Legislature(2011 - 2012)HOUSE FINANCE 519
02/09/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB283 | |
| HB286 | |
| HB285 | |
| HB307 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 283 | TELECONFERENCED | |
| *+ | HB 285 | TELECONFERENCED | |
| *+ | HB 307 | TELECONFERENCED | |
| *+ | HB 286 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 307
"An Act making supplemental appropriations, capital
appropriations, and other appropriations; amending
appropriations; repealing appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
2:38:47 PM
KAREN REFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed that she would provide an
overview of HB 307 and would highlight supplemental budget
items on a spreadsheet titled "FY 2012 Supplemental
Requests"(copy on file).
Ms. Rehfeld discussed that the FY 12 proposed supplemental
budget totaled $97,236,400. She provided a breakdown of the
total:
Unrestricted General Funds $78,514,700
Designated General Funds ($2,350,600)
Other Funds $4,810,000
Federal Funds $16,271,300
Ms. Rehfeld explained that within the supplemental request
agency operations totaled $38.9 million; $30.4 million was
general fund. The request included:
Fire Suppression $4.9 million
Disaster Relief $3.0 million
Formula - Adult Public Assistance $2.6 million
Ms. Rehfeld relayed that the capital supplemental for
emergency repairs and projects that were ready to go to bid
during the upcoming summer totaled $20.4 million; $10.1
million was general fund. The bill included two significant
settlements: (1) a $20 million settlement was reached with
the Department of Law for the Optional Retirement Program
$20.0 million; and, (2) an $18 million settlement was
reached with the Department of Education and Early
Development for the Moore case. She explained that the bill
had 18 sections.
2:42:34 PM
Ms. Rehfeld pointed to items 4 through 7 related to
Department of Commerce, Community and Economic Development
(DCCED) (page 1 of the spreadsheet). She detailed that
there had been challenges with the Corporations, Business
and Professional Licensing (CBPL) Division fee structure
and how it had charged various programs for indirect and
other activities. The division had been working to capture
what some of the problems had been for the past several
years. Item 6 was the largest item and related to an
adjustment for licensing fees:
Corporations, Business and Professional Licensing:
Adjustment for Licensing Fees - Fund source change
from professional licensing receipts (receipt
supported services) to the general fund to reimburse
the professions for historical indirect cost
overpayments that were associated with the Business
License and Corporations programs. This is a one-time
fund change.
General Fund Receipt Supported Services $0.0
Ms. Rehfeld expounded that the professional licensing fees
were supposed to be self-supporting; however, as the
charges were incorrectly tagged to certain boards the fees
had gone up. The one-time change would allow the fees to
carry forward into the upcoming year, which would help
smooth cost increases over time. Other CBPL items were
related to indirect charges associated with support for
professional licensing boards. She believed legislative
subcommittees would spend a substantial amount of time on
the issues.
Co-Chair Thomas pointed to page 1, item 2 related to the
Public Defender Agency (PDA) under the Department of
Administration. He pointed to the backup materials (Section
1, page 2) and asked about the $125,000 for a new lease
remodel for Kotzebue and an additional $150,000 for "other
anticipated but unbudgeted maintenance." He opined the
items should have been in the FY 12 budget.
Ms. Rehfeld agreed. She explained that the administration
had worked hard in the past several years to avoid not
budgeting and using the supplemental to fall back on. She
detailed that the budgets for the Office of Public Advocacy
(OPA) and the PDA had been among the most difficult budgets
because the administration had not been able to address the
increasing caseloads in a reasonable way. Work was underway
to determine a better way to budget for the two agencies in
the future.
Co-Chair Thomas wondered whether the $45,000 for an
unbudgeted computer upgrade was for more than one computer.
He repeated his concern about unbudgeted items.
2:48:03 PM
Ms. Rehfeld replied that the PDA item would be detailed
further during the subcommittee process.
Representative Gara asked about a $244,000 increase for
support for CBPL boards and commission members (page 1,
item 4 on the spreadsheet). He wondered why the amount had
been increased by 75 to 80 percent from the prior year.
Ms. Rehfeld replied that the professional licensing boards
were supposed to be self-sufficient; however, because of
some business accounting challenges the state had not been
able to track expenses to the right boards. She believed
that the bill and the FY 13 budget tried to correct the
issue through the fees paid by the boards.
