Legislature(2003 - 2004)
03/18/2003 03:31 PM Senate STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 115-CORRECTIONAL INDUSTRIES PROGRAM EXPENSES CHAIR GARY STEVENS asked Mr. Burnett to introduce SB 115. MR. JERRY BURNETT, Department of Corrections Director of Administrative Services, explained the bill allows the Correctional Industries Fund to pay state employee wages and benefits for the product managers employed in correctional industries. Effectively, $960,000 would be paid from product revenues instead of from the general fund. CHAIR GARY STEVENS asked what the current product revenue figure was. MR. BURNETT replied the estimate for FY04 is approximately $4,150,000. If SB 115 passes, they would have to manage the fund more aggressively in an effort to increase revenues. CHAIR GARY STEVENS asked him to elaborate. MR. BURNETT added they have product managers and correctional inmates who are employees. Currently they run the Juneau Commercial Laundry, Fairbanks Garment/Flat goods Shop, Kenai Office Furniture Systems Plant, Eagle River Garment Shop, Kenai Metals Plant, Seward Wood Furniture Plant, Palmer Auto Body Shop, and Juneau Staph Guard Hospital Laundry. SENATOR JOHN COWDERY asked if the purpose was to shift employee costs from the general fund. MR. BURNETT replied the salaries and benefits of all 14 product managers associated with correctional industries are currently paid from the general fund. This bill would allow their salaries and benefits to be paid from correctional industries revenues. SENATOR HOFFMAN asked if the salaries and benefits for those positions would remain the same. MR. BURNETT replied there is no proposal to change them. SENATOR GUESS asked for the current revenues and expenditures. MR. BURNETT advised current revenues for Fy04 are about $4,150,000 and without any changes, they expect to have a fund balance of about $300,000 at the end of this fiscal year. Therefore, they would need to increase revenues to pay the salaries and benefits. SENATOR GUESS asked what would be eliminated if those revenues don't increase. MR. BURNETT said they would have to "find efficiencies within the department to cover the costs." SENATOR GUESS queried whether passing this bill would result in positions being cut. MR. BURNETT replied they did not plan to cut any positions as a result of passing SB 115. SENATOR GUESS questioned whether the salaries and benefits discussed could be part of the reduction if the department is unable to make up the more than $600,000 difference. MR. BURNETT wasn't able to offer an answer regarding how the department would handle reductions if they were unable to make up the revenues. SENATOR GUESS said she wasn't making herself clear. She wanted to know if including salaries and benefits would make it an option to exclude them in a reduction because they wouldn't be excluded now. MR. BURNETT replied salaries and benefits are currently paid from the general fund and a general fund reduction to the department could result in a cut to those positions. SENATOR GUESS said she was talking about the Correctional Industry Fund. MR. BURNETT advised cutting positions would be one of their options if the industry fund was unable to generate sufficient revenues to pay for the salaries and benefits of its employees. SENATOR GUESS asked, "But it wouldn't be right now if the Correctional Industries Fund fell short. You couldn't actually reduce salaries and benefits." MR. BURNETT replied, "Currently, if correctional industries revenues were to fall short, it is likely that we would reduce the number of product managers we have even though it is not a direct relationship to the general fund. We would because we wouldn't have sufficient work and sufficient income to justify those positions." CHAIR GARY STEVENS commented the task isn't easy but the idea is the program should pay its way. MR. BURNETT agreed. SENATOR HOFFMAN asked how they planned to generate the additional revenue. MR. BURNETT wasn't in a position to answer. The manager was going to retire and the department would look for a new manager with the entrepreneurial skills to actualize the goal. SENATOR COWDERY asked what the money in the fund is used for currently. MR. BURNETT replied it is used to buy supplies and pay for equipment and pay the salaries of the inmates who work in correctional industries. SENATOR COWDERY asked how much inmates are paid per hour. MR. BURNETT wasn't sure, but thought they were paid in the neighborhood of fifty cents per hour. Even so, they would need significant new revenues. SENATOR DYSON advised he has a continuing interest in correctional industries. The capacity crisis in the state prisons makes it very difficult to take advantage of training and job opportunities. The prison population must become more stable before meaningful training is possible. He sees no reason why the auto body shop at Sutton couldn't one day become as successful as the Nevada prison auto shop where inmates restore antique and classic automobiles. The men and women trained in that Nevada shop have few discipline problems and an extremely low recidivism rate. Those inmates have a trade and typically one or two job offers when they are released so they are able to support themselves and their families. SENATOR COWDERY asked whether Florence, Arizona inmates were required to get a GED [General Educational Development] before they could apply for a job while in prison. SENATOR HOFFMAN recalled inmates were required to work toward a GED before they could get TV privileges. SENATOR COWDERY thought the idea was worthwhile. CHAIR GARY STEVENS acknowledged that Mr. Burnett had his work cut out for him, but this could provide a good opportunity for everyone involved. There was no further testimony. CHAIR GARY STEVENS asked for a motion to move SB 115. SENATOR DYSON made a motion to move SB 115 and attached fiscal note from committee with individual recommendations. There being no objection, it was so ordered.