of between three and three point
3% of wages and so that has been historically our target range and what that means is when
it's in that range, we have no solvency adjustments applied to tax rates.
So in terms of that component, that's our goal and when it falls within that
range the final tax rate won't be reflective of any sort of solvancy adjustment.
implementing credits to bring down the entire tax schedule and of course on the flip side if
it's below 3 percent we start adding on surcharges. With respect to the base rate what we look at
are essentially three the most three recent years of state fiscal cost for the system.
against a staggered three of the most recent four years of wages covered.
So essentially what you're getting is an average benefit cost rate over a three-year period.
And that becomes the base of which rates applied to both employers and employees are charged.
to go further, there's a split of that benefit cost
between employers and employees being 73, 27, 73%
of the benefit costs rate is applied to employers.
The remaining 27% is apply towards employees.
And so based on whatever one that 73%, of, that cost rate
is, and then also in addition to wherever the balance falls
and whether we require a solvency adjustment on top
at the resulting rate. With one big caveat and that is that we have minimum tax rates by statute,
1% for employers and a half a percent for employees. What we certainly found in the last several
years, certainly post-COVID once, you know, we've recovered from an actuarial standpoint, meaning
And then also seeing benefit costs continue to fall, especially as the percentage of wages covered.
We've hit that 1% minimum floor and can't go below it, regardless of any of those metrics.
And that's.
Why we've essentially found ourselves with an accelerating trust fund balance is we we really the system has lost its ability
To adjust to these costs and to where the balance are and and
To allow a tax rates to be reflective of that specific cost
Yes, follow up. Thank you coach. You're just and through the chair. Okay, so I just went through a math course of
Differential equations. It seems like
In your answer on that it looks like you
We increased the employer tax rate in 21-22
and then dropped it back down.
And it looks like the employee tax
rate has stayed pretty steady.
So that 21 22 really accelerated that growth
and it seems like, I guess I didn't realize or maybe I did
at some point that you have those levers
division two make those adjustments by what you said the three and a half
percent of so do you have a you've a chart on that graph on
that
Through the chair, Representative Tommy Chesky,
I guess maybe I misspoke just to be clear
on the solvency adjustment.
It's in statute and there's a mechanism
in which we have to go by a explicit calculation.
We determine what that solvency adjustment
might be if necessary.
I don't have the discretion necessarily
to make it a specific value or anything like that.
It just simply is based on where the value of the fund is
we want it to be and that difference essentially, again, by statute is applied to the final
rate.
So there isn't any discretion from the department standpoint on that, but it is a significant
factor in how the Final Rate is calculated.
that I could certainly get to you on any specific more, you know metrics with regard to solvency or tax rates.
I do get into at least the average tax rate in this presentation and at
least kind of a final run-and-down of the latest 2026 tax calculations. You can kind
of see that framework and how it works, but anything specifically that you'd like I
get to you. One final real quick. Yes. Representative
Thomas Schieske. Thank you, co-chair Joseph and through the
chair. And so I imagine that you have future projections on
where if no levers are changed, where this fund balance is going
to go and are are you coming forward or is anyone coming
forward with specific adjustments to those rates that we
need to maybe look at and adjust.
Mr. Willer I through the chair representative Thomas Fske. I believe there are a couple of proposals to
Perhaps try to rebalance that the ui financing system. Um, I mean, i certainly don't have a specific
proposal
But I I believed there. Are some some proposals ok to address this this issue. Oh
And the future growth. Do you have projections? I through the chair
Representative Tom Chesky. Yes, I do internally continuously produce projections on
Where the fund is headed
We're expected. Yeah, it's benefit costs are going and obviously tax rates and all those sorts of elements. yes
Mr. Will you said that the
highest or peak weekly benefit is $378 in Alaska unchanged for 17 years.
In Washington State, it exceeds $1,000 a week, doesn't it?
Chair Josephson, yes, I believe Washington, don't quote me on this, but I think it's somewhere
around $1300 a year, and every state is different.
Every state has their own way of adjusting their benefits schedules and calculating a
benefit amount.
I, Chair Josephson, I believe it is one of the highest.
I know there's a handful of states that do index their maximum benefit amount.
I think Hawaii also is another state that has a fairly significant maximum.
But yes, we sit certainly somewhere towards the bottom in terms of our replacement rate, our benefit amounts.
Is part of the reason we're so low because we have this hybrid system where we are doing retraining and
That sort of thing pivoting to a different career path that sort thing or do other states also do that
Chair josephson, you know, honestly, the unemployment insurance system while it is this kind of joint federal state system
It's really led to
Kind of a 50 state
kind of experiment where nearly every state kind
of has their own flavor to it, that they all kind
of choose their method of determining one,
how they're going to finance the program,
and then two on the other side, the type of benefits
that their going provide, and the extent
to which coverage is available.
I mean, you could get into seasonal employment
and that sort of thing.
Most states have seasonal disqualifiers,
benefit them out but there's all sorts of different things that you can trade
off but but of course those are all policy calls on your guys' end. That's
what you choose to focus on. Let's go to slide four and I want to make sure we
hear from Ms. Webull as well.
So here, just real quickly, we're looking at one of the average employer tax rate that
would be, technically we have 21 tax classes of which 20 are experience rated, as we like
to call it.
So they vary from 1 to 20, 1 being the low experience, 20 being highest rate class.
But this of course looks at the averages rate of class, 10 and 11 in the blue.
looking at the past, certainly three, if not four years,
we've basically brought that average rate down to one
where, in effect, you know, 2026, we have all 20 classes
are actually at that 1% minimum.
And then also the uniform tax on employees,
they don't, they're not subject to experience rating,
they all just received the same rate.
very infrequently comes off of that minimum half a percent and that that's
partially a result of the the share that you know just being that 27% of
that cost rate ends up being something normally south of half
a % which makes that the effective you
know rate the floor that they end up getting charged but we can see here now
so that at least the last three years of both employers and employees are
Good to five.
So to kind of get back around to a little bit of the discussion earlier, something I did
want to point out historically is first this relationship between average weekly benefit
and the average week wage.
pretty much clearly see outside of a couple of, you know, whether it's labor market shocks
and or in combination with a benefit increase that we've seen a long-
term downward trend in this ratio, that effectively being the replacement rate, where we currently
set it just over 22%, meaning that we're replacing on average 22 cents on the dollar in lost
you know, where you do see it actually that ratio rise.
Generally, it's a combination of a labor market contraction,
but also the single biggest increase, you
know roughly in the middle of this graph here,
it was actually in 2009 when that new benefit amount was changed.
And so we can see how that impacted this replacement rate.
But really since then,
downward trend in that relationship and then of course you ask well what does
that mean you know for the program in terms of individuals filing well so
here's a look at the front and the last graph and this one are both ETA derived
from employment and training administrative data that I just pulled
The reason I did that is because it's comparable across all 50 states, but this is essentially
the recipient's array, and that in regular benefit claimants, those collecting as a percentage
of those total estimated unemployed in a given period.
And again, what we can see is a pretty long-term downward trend in the relative number of individuals
where we've essentially hit a historic low for that value as well,
sitting again right at around coincidentally about 22%.
Representative Govan.
Thank you, a co-chair Josephson, through the chair.
My staff brought my attention to that weekly amount, right,
that 370 maximum.
And I just wanted to see if you would confirm or not.
Some of these pieces, apparently, other states
are in a pretty different space.
So I'm looking at Washington, for example.
They're at $844.
Oregon's at 673 Hawaii 639 so a lot of these are twice or even more than that.
I do see that Wisconsin is right where we are at 370. Do you have any comments on
that or maybe kind of help us?
I know you already mentioned that we haven't done anything with it since 2009.
Is this strictly a policy call then on us, or is there some other mathematical formula
that you would advise us to be thinking about?
suggested metrics in terms of replacement rate that are kind of
nationally recognized. I know 50% is roughly something that is
spoken about a lot in term of a replacement. Again, every state has
their own method of calculating replacement rates. There is just an
infinite number of ways to go about
determining that on an average basis at the max, you know, at
the top of your schedule, the bottom of
your
schedule. You can kind of structure it in many
different ways. But certainly,
50% tends to be the recommended, general recommended replacement rate, again, to way
out the counter between not creating two per-person incentives for not reattaching to employment,
but also at the same time meeting basic needs in the immediate timeframe so that you can
effectively get from one job to another, but again, there are more robust
methods of going about to determine what that ideally might be.
But again, it would be, in the end of policy call,
is to where you decide to, you know, that value to land.
Quick follow-up, if I may.
Yes, follow up, yeah.
Thank you.
And I'm not sure if you've covered this already,
but I know that for some states,
it's for a certain amount of time that they receive
that weekly amount.
And, I apologize if it is in here and I just didn't see it.
How many weeks then someone who is in an unemployment
would receive that?
Mr. Roller.
Through the chair, Representative Galman,
yeah, I apologize.
I didn't put any of that sort of information
into this presentation.
I was trying to.
Obviously focus on more of the financing aspects of it, but yes, there are durations 16 being the minimum 26 being
the maximum duration that one could qualify for and that's of course dependent on their
Pattern of employment the more consistent long-term duration of their employment will lead to a longer qualifying duration
And, of course, the opposite of that, right, being that the more sporadic your employment,
the shorter duration will tend to be.
Hello?
Yes, follow-up.
So, just to clarify, to make sure I understand this, as folks are thinking through the solvency
of this fund, making sure that it's still solid, and making that we're appropriately dispersing
an amount that would seem adequate.
The things that we would look at is the per amount max
and for how long, is there any other consideration
that you might need to look.
And what is a standard, for example,
of what you want to keep in
so that, you know,
you can get through a rough spot of a COVID
or of the mid 80s,
for an example.
Does that make sense?
Mr. Miller yes through the chair representative gallon. Yeah, no absolutely you always have to weigh off way out
you know
Your ability to absorb these costs with what you would like to obviously provide, you know, these individuals and there again
There are a million different trade-offs
You can essentially finance any program you want you just have to be willing to accept right the tax rates that might go along with that for example
So so again, there are quite a few different levers and ways in which to effectively rebalance the system
You know of course again that'll be up to you guys as policy makers to where do you can you repeat mr
Weller you said 16 to 26 weeks
Chair josephson, that's correct. Yeah, the the minimum number of weeks you could qualify for would be 16 maximum 26
So a half of a year is the maximum that you get you good file for honor on a sick on
a unique
regular benefit claim
To be so so what if you're an employee two months?
Chair Josephson if your employed for only a couple of weeks throughout a year
Then you then you wouldn't qualify for for unemployment insurance. You would need to have at least
$2,500 in wages and that and you would have to have in addition to $1,200 in
wages in a year you'd have have at least $250 outside of your highest
quarter of earnings and so you have essentially have wages
in two quarters and there's of course a minimum amount of wages you
Again, you know, using that as a hypothetical example,
you would likely qualify for the 16-week maximum,
not that you have to use it, or the six- week minimum,
of which you could file,
you you as long as you're eligible up to that number of weeks.
Obviously,
you can only collect for one week if you wanted, but...
Anyway, you know, I'll just this to point out that yeah that the the shorter your duration and lower your wages
You know is you're gonna end up with a shorter duration
The more consistent your wage is over time the longer your eligible duration, okay
Representative Bynum. Thank you coach. Hey, Josephson through the chair. Appreciate you being here today
Do you guys track?
When you have an somebody that goes on to the program and receiving a benefit
Do you track on whether or not, obviously when they, they their benefit either runs out or they find employment or
they potentially collect their benefits and then they leave the state all together?
Do, you guys track basically what happens to the folks that are collecting the benefit and whether
or, not they're getting re-employed or leaving the State?
Mr. Ruhler through the chair representative by them. I yes, we we do to to the extent that
the focus is, you know, more broad, what we tend to look at through payroll records will be
in relation to our administrative data for UI. We can essentially match those individuals to
future quarters of a wager to see when, in fact, they may return to work.
We don't necessarily know at the time that they stop filing why that may be necessarily.
if they do subsequently show back up in quarters of wage records we certainly will have that
information and do systematically look at those to see what that kind of re-employment
rate is.
And that is actually an important element that we, you know, we for some other, uh,
you now, tangentially related programs we try to look
Reemployment services and things like that that we're actually finding them and placing them in in employment that's
You know earning them more wages, you know, it was more stable, You Know that sort of a thing
but
But with respect to when they fall off, we don't necessarily know.
We need those subsequent quarterly wage records.
And that's just for Alaska.
I would like to point out, too, that we have a fairly significant number of interstate claims.
Not necessarily non-resident, but they're individuals who earn their wages in the state,
but then subsequently left and filed from outside of the State.
much less information on those individuals, you know, of course, once they leave, if they return,
you, know then again we can look at that and compare those
individuals over time and periodically we will do more longitudinal,
you now analysis on what we referred to as like a repeat filer, that sort of thing.
So to the extent we have wage records, especially in state, we do look
and what those outcomes look like.
Okay, follow-up representing followup.
It would just be interesting to see the data
from that perspective, given that we do have
a lot of industry that is.
volatile, I guess, for the lack of a better word, were seasonal in nature that might have
stretches where somebody can be employed, they would qualify for their benefit, but then they
find themselves unemployed because of the nature of business. And whether or not they're actually
staying here, or they are leaving the state and then coming back, following that basically
cyclical nature, the business, so it would be just nice to know that in the future.
And then finally, I just wanted to wrap up with,
I won't get into every specific piece of data here,
but just to give you a sense of how, on an annual basis,
we're running through the calculation to determine rates
and using the most recent year.
Here's the example, just so that you can kind of get
a chance of where costs have fallen.
The last four state fiscal years is that top line.
Latest year is just under $41 million.
But I would say that probably the most important elements out of this are one looking at the average benefit cost rate there.
That's the line eight at just under a half a percent.
Which then again gets portioned out 73 27 employer employee
And then also the the trust fund balance here, you know at at tax calculation time end of September is the balance used for that
And that's by by statute
that we had a roughly 4.7% reserve ratio which of course was significantly above our high water mark of 3.3 and
calculated us out to needing to
Apply the the maximum by statute solvency credit of four tents
However, just looking at the bottom two lines and just to kind of put a put
You know kind
Of a fine point on on all of this conversation is that yeah if we
ignore the minimum
Rates just for the moment and and calculate out just mathematically that's 73% of the ABCR
solely at Experience Factor 1, we're not going to get into any of the rate classes, but then applying
then the Solvency Adjustment. We would end up at a negative tax rate for employers in 2026,
had we not had the statutory minimum of 1. So that, and then of course for employee ease,
they would be paying roughly 1200 of a percent. Again, not, you know,
ignoring the half a percent minimum for employees and to kind of just give you a
sense of how far out you know from calculation the resulting tax rates
actually are and and that you essentially that again that the the
financing system is essentially lost its flexibility at these at
these levels of benefit payout
And that was the last slide that I had
and I'm through any other questions.
Ms. Weebold, you've been very patient.
Why don't you tell us what your slides.
Sure.
I only have two slides out of respect for your time.
I will go kind of quickly,
but I am here to answer any questions you have
and it can be related to this
or tangentially related if you're interested.
This first.
slide here is our table looking at our jobs forecast for 26 so the first
column is the average annual employment in 24 then in 25 with the change and
then our forecast 426 the industries I guess the highlights didn't come in the
industries of note and I was hoping to have them underlined for you include
oil and gas which we expect to be up a thousand jobs
construction, which we expect to be at 700 jobs, health care,
which continues its very robust growth with 1,100 additional jobs.
And then the federal government,
which, we anticipate being down 400 jobs and I will say that that scene has changed
even since I wrote this forecast and we published it several weeks ago.
We've had new additional information on 2025 and it looks like those are probably
going to much steeper if losses.
Yes. Co-chair Shargi. Thank you, Co. Josephson and through the chair, just out of curiosity,
did you have to mark down the construction industry at all the forecast based on,
oh, this is for 2026, it doesn't look forward, is that right? It is, for
20 26, and it is looking forward because we write it and work on it in 2025. I see, thank you.
Thank you, Kurt, Chair Josephson. I was busy putting in my highlights and missed your last point,
which is a decline. Could you repeat it?
Mr. Weebold. Yes through the chair
Representative Hannon what I was saying is that we were anticipating after losing what we believe to be 300 jobs in federal government in
25 that
We would lose an additional
400 in 26
We were still working with very limited preliminary data for the fed employment at the point that
We are putting this together with additional information
I think that those losses in twenty six for federal Government will be much steeper
Okay, I
Just wanted to make a note that we added 3,900 jobs last year and we're adding 3 thousand this year
So it is a slowing and then this next chart is looking at about a decade of
US average annual job growth compared to Alaska
Alaska is the dark purple line and US is
the dotted line.
What you can really see here is that we've underperformed the nation until
fairly recently and even recently when we have been
growing a little bit faster than the Nation, it is more reflective of them
slowing than of anything that Alaska's doing in particular.
In 2025 we ended up kind of converging and again these are preliminary numbers
but we were both growing at about 1.2 percent
Well, slower growth next year at 0.8, and the U.S. generally is looking at slowing as well.
And you must work with Dan Robinson, I see.
I do.
Okay.
He's down the hall or one of those things.
Representative Gavin.
Thank you, co-chair Josephson.
Page 8 please, and I know you've already gone over the oil and gas increase of jobs percentage-wise. It's 11.1 percent
Given the average wage, I don't know how much you studied that, but if you have any sense of what that might
contributory economy
I know that it's not going to necessarily contribute to our UGF because we don't have any income tax, but if if you have a sense of
What that might bring and and similarly what we might be losing
With regard to the federal jobs, which is a pretty substantial number of jobs as well
Miss Webull
Through the chair. Thank you for the question representative Gavin. It's a good question with the increase
employment and oil and gas and how that's going to be reflected in wages in Alaska's economy.
It is in some ways a little straightforward.
The average wage is about 175,000.
We'll say for oil-and-gas jobs, that is kind of a rough estimate, but about there.
And we're anticipating a thousand of them.
I'm going miss a zero.
I know if I do this in my head, so it's just going assume that we can see that.
One of the things that's interesting about oil and gas is that it is heavily reliant on
non-resident workers, so probably about a third of that is going to nonresident worker.
And then when we look at federal government employment,
I want to put a plug in for an article that we wrote
during the summer looking at Federal employment across Alaska.
But federal employment wages can really vary quite a bit.
Some of the highest paid folks are at the borders here
in Skagway and Hanes.
Some the lowest paid people work in the post offices
in rural areas, so there can be quite the span.
But when we're looking at, we have at about 15,000, 15
1,500 federal employees, and so when
we talk about losing 1 thousand, 1 hundred of them
over the next two years, then those are considerable
losses. Our relationship with the federal government
also extends past just civilian employment.
So we also have a really strong military presence here
We have about 59,000 veterans who live in Alaska.
That's the highest percent of the veterans in the country.
So we see it show up in a lot of different places.
When you look at civilian.
The DOD also supports the largest group of civilian employees here in Alaska, so that would be about 6,000 of them.
And then there's all of the contracts. So there are a lot of contracts that go out throughout that and then through the university.
So, there is a lotta different ways that we get this federal money, but very specifically looking at wages,
there would definitely be an impact.
have the data, not that you need to present it now, but I would love to know if you have
the date on how many of the oil and gas jobs are with Alaskans, and how
many are out of state, if have that data.
I think you mentioned you think 25%, but
I'd like to note if the you had the
data
Two things. One, I'm very excited to say that our residency of Alaska Workers Report is coming out next week.
Thank you.
That is deep in-depth answering exactly that question, so I think that you will enjoy seeing it there.
But Ballpark, about 30, 35 percent.
Okay. Thank You very much.
Ms. Webull, did you say something about the Skagway border customs workers?
Yes. Forgive me if I am getting the wrong word for this.
people who let you in and out of the border, yes.
So, Skagway and Haynes both have those border patrol folks
and they are the highest paid workers,
federal workers in Alaska.
That is a super random comment.
I mean, it was welcome, but it's just,
you could have given me a thousand guesses
and I would have known, come up with that.
I have another one that's very similarly surprising.
Please, we've got a minute.
I think great.
The highest concentration of federal
workers is in the Hoona and Goon census area.
And if you can guess why, what do you think is there?
The U.S. Forest Service.
Yep.
It's Glacier Bay National Park.
It is that there is very few private employers in that census area and that is such a big
one.
So it is really very interesting.
And just my last kind of plug here, I did bring for you all some copies of our federal
jobs as well as our forecast and the fishing edition from November, which I think might
all be of particular interest to you.
You have a fun job.
Well, I'm going to prove that I sometimes read their reports and Chair Josephson.
Is it still true that in that Hoona census area, it's the highest percent of PhDs in
the state?
I do not, oh, through the chair, Representative Hannon,
I am afraid I don't know that.
has a lot of PhDs who come to work, and then they decide to stay.
So they show up as PhD workers,
and they just become Alaskans living a real life with a PhD.
Representative Galvin, we're having too much fun.
I know it, I'm going to add to that right now.
Thank you, co-chair Josephson, through the chair.
I do have one last question with regard to gender and wages.
I believe that the state has some data on this and
I wondered if there's any recent data around how much
women make more than men if they do for the very same job.
If you have that data or anything like it that's recent.
through the chair. Representative Galvin, thank you for that question. It's a topic near and
dear to my heart because I write those reports. They are fairly labor intensive and usually I
like to like, to let several years go between so that we actually have an opportunity to hopefully
see a period of change. So the last one is several year's old. I would like
to do a retrospective soon looking at how the impacts of the pandemic were different for men
Our most recent analysis, besides a small one that I did on women working in the construction industry,
was really looking at how men and women went through our state recession different.
And one of the things that was interesting about that, was there was the biggest improvement in
That looks good on its face, but it in fact wasn't because it belies the fact that what happened there is that the recession
disproportionately affected high-income men.
So what happens if they took the oil and gas and construction jobs out of that equation?
Men earned less money. So women weren't earning a whole lot more,
but comparatively it looked good.
So that's one of the things when we look at this that we always want to take into consideration
is what's happening, what is driving it, and whether or not those top line numbers
are reflective of what we hope that they are, which is some change in the overall conditions.
Thank you, and I guess the follow-up would be when is that the next study that you'll have out that's more comprehensive?
We don't have a date yet, but I would very happy to send you links to our most recent several. Thank You
Okay
With that we're going to adjourn just a couple housekeeping comments. I want to thank
Mr. Weller and miss we build
tomorrow
We'll have, of course, a House Finance Committee meeting at 1.30 on Thursday the 29th at that meeting will continue to hear.
I say continue.
We heard in May SB 64 elections were going to revisit that bill for at least part of the meeting time permitting.
We're going invite Mr. Painter to complete his analysis of
the FY 27 budget.
With that, we will adjourn the meeting at 327.
Thank you.