Representative Gara remarked that it was fine if the amount
reflected reimbursement to boards that had put the funding
in; however, he was concerned if the money was additional.
Representative Joule referred to page 1, item 9 associated
with Department of Corrections (DOC) community jails. He
wondered how the $600,000 was broken out between the 15
community jails. The administration had brought forward
$190,000 for the Kotzebue community jail the prior year;
money had been moved around within the line item and the
Kotzebue jail had been shorted by approximately $125,000.
He asked whether the item included funds to cover the jail.
Ms. Rehfeld believed there was a specific line item that
covered the Kotzebue jail. She relayed that DOC had
scheduled a meeting with the jail to discuss reopening;
some of the funds in item 9 would help with the reopening.
The item would be considered for the amended budget as
well. Part of the issue related to how community jails were
funded; the department was working to come up with a
blended per bed rate to allocate funding to avoid the
situation that had occurred when the jail had closed.
2:53:42 PM
Vice-chair Fairclough communicated that according to the
backup the Kotzebue jail was scheduled to reopen on
February 1, 2012. She wondered whether the facility had
reopened. Ms. Rehfeld replied in the negative. She restated
that DOC was scheduled to meet with the jail to discuss
reopening.
Vice-chair Fairclough asked about a $75,000 budget item
related to dispatching services for Kotzebue. Ms. Rehfeld
replied that the item was for the Department of Public
Safety (DPS) and was not related to the Kotzebue jail.
Vice-chair Fairclough observed that the dispatch services
had been paid for in matching funds previously, but would
be charged to the state under the proposed budget.
Ms. Rehfeld informed the committee that there was a DPS
request for transportation during the time the Kotzebue
jail was closed.
Ms. Rehfeld pointed to page 2, item 10 for the Department
of Education and Early Development (DEED):
Student and School Achievement:
Comprehensive System of Student Assessments
Contractual Costs: this additional funding is needed
to accommodate the negotiated contract for the
Comprehensive System of Student Assessments. The FY
2013 Governor's budget includes an additional $750.0
for modified contract terms.
General Fund $1,000.0
Ms. Rehfeld elaborated that an increase in the FY 13 budget
had been included for standards based assessments.
Representative Wilson believed that funding had not been
included for the standards-based assessments for a couple
of years and that the item made up for the error. Ms.
Rehfeld believed the funding was for existing contract
increases. She deferred the question to DEED for follow up.
Representative Wilson had received a different response
from DEED. Ms. Rehfeld replied that they would follow up on
the question later.
2:56:23 PM
Ms. Rehfeld highlighted Department of Health and Social
Services (DHSS) items 14 through 16 on page 2:
Item 14
Adult Public Assistance:
Adult Public Assistance Caseload Growth - Increased
program enrollment, particularly in the disabled and
blind category - tied to the dramatic growth in the
Alaska senior population. A $6,075.0 increment is
included in the FY 2013 Governor's budget.
General Fund $2,600.0
Item 15
Energy Assistance Program:
Low Income Home Energy Assistance Program (LIHEAP) and
Alaska Affordable Heating Program for the state based
on projected needs. The impact of this supplemental
request is being considered for a FY 2013 budget
amendment.
General Fund $928.7
Item 16
Energy Assistance Program:
Low Income Home Energy Assistance Program (LIHEAP) and
Alaska Affordable Heating Program for Tribes based on
projected needs. The impact of this supplemental
request is being considered for a FY2013 budget
amendment.
General Fund $1,691.6
Representative Edgmon asked whether the public assistance
item had been included to meet increased caseload demand
and expected federal shortfalls.
Ms. Rehfeld replied that item 14 was based on increased
demand. There was also contingency language that was
dependent on the amount of federal funding that would be
provided. The item was designed to fill the shortfall in
the projection for the remainder of the fiscal year. She
expected to receive updated numbers in the future.
Ms. Rehfeld pointed to page 3, item 23 related to the
Department of Law:
Oil, Gas and Mining:
Oil and Gas Outside Counsel - Increased litigation
costs for oil and gas outside counsel attributable to
three types of cases: tariff proceedings; Trans Alaska
Pipeline System (TAPS) property tax proceedings; and
oil and gas royalty issues. An increment of $6,150.0
is included in the FY2013 Governor's budget and is
based on anticipated caseload.
General Fund $3,116.0
Ms. Rehfeld discussed item 25 for the Department of
Military and Veterans Affairs (page 3):
Office of the Commissioner:
Base Realignment and Closure Commission Impact -
Department of Defense Secretary Leon Panetta has
announced that the plan to cut nearly $500 billion in
the next 10 years from the Department of Defense
budget will impact all 50 states and a Base
Realignment and Closure Commission (BRAC) will be
requested of Congress to address facility reductions
as soon as possible. The U.S. military's presence in
Alaska represents 10% of the state's economy. The
Alaska Military Force Advocacy and Structure Team
(AMFAST) recommends the State of Alaska hire an
experienced consulting group to address ideas proposed
by the next BRAC. This request will promote and
sustain Alaska's current military facilities and force
structure. The impact of this request is being
considered for a FY2013 budget amendment.
General Fund $300.0
Co-Chair Thomas remarked that a resolution passed by the
Senate discouraging the closure of military bases in Alaska
had left out Coast Guard bases. He stressed that Coast
Guard bases were very important to rural and Southeast
Alaska and would be included in the House resolution.
3:00:17 PM
Representative Gara referred to the $3 million outside
counsel appropriation (page 3, item 23). He opined that it
was less expensive to hire in-house counsel for research
memos, briefings, and other. He wondered why the state
should pay more money for outside counsel when the work
could be done in-state.
Ms. Rehfeld replied that there were excellent attorneys
doing great work in the areas that needed assistance on
some of the important larger ongoing cases. She relayed
that it was possible for some of the work to be done by a
line attorney if the state was willing to bring on
additional employees; however, that was not the approach
that had currently been taken. The item had been on the
administrations list to include in the operating budget
each year, but a supplemental request was usually required.
Representative Gara noted that he had worked on the Exxon
Valdez oil spill case and the state had hired outside
counsel at that time as well. He explained outside counsel
had done work that should have been done in-house. He
believed that administrations had used outside counsel to
keep the state employee count down, but it actually cost
the state more money.
Co-Chair Thomas commented that sometimes the state needed
to hire former state attorneys who had done significant
work on specific cases in order to gain their expertise.
3:03:55 PM
Ms. Rehfeld flagged Department of Natural Resources item 35
(page 4):
Fire Suppression Activity:
FY2012 Fire Suppression Activity - This is a
preliminary estimate of supplemental needs for spring
firefighting and costs of initial attack of wildland
fires through June 30, 2012.
General Fund $4,892.5
Ms. Rehfeld directed attention to page 5, item 38 for DPS
Alaska State Trooper detachments:
Replace Federal Pass through Funds from Alaska Highway
Safety Office - The Alaska Bureau of Highway Patrol
will no longer receive federal funds for non-DUI
related traffic enforcement. In order to maintain
traffic enforcement to include non-DUI specific
activity, such as impaired driving, youth drivers,
aggressive driving and speeding, and seat belt
enforcement, supplemental funding is necessary as the
current budget cannot absorb these costs. Additional
federal funding reductions are anticipated for DUI-
related traffic enforcement starting in FY 2014. The
impact of this supplemental request is being
considered for a FY 2013 budget amendment.
General Fund $1,900.0
Ms. Rehfeld expounded that the Department of Transportation
and Public Facilities (DOT) would continue to receive
federal highway safety funds, but the amount of funds
related to driving under the influence (DUI) would be less.
She noted that the issue would continue to be monitored,
given the importance of ongoing DUI and non-DUI related
enforcement on the highway safety corridors.
Representative Doogan surmised that the federal government
had discontinued funds and the state had become responsible
for funding items with general fund money. Ms. Rehfeld
responded in the affirmative. She clarified that continued
work would not be funded through the specific highway
safety grant.
Representative Doogan wondered whether an evaluation had
been made to determine whether the items should be
continued or lapsed. Ms. Rehfeld replied that the governor
considered the issues and had brought forward items that
warranted ongoing work.
3:07:52 PM
Representative Joule pointed to item 37 on page 5 in the
amount of $106,000 for DPS jails and prisoner
transportation. He did not know what time period had been
used or whether there had been earlier expenses. He pointed
to a $75,000 expenditure (item 36) and wondered how much
the items would end up costing the state; he thought costs
could have been saved. He discussed the difficulties
related to transportation of prisoners from rural areas,
many of which did not have holding facilities. He believed
the state was beginning to realize that it had had a good
deal. He hoped that a deal between Kotzebue and the
administration could be settled.
Ms. Rehfeld agreed. She understood that progress had been
made and the administration hoped for a positive outcome.
Co-Chair Thomas remarked that the seatbelt law had been
implemented because the federal government would pay for
the enforcement. He wondered whether the law would be
repealed if the federal funding was taken away. Ms. Rehfeld
answered that item 38 did not relate to seatbelt
enforcement, which was attached to a different federal
highway safety funding stream.
Vice-chair Fairclough referred to bad weather conditions in
Eagle River and Anchorage that had resulted in road
closures and stranded drivers. She wondered whether
substantial funds had been included for highway safety. She
was concerned that residents would have been unreachable in
emergency situations. She understood that DOT was working
to stay on top of the issue. She pointed to two
appropriations for $100,000 apiece for sanding and snow
removal and wondered whether the amount was enough.
Ms. Rehfeld responded that DOT would do what was needed to
protect the safety of citizens. She expected the numbers
would be refined during session to account for disaster
relief.
3:14:00 PM
Representative Neuman was concerned that the long-term
programs (e.g. item 38) that had been funded by the federal
government in the past almost became embedded in the
operating budget. He wondered whether there was a way to
identify federal funds that were not coming or if the state
was backfilling them with general funds.
Ms. Rehfeld replied that the administration worked with the
departments to identify what they knew looking forward;
typically the reductions and timing were not known very far
in advance. She explained that the co-chair had requested a
look-back on federal funds that could be identified as
going away. The issue also involved funds that had gone
directly to institutions, organizations, or communities;
there would be pressure for the state to look at the items
to determine whether it should continue them. She pointed
to the DPS DUI enforcement federal grant change that
specified allowable and unallowable costs as an example of
an issue the state would need to address.
Representative Neuman was interested in a ten-year forward
plan that showed which federal funds the state would not
receive. He believed there were many important non-state
items that the state could become overloaded with when
funding was lost.
Ms. Rehfeld moved to DOT item 50 on page 6:
AIA Field and Equipment Maintenance:
Purchase De-icing Chemicals - In FY2011, the cost per
ton of urea increased from $342 per ton to $719 per
ton. Also, the airport has commissioned a third new
tank for potassium acetate in order to mitigate
continuing supply shortages. An increment of $1,634.5
has been included in FY 2013 Governor's budget.
International Airport Revenue Fund $1,634.5
Ms. Rehfeld looked at item 52, page 6 related to the
University of Alaska:
Anchorage Campus:
Federal Receipt Authority for Pell Grants - Additional
federal receipt authority is needed to accommodate the
increases in Pell grant activity. A related FY 2013
budget amendment is also being considered.
Federal Receipts $5,000.0
Ms. Rehfeld directed attention to capital items; there were
several items that were emergency in nature or could go to
bid during the upcoming summer if the funding authority was
moved up. She highlighted a DOC Yukon-Kuskokwim
Correctional Center Dorm Renovation Project for Bethel
(item 55, page 7):
This project is necessary to replace capital funding
that was redirected from other projects to address an
emergency with overcrowding at Yukon-Kuskokwim
Correctional Center (YKCC). The YKCC Dorm Renovation
Project adds 28 additional bunks, increasing the
offender housing capacity to 193.
General Fund $1,284.5
Ms. Rehfeld furthered that DOC had used deferred
maintenance funds that had been slated for other projects
in order to complete the work; therefore, item 55 would
provide the department with replacement funds. She looked
at item 57 on page 7 that funded $1.1 million for a Kenai
River parcel purchase from the Exxon Valdez Oil Spill
Settlement (EVOSS) trustee council. The purchase would
provide public access to the river.
Co-Chair Thomas thought EVOSS funds were only designated
for oil damaged properties. Ms. Rehfeld explained that the
EVOSS council had recommended the fund source for the Kenai
land purchase. She could not speak to the requirements of
the EVOSS funding.
Co-Chair Thomas thought follow up on the item was
necessary.
Ms. Rