A cost-cutting measure passed Tues-day by the Alaska House that is estimated to save the state $1.6 million will compel nonprofit drug and alcohol programs to raise more than twice what they do now to be eligible for vital state grants.
Senate Bill 124 could limit services to clients and force some programs to close, say representatives of some of those programs.
The bill passed the House 27-8, but Rep. Les Gara, R-Anchorage, has called for reconsideration. By late Wednesday afternoon, reconsideration had not yet come up for a vote. If it does and passes as is, SB 124 would be sent to Gov. Frank Murkowski for his signature.
The measure affects state grants to drug and alcohol programs by changing the ratio of state-to-local funds from a 90-10 percentage split to a 75-25 split, requiring the nonprofits or the communities they serve to raise $25 for every $75 worth of state grant money. Those groups currently use state grants to pay staff and renovate or build new facilities for alcohol or drug detoxification, rehabilitation, or halfway-house type care.
Murkowski requested the change in his proposed fiscal year 2004 operating budget. The Senate Rules Committee introduced the bill. Fifty-nine programs across Alaska will feel the some impact of the change, either directly or indirectly, including 11 in Kenai Peninsula, Kodiak and Prince William Sound communities.
Rep. Sharon Cissna, D-Anchor-age, attempted twice Monday to amend the bill, first to spread out the increase in local commitment over three years, and upon the failure of that move, to do the same over two years, which also failed.
Reps. Mike Chenault, R-Nikiski, Kelly Wolf, R-Kenai, and Paul Seaton, R-Homer, each voted against the three-year amendment. Chenault and Wolf also voted against the two-year version. House Majority Leader John Coghill Jr., R-North Pole, said not all nonprofit drug and alcohol programs would be affected. Those that receive less than $30,000 in state aid already are exempt from matching requirements and the change would not impact those programs.
The change would impact major components within the Department of Health and Social Services budget, including the Alcohol Safety Action Program, the CAPI grants program, which funds certain community-based prevention programs, the Alcohol-Drug Abuse Grants, the Rural Human Services Program and the Community-Based Suicide Prevention Program.
"The impact on our agency would be devastating," said Henry Novak, head of Cook Inlet Council on Alcohol and Drug Abuse, an agency that serves about 600 clients a year. "For us, it would translate into us having to come up with $170,333 a year."
That would be necessary to receive the $511,000 worth of state grants the agency now gets. CICADA does ask clients to help pay for services. But many have serious substance abuse problems, no jobs and cannot pay.
"A lot of stuff is uncollectible, a write-off," Novak said. "Our overhead is real high, our collection rate real poor."
State grants levels have not increased significantly in the past 10 years, Novak said.
Denita Higman, program coordinator with the Seldovia Village Tribe Prevention Program, said most of its funding comes from federal grants, so her budget won't be directly affected by the state budget cut. However, if those cuts impact agencies to which they refer their clients, such as state-run or state-funded detoxification and residential treatment programs, Seldovia's program will feel the pressure, she said.
"It could have a huge impact for a lot of agencies," she said.
Melinda Freemon, executive director of The Salvation Army Clitheroe Center in Anchorage told Health and Social Services Commissioner Joel Gilbertson in early April that SB 124's passage would cause the center to close its detoxification unit, forcing individuals withdrawing from addictions to seek help in acute-care hospital settings, which would cost approximately four times as much.
It costs $250 a day to detox at Clitheroe, $1,000 per day in a hospital, Freemon said.
"Our state cannot afford to lose detoxification services in Anchor-age," she said.
In a March letter to House Health, Education and Social Services Committee chair Rep. Peggy Wilson, R-Wrangell, Pamela Watts, executive director of the state's Advisory Board on Alcoholism and Drug Abuse, warned that the proposed increase in local match could have serious consequences. She said it might be "extremely difficult" for communities to increase funding to social programs, considering they are facing cuts in revenue sharing themselves.
Watts noted that flat funding over the past 11 years has effectively resulted in cuts due to inflation. Some programs, she added, could go under because of the new local-match requirement. Prevention programs, which do not normally charge for their services, could be especially vulnerable, Watts said.
"This will, unfortunately, have a more deleterious effect on what is already insufficient effort toward prevention of alcohol and other drug abuse," she said.
Despite the calls to drop the increase in local match, or at least to spread its application over several years, the House passed the bill. Pending reconsideration and the governor's signature, the increase from 10 to 25 percent would go into effect July 1.
Chenault said Wednesday that the state appropriates grant funds to many such programs across Alaska. He said it isn't clear which are performing well and which are not. Next year, he said, the state may take a closer look at how effective those programs are.
But the effort to shave state costs this year puts all budget items on the table, including Health and Social Services' drug-and-alcohol programs, he said.
"Do I want to cut into alcohol programs? No. But we have to look at our costs and where we are spending our money," Chenault said.
He acknowledged that alcohol and drug addictions are medical issues and that addicts often need professional help. But there also is an issue of personal responsibility and people shouldn't always look to government programs.
"I wish we could take care of everybody. We have to eventually change society, I feel, and make people responsible for their actions and not just have a program to help them because they don't take care of their problem."
Asked why he voted against phasing in the cuts over two or three years, Chenault said there have been many arguments for doing just that to a myriad of programs being considered for cuts. If the Legislature bent to every such argument, the savings they are trying to make would disappear, he said.
The current cost-cutting move may run counter to the intent of the last Legislature. In 2002, state lawmakers raised the tax on alcohol, expecting to raise an estimated $31 million. The intent expressed by lawmakers then was that half the increase in alcohol tax revenue would go to beef up drug and alcohol programs around the state.
Under the state Constitution, however, one Legislature cannot bind another when it comes to where tax money is eventually spent.
The governor's proposed budget effectively pulls some $13.5 million in general funds out of various state treatment programs and replaces it with the alcohol tax revenues.
According to an analysis provided by Anchorage Democrat Rep. Max Gruenberg's office, the $1.6 million in savings derived from increases to the local match and proposed cuts to prison treatment programs in the Department of Corrections budget show Murkow-ski's strategy "fails to take advantage of the opportunity provided by the Alcohol and Other Drug Abuse Treatment and Prevention Fund" created by last year's tax measure.
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