04/14/2009 09:00 AM Senate FINANCE

CS FOR HOUSE BILL NO. 199(FIN) am                                                                                             
                                                                                                                                
     "An Act making appropriations, including supplemental                                                                      
     appropriations and capital appropriations; amending                                                                        
     appropriations; and providing for an effective date."                                                                      
                                                                                                                                
9:54:55 AM                                                                                                                    
                                                                                                                                
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
OFFICE  OF THE GOVERNOR,  explained that  HB 199  represented                                                                   
the  non-transportation  appropriations   expected  from  the                                                                   
American Recovery  and Reinvestment  Act (ARRA),  or economic                                                                   
stimulus bill.                                                                                                                  
                                                                                                                                
Ms. Rehfeld  acknowledged concerns about drawing  on reserves                                                                   
at the end of  the current and next fiscal years  as a result                                                                   
of  the current  revenue  shortfall. The  administration  has                                                                   
been discussing replacing general  funds with ARRA funds. She                                                                   
referred to a recommendation.  The largest piece not included                                                                   
in the governor's request for  the stimulus funds was related                                                                   
to  education funding.  She referred  to  two specific  funds                                                                   
through the state fiscal stabilization program:                                                                                 
                                                                                                                                
   · $20.7 million discretionary allocation                                                                                     
   · $93 million for education purposes                                                                                         
                                                                                                                                
Ms. Rehfeld  explained  that the House  recommended  that the                                                                   
first part be allocated to communities  through an additional                                                                   
revenue-sharing payment. The administration  hoped to use the                                                                   
funds for  capital appropriations,  particularly those  in SB
 related  to the  major maintenance  list for schools,  and                                                                   
relieve pressure on the FY10 budget.                                                                                            
                                                                                                                                
9:58:59 AM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  reminded the committee  that ARRA  allows states                                                                   
to  utilize the  funds  to help  offset  increases in  school                                                                   
funding. She requested  using the funds in FY10  and FY11 for                                                                   
increases already approved in the school funding formula.                                                                       
                                                                                                                                
Ms. Rehfeld  added  that in the  area of  public safety,  the                                                                   
administration  had  proposed  utilizing  justice  assistance                                                                   
grants  for capital  projects  rather than  in the  operating                                                                   
budget.  She  pointed  to  a   Department  of  Public  Safety                                                                   
appropriation  in  HB 199  for  around  $5.8 million  in  the                                                                   
operating  budget  to  hire law  enforcement  officials.  The                                                                   
governor's recommendation is to  utilize the funds for a one-                                                                   
time  capital  expenditure  and  continue  to  discuss  using                                                                   
general funds for law and public safety.                                                                                        
                                                                                                                                
Ms.  Rehfeld noted  that  the final  items  had already  been                                                                   
incorporated through  the operating budgets,  particularly in                                                                   
the areas of  Medicaid, child support enforcement,  and Child                                                                   
Support Block Grants.                                                                                                           
                                                                                                                                
Ms. Rehfeld referred to potential amendments.                                                                                   
                                                                                                                                
10:01:42 AM                                                                                                                   
                                                                                                                                
LARRY  PERSILY,  STAFF,  REPRESENTATIVE  MIKE  HAWKER,  HOUSE                                                                   
FINANCE  COMMITTEE  CO-CHAIR,  provided  an overview  of  the                                                                   
legislation  as it  passed  from the  House.  House Bill  199                                                                   
added in  all the money available  to the state.  The largest                                                                   
pieces are  $170 million for  education, mostly  state fiscal                                                                   
stabilization funds.  The $93 million would  flow through two                                                                   
school districts.  The $27  million discretionary  fund would                                                                   
go to communities  as additional revenue-sharing  dollars. He                                                                   
also  pointed  to  funding for  Title  I,  special  education                                                                   
funding at over $73 million through the districts.                                                                              
                                                                                                                                
Co-Chair Stedman  asked for  the definition  of Title  I. Mr.                                                                   
Persily  described  Title  I as  a  distribution  formula  in                                                                   
federal   law   dealing   with   economically   disadvantaged                                                                   
students.                                                                                                                       
                                                                                                                                
Mr. Persily added that approximately  $56 million in stimulus                                                                   
funds was added to HB 199 in the  House for energy efficiency                                                                   
grants,   state   energy   program,   weatherization   funds,                                                                   
electronic  medical records  funding, and  about $17  million                                                                   
for job training and employment services.                                                                                       
                                                                                                                                
10:04:15 AM                                                                                                                   
                                                                                                                                
Senator Thomas  asked how  much of  the stimulus money  still                                                                   
remained.  Mr.  Persily  answered   that  HB  199  leaves  no                                                                   
stimulus  money   unclaimed.  The   grants  are   an  unknown                                                                   
quantity, and so are not included.                                                                                              
                                                                                                                                
Co-Chair Stedman opened public testimony.                                                                                       
                                                                                                                                
STEVEN  CUNNINGHAM, CITY  CLERK, CITY  OF HOUSTON  (testified                                                                   
via teleconference), spoke on  behalf of the mayor of Houston                                                                   
in  support  of maintaining  revenue  sharing.  He  described                                                                   
Houston  as an  economically depressed  area  of Alaska  with                                                                   
little infrastructure.                                                                                                          
                                                                                                                                
Co-Chair Stedman closed public testimony.                                                                                       
                                                                                                                                
Co-Chair Hoffman  commented that the $20 million  for revenue                                                                   
sharing  was   the  only  portion   that  would   give  local                                                                   
communities  flexibility while  stimulating  the economy.  He                                                                   
stated his strong support for revenue sharing.                                                                                  
                                                                                                                                
CS HB 199(FIN)am was HEARD and  HELD in Committee for further                                                                   
consideration.                                                                                                                  
                                                                                                                                
10:07:44 AM