Good afternoon. I'd like to call the first meeting at the House Finance University of
Alaska subcommittee to order.
I want to acknowledge that it is now 1210, Tuesday, February 3, 2026 in the house finance
committee room, Adams 519.
I would like acknowledge there are a few members in another meeting who will be joining
us shortly. And I appreciate they're giving me notice that they have to attend that meeting.
Bear with us, but we were going to proceed anyhow,
because we are allowed to do that as a subcommittee.
So we have with today Representative Allard,
Representative Hannon, Representative Tomaszewski,
myself Elise Galvin, and again, let the record reflect
that we do not need a quorum to hear a presentation.
Please take the time to silence your cell phones
for this meeting.
Thank you. And I also want to thank Emily from the Juneau LIO for staffing the committee today.
Thank You to finance staff to LULA and thank you to the subcommittee aid Monica
Schringendorf. I wanted to say that before we get started I want
to remind everyone of the purpose of this subcommittee.
And it's the same for all finance subcommittees in this building.
It's to take a close first look at the governor's budget, department by department, to better
understand how our public dollars are serving Alaskans.
Today, we will hear from the illustrious University of Alaska President Pat Pitney.
She will be presenting a review of the university's Budget from last year and an overview of
I also want to share a special thank you to Pat Pitney.
She was appointed as the President of the University of Alaska in February 2022.
I sincerely appreciate your commitment to our students and to the future of
Alaska with your service. Thank you.
Calvin Schruggie and co-chair Josephson all right Pat Pitt a president pitney pardon me
Will you please put yourself on the record and begin your presentation? Thank you for the records
My name is Pat Pitney. I'm president of the University of Alaska's system
and
Thank You for The Opportunity
to to speak to you about
Where our budget was and and where we hope to go with our with a budget request this year
I think first and foremost, you know, our our university system serves the entire state and
And the impact I
Say this in almost every audience
The impact of what we do is felt in every industry
80% of the students who graduate from one of our programs
stay and work in the state.
So 80%, one year, 75% long-term.
If students go outside for higher education,
only 25% come back.
So this, the investment and in
the State University that stretches
from vocational education all the way to PhD
is paramount to our workforce so I just want to start up with that and this
describes it in a map but I think most of you have seen that. Start with
enrollment highlights. One of the board's highest priorities is our system
wide attainment framework. We also referred to it as our student's first
action agenda but simply it is an institution wide focus on student
retention, and speed to graduation. We've had increases now for the last three years.
It's been powered by stability of the institution and support from the state.
It has also been empowered by most recently the change in the APS scholarship program.
reputation, but the trust of Alaskan families in the institution.
And after some decline, we're turning all of our statistics around from a number of degrees
awarded is now again moving up with the 4.3% increase.
Our student head count is up and our credit hours are up, which means more students are
But what's really exciting is our first time freshmen enrollments are up like 9 percent,
which creates that momentum that will carry through.
We have a major accomplishment slide.
This is a largely an administrative slide, but you can read the administrative stuff,
Our partnerships with industry, so we have now
Some really exciting
Opportunities and alignment with where the state is and in the in federal alignment
around mining and oil and gas and
We are there we we
the state made several years ago so we have major partnerships with industry on our process
technology that process technology degrees a two-year degree offered from Kenai and from Fairbanks
students who graduate in that two year program five years in average wage 135,000
So Conoco Phillips, Exxon, the utility companies, all of them are instrumental in the success
of that program and our enrollment is at the max.
Aviation, aviation partnerships, not only with Alaska Airlines, but with Atlas Air and local
communities on our piloting, as well as our aviation mechanics.
construction management, we've had tremendous support from the construction industry, more
than doubled the number of construction and management enrollees and they're graduating
and going to work.
Another item out there is we are one of seven for a final site visit for National Science
innovation engine if we're successful it's a hundred and sixty million across
ten years so sixteen million dollars a year it does require a match but this is
Alaska's critical minerals accelerator and that also is only possible because of
the industry partnerships that we have so tremendous opportunity I note the last
Our land grant initiative that was passed federally, that allows for 350,000 additional acres.
All of our requests are at the Department of Natural Resources, and they're making a decision.
So this changes our land grants from 150, 000 acres to nearly 500,00 acres, now it'll take time for that material to materialize.
our current land grant so challenges there's a few
first and foremost is how important the higher replenishing the Higher Education Fund is
this has really changed how parents and students look at in-state education and if you recall
80% working within a year, if people go outside,
outside.
Only 25% come back.
The Higher Education Fund and the Alaska Performance
Scholarship is what keeps students in state.
Keeping students and state is
what makes Alaska's healthy workforce.
And so that is critically important
to the university's stability.
The federal uncertainty, we've weathered it fairly well.
We've had, you see the bottom line there, it says 34 grants have been terminated with
the remaining balance of 17 million, but 25 grants that were frozen were 77 million have
been replaced or have reinstated.
So although we've lost grants, 77, the ones are at 17,000,00 the one's that we were able
are worth $77.9 million.
Now this is in roughly $250 million annual spend
in federal research grants and contracts, which is at the peak.
It's the highest it's ever been in the university's history,
our research, an externally funded research.
and other partners so although this is a challenge with hopefully a federal budget being passed
a lot of the uncertainty is going to settle down and and we're weathering the storm
in space race, in drones, we are in a position
to capitalize on the future federal grants
that are out there.
And so we're conservative,
but I also think we can be optimistic.
Other challenges, of course, is deferred maintenance.
And this is no surprise to this group.
The highest capital project highest capitol priority for the university as long as I've been engaged with the University
Which is I started as budget director for The System in 1998
Were
We're dealing with a lot more brake fixes because of the lack of deferred maintenance or doing as much as we can internal
to
to re-prioritize, to put funding in to address the most difficult areas, but it still remains
a significant challenge. And technology and human resources, we're facing what every business,
every state, every entity is, that cybersecurity and fraud is a constant battle when we get
When we catch it and put new practices in,
they come up with something else and still get through.
So this isn't ever gonna go away.
It's just, are we, do we have the due diligence?
And it's a constant investment.
And you'll see that in our fixed cost request.
Human resources, keeping and retaining our qualified staff,
compensation and with with health benefits that exist then you hear that you know
From all entities that isn't a real surprise, but something we we look look for
So starting with our first numbers put this in context
This is the current year budget
So this isn't what we are asking for. This is what? We received last year
So I'm going to use my pointer here if I can find it
So our compensation request last Year was 22
0.6 million that was driven largely by health care
Because the increase was quite modest at 2.75 for
Most employee groups in fact, I think all of all employee group's was 2.75
Of that funding
17 million was appropriated
What wasn't appropriated was the wage increases for our non-union employees
And that's really sent a tough message
We paid our Non-Union employees because that set the discretion of the board. We had to reallocate to do it
not including funding, isn't helpful with the union organizing effort that's going on now and that is a similar position we're in today.
We received most of our fixed cost requests and
this small amount here was a reduction because
some legislators were upset with some board actions last year.
deferred maintenance, and then a couple other projects.
But I see that there's some questions,
and so I'll also have to take questions.
I appreciate it.
And President, I'm going to also add
that for the record we have been joined.
We now have a representative more, a Representative Bynum,
and we've also been join by Representative Jimmy.
And for the sake of this very short meeting,
I'm going to ask us to take, we have three right now
in the queue and then we'll skip ahead,
I believe probably another 10 slides after that
and have a question time again.
So for now we're going
to begin with a Question by Representative Bynum.
Thank you very much Madam Chair.
Thank you for being here. One of the major issues that we've been seeing is dealing with the capital
and ongoing maintenance issues. And I know that last year when we talked about ongoing
maintenance needs, that effectively what the solution was is to look at the legislature
hundreds of millions of dollars of forecasted need with very little to no budgeting
to accommodate the need. And so my question is have you looked at structuring in those actual
costs through your fee structures and whether or not those are ultimately covered through
funding from the legislature or some other
Mechanism to waive them or reduce or basically put a grant place in place to pay for them
Is that something that you're considering or exploring to cover these costs because the cost will go away and the need isn't going away
but relying on
effectively
those general funds to covered those
needs isn t working
Through the chair representative buying them the
Yes, we have not been very successful in
In securing state funding we put the university put forward a proposal
two years ago to
Set up a mechanism that would fund a partial amount through a
Essentially a debt service category, but not
So something like the community assistance
approach that then
We could augment that as our other as debt starts rolling off of our books
the
So that that strategy
Was was viewed quite
Positively in the house
but we weren't able to get traction in the Senate
or through the administration.
We will push that forward again likely next year,
but were waiting for the pieces to be in place.
So that's one out there.
In absence of funding, we're managing our break fixes
and the most important, the, most,
when they happen we we address them the ones that we can we are self-funding
through reserving funds which then takes it away from our instructional programs
it takes away form establishing priorities in our research so it's a
balance but we our self funding roof repairs we do have a student fee in
for infrastructure was put in place when the heat and power plant was a third funded by the state and
then
We we needed to pay the rest so
So that covers the debt some of the debts service for the heating power plan, which was the deferred maintenance
It was of 60 year old plant when we replaced it
Took a lot of deferred maintenance off the books
Other universities also have the fee and most of that goes into deferred maintenance.
So there is some amount, but the magnitude is such that it is not to keep up with the
capitalization would require 100 million annually.
We're asking for 60 million.
In any given year we're putting in about 20 million within our existing budget not counting the 30 million
We put in for operations and maintenance just the basic preventative
so so we are it it is
It's out there
And as a as the state entity
Yes, we do have revenue and we were putting what we can towards it, but it's it
It's bigger than that.
Quick follow up.
One follow-up?
Thank you.
So as far as the facility fee, or if you want to call it that to the students, you know off
the top of your head about how much of that is actually, what does that account for with
the overall need if, but we can get it later.
We can do it.
But it's relatively small.
Thank you up from a hundred
Thank You representative Hannon. Thank. You chair Galvin
President Pitney in the FY 26 budget review overview. I'm looking at the compensation
5.4 was not funded. Can you remind me of where that my recollection is we put it in this house?
And it's not showing
So was it taken out in the Senate or it was taken on the senate okay, and but it doesn't matter was taking out right?
Follow up follow up
So when we get to the FY 27 budget proposal because in The FY 26 the governor proposed fully funded in
the compensation that 5.4 was not
Underfunded and the non-union employees, right so when We get To the 27
The governor's proposal is substantially different 9 million less than the Board of Regents
so I assume and
Want to know how that affects bargained contracts that we are legally obligated to pay as well as I presume
The same group of non-union
Employees are left behind so when we get there if you could elaborate on that
Do you want me to elaborate on that now?
Yeah, now unless you have a slide that's specific to this coming up, then I do, but it's down
So yeah, let's let go ahead and wait for that then and if it doesn't get completely answered representative if you would please
let us know and
Next in the queue is representative allard. Thank you and through the chair.
Thank You for being here today, ma'am
I have a quick question
There is a part and I want to say that it was like the first line you had said that something with the union and you kind of just
What there were some issues or concerns that you have could you elaborate on that just so I can understand a little bit better, please?
Okay, so this this also touches on yours
So last year
the
At conference committee or the Senate the senate only included the
The union represented wage increases
This year the governor only put in the union
represented wage increases.
The message to the employees was,
the only way we're gonna fund you,
even though we've paid the non-union
nonunion salary increases through reallocation
because it's at the board's discretion to pay those.
But the message is, the university isn't going to get funding unless they unionize and it's
this unintentional consequence of only including bargaining cost increases when, you know,
this is the largest group of nonunion employees in the state.
So, there is a union organizing effort active right now, and this is being used as some
of the excuse of why they're doing it.
But in fact, if they've unionized, they vote for a Union, then a contract has to be passed
by the legislature and so there is no way that we would have a contract for those employees
who are talking about voting to potentially unionize in April. But the messaging that
not including non-bargaining salary increases and only including bargaining is kind of incentivizing
Disappointing
That's a lot. Yeah, they're follow-up. No, I know who I'll follow up with later. Thank you. Thanks you
Representative bynam
Thank You madam chair
So we obviously know that we have some real challenges when we talk about compensation and making sure that
we are competitive space to have
you know, fantastic staffing and people doing the work that needs to be done.
I can speak only specifically to my experiences with Southeast
and what we're doing in the university system down there.
And this is probably very similar to the other parts of the system,
but we have very specialized training and instruction
that's needed, for example, in our nursing program
Bringing in people that are specifically qualified to teach that type of course works
has been really challenging when it comes to the pay structure.
And when I talk to university folks about it,
they say, well, we can't be competitive with bringing in a certified captain, for example,
to be teaching the Coast Guard-required courseworks
because we don't have enough pay for that.
do we have or can you create a stipend structure to compensate that licensed person that is very
difficult to bring in to give them a stypon? And I've always seemed to get pushed back from that
because the response is, well, we can't equally provide that to all of our people that are providing
being a certified nurse requires being licensed nurse to be able to teach those
things which also requires some kind of stipend or pay increase to
be competitive so I was just wondering what your thoughts were on that and if
it's something that we are actually looking at and trying to address thank
you. President so through the chair Representative Bynum that it is very good
for the nursing specifically, we've signed an MOU with the union to allow for a premium pay so we
could be competitive because we lost a lot of our nursing faculty at just post-COVID. So we were
perspective, we were able to do that because the legislature helped reinvest in the health
programs.
On the maritime, where working, um, would have to the same thing because it would be
But we'd have to work in agreement.
From a funding perspective, we're considering what we call a tuition surcharge or a higher
programmatic tuition in our marine program, so that we can accommodate that.
Because the class sizes are between 8 and 10 students, plus we have these high, high
premium costs.
maritime training programs nationwide we we can do this and and doing it in
catch canals the right place so working with the the campus director on that
issue actually got a thing this morning from him so I appreciate that and when I
talk to them through the chair when i talk
I am always an advocate to say, you know, one day we will have a maritime academy in Alaska
so that we're not setting our students to go get their full maritime degrees.
down south. We should be doing that right here in Alaska. So it's something I'm passionate about.
I always tell a director down there when I am down here and our southeast folks that this is
something that we need in in Alaskan and I hope that they're bringing at least that idea to you
to say one day maybe we will be the premier location for a maritime academy.
Well, through the chair, Representative, because there are so few in the country and because
That that is a competitive advantage that only University of Alaska Southeast in this nation can do and so we were having those conversations
But we need to we needed to get that foundation first and then jump
Right, thank you
And I'm gonna ask us to move to slide nine and remind the committee that we're gonna hold questions back until
Slide 15 all right. I know we can
So, this is just a comparison of our budget, our actuals from the previous three years,
our current budget and our proposed budget.
And if you look down on the revenue side, bottom line,
our Board of Regents request is 406.
The current governor budget is 358.
The next slide will show that our state's support today
is still less than what it was in the 2014 timeframe.
So, and nominal dollars.
On the good side, our designated general fund is growing and this is largely tuition
and indirect cost recovery.
And we did a recategorization of revenue, which is why this designated General Fund here
have a new category called statutory designated receipts,
which are restricted to the purpose.
So this is like funds we have from donors
or gifts grants or contracts from private businesses
that are not federal.
But you see a significant increase in federal funding.
We do anticipate that to moderate,
kind of odd because you see it's 215 and that's because we didn't get sufficient Federal
receipt authority in the 26 budget so some of our supplemental's will have receipt
authority which is just our permission for us to expend the federal funds for the grants
and contracts we've received so that that is coming.
We are a smaller institution than we were in 2014 because of this dip here, but I've
got to say since 2023, which is a first year of increase.
after 10 years of budget reductions, we've stabilized,
our enrollment is growing, and again,
we're at the peak of our research dollars,
highest in the history of the university,
and our first time freshmen are growing dramatically.
So, I am not gonna go through this particular slide
In it's incons if this is our actuals. This is the true money that comes in
Versus all of us now are talking about the budget. So if
At a point where it is important for me to cover this I will but we're gonna skip it for today
Okay, so that covers where we were last year
Our request
This year I'm gonna go
to the numbers section because it's easier to cover.
Okay, so this is that slide eight that we were talking
about before.
Our compensation is our increased request
for compensation last year was 22 this year's 15,
or for next year is 15.
is we're now cut up on health, mostly cut-up on
health.
We still have some health increases in here, but
minor compared to the 22 million request last year.
The governor has put in six and a half million, which is
specific to compensation increases for the union staff,
which largely are faculty union,
but we have trades and crafts and the others.
we have two very small unions that we plan to have the contracts done in the
next couple of weeks and that will be coming forward. Impact to this number is
very, small because it's a 250 unit group and a 13 person group, so very
small. Our second request, of course, is our operating cost. I mentioned cyber
IT, public safety, especially at the University of Alaska Anchorage campus, is a significant
issue.
And so we're needing to invest more in that, both in Fairbanks and Anchorage and looking
for solutions here at Southeast.
Student Mental Health Services is another request, and this is just to expand coverage.
and increase the number of counselors available to students.
And then our highest programmatic request is for increasing our student recruitment retention
and speed to graduation at 4.9.
Again, going back to stability. Stability is full compensation.
addressing some of the fixed operating costs that are out there and for the
life of our students it's 4.9 or the mental health is important. The student
first agenda is the board's highest programmatic priority out
there, and then you have the 60 million. We call these our tier one requests, but
And I think about what I'm leaving for the next president is fully funding compensation
addressing as much deferred maintenance as possible and replenishing the HIF, that stability.
Yes, these costs are fixed and they're difficult.
Partial funding for those helps us.
And this isn't the full amount of those costs.
We estimate those cost to be at 11.7 million.
But I know the environment that this group is in
and my plan is leaving this place with stability
which is paramount for the reputation,
Paramount for our ability to work with the industry partners that we have that have been so instrumental in helping us grow
Thank you president before we get started on slide 14
I'd wanted to make sure that you're aware that behind you. We have three other representatives here
Closely paying attention. Thank You to representative Carrick representative reference and representative Nelson
And we've also been joined by Representative Stapp here.
Thank you.
Through the chair, I want to welcome Representative
Stap because I'm on the page that I know he wants to see.
So we have started things in the past three years that have really
positioned our universities well in the research space and the continuity of
these, I call these proposals or state funding requests as accelerators.
We're not going to not do these things, we're just not
going make the progress that we've been able to make
without the funding.
We are, as many of you know, the R1 investment
has made a huge difference in our number of PhD students.
We will not reach the threshold of 70 by 2027,
will be very close in the next cycle it's a three-year cycle so it'd be the
next review on our one is 2030 and it because of the number of students we
have in a pipeline reaching that average of 70 over that three year period is
is doable it still stretch but it stuable and or working on it
The $7.5 million is the remainder of the original $20 million request that was made.
Agriculture and food systems has been a priority for several years.
Our drones program, this was originally a $100 million five year program.
I think we've gotten about $30 million total.
This is kind of, the minimum to kind keep that.
that testing and and other programs going
Fortunately were because of our expertise and our strength we were we've got some federal funds
The state funds allow us to work more within state partners
But we are working very closely with DoD and at the FAA level
This critical minerals collaborative. That's the accelerator
That I talked about earlier
160 million
Over 10 years from NSF the required matches 3 million a year
We will know more about that. The visit is on February 11th. We're one of seven finalists
so and
Then I won't spend a lot of time on our capital requests
But they're largely
The other half of what we requested
Last year where we received half funding
So the other one is a footprint reduction where were demolishing buildings at UAF. That's a new one
Well, some of the really old facilities we just need to take off our inventory
And then the bottom line here I'm on page 15 these are the receipt authority
Requests and again, this is just to align our budget with our actuals. It's our it's permission
to
Use the money other than state funds that is is earned and and to a line to the to The Actuals
with that
Happy to take questions and
Through the chair representative Hannah did I cover your question
Representative Hannah
Thank you chair Galvin, so I just want to make sure I understand I believe you did
But that is that the governor's request right now only funds the non-union
compensation
Only funds, the union compensation. Okay,
so only fund the Union compensation and that
Yes the large price difference because it's so substantial is because the rest is in medical
Because it's nine out of 15 right so six out
of fifteen just a nine million difference so there's two components in the nine
million dollars roughly six million and we can get this exact breakdown
roughly 6 million in compensation for non-union staff and roughly three
Health care cost increases for the entirety of our employee base
Any other questions
Representative by them thinking madam chair and through the chair
I'm glad you brought up the drone program
It was one of those things that I've worked with my colleagues from Fairbanks last year to advocate for
So I'm glad to see that that program is still active
and going on.
I think that we see the importance of those types
of technologies and how they're playing a role in Alaska
as we move forward.
So, I look forward to hearing more about that
program and what the status is as
we go through the process here and whether or not
others anything that can do to continue to the advocates
for advancing technologies.
Through the chair. Thank you
Represent environment. We will take you up on that
Thank You represented panning. Thanks. You chair Galvin. I did want to go back on land grants
Page 5 when you talked about an additional land grant, and I want it just to firm that that land-grant
completes a
any land grant if it's all successfully transferred for the University would
complete land-grant obligations that the feds and the state have to the
University.
Through the Chair, Representative Hannah, yes but we will still be among the
I think Rhode Island is the only state smaller than us.
And just for comparison, Texas land grant for their university
is 2 million acres.
And they had access to that land
grant in the 1860s or 70s.
We had to access, to our 150,000 acres starting in 1982.
And ours wasn't the first grant.
So it's never going to live up to the hype that Texas
or even Washington that had all of downtown Seattle.
The follow-up.
Yes, I am not discounting that,
but in our chairs, we are still dealing with cities
who don't have their land transfers from the state.
And so it always say, where is the land
the cascade effect of we have many local governments
whose land-grant obligations haven't been met by the state
and they're tied up with federal transfers also.
So as an alumni of the Spine Land Grant University,
I want to see us have our land grant,
but we also, it's an ongoing question at DNR annually
about how much transferance back to the municipalities
and cities that we owe have we completed.
And through the chair, Representative Hannah, if it helps at all, any community tag on the land, we could not.
So we're not taking what people have already tagged, that they haven't received, so.
Thank you.
Are there any more questions?
Representative Stapp.
I think Chair Gallant, through chair to President Pitney.
good to see you here. Obviously you and I are going to chat a little bit more later in a
little regarding some of these items. But I did want to ask you Director Cahill regarding the drones.
I typically see her at JPMRC here at the end of next month. Curious if you are interested in
coming to join us to freeze out in Fort Grilly on the military exercise through the chair.
Thank you for that announcement and invitation to the president. Appreciate that. Are there any further
questions of the President? Yes, Representative Tom Shefsky. Thank You Chair Galvin through the chair
So you mentioned the contracts union non-union contracts that are happening. I know the UAW
Organized I think the graduate students a couple years back which I thought was kind of weird
You don't produce any autos in at the university system be it
But I know there is another vote coming up and I think it was about 2300
employee university employees and i think is at the same union.
I knew when the UAW graduate students unionized almost immediately after it.
it was a strike. Can you explain a little bit about that or some kind of negotiations
happening and do you expect anything like that to happen with the
new vote that I think is coming in early March maybe?
Sure the chair, Rep. Thomas Shefsky. So the vote will be early march.
2200, maybe 2100 and in final numbers, the graduate students did not strike, but they
threatened to.
At the end of the semester, graduate student union is, I believe, about 450 individuals.
the
Once once there's a vote you have two options
They vote to unionize we go into contract negotiation
they don't vote they vote two vote no and
We move on
so
That's where we're at right now. If they vote to unionize, we have to have a contract before we can come back to the legislature
We will not come about this session because there's just no way to
do a negotiation in
What would what we'd already passed the 80 80 day mark which
Is when you need to bring a con come completed contracts in
Thank you
Thank you, Representative Tamershevsky,
and hearing no further questions,
I would like to say thank you.
Of course to the President,
and thank to you to University and the team
who has put this presentation together.
I appreciate that, and
the next University Subcommittee will be tentatively held
on Monday, February 16th at 9 a.m.,
in this room, Adams 519.
The time is currently 1 p.m. Sharp and the House Finance University of Alaska
Subcommittee meeting is adjourned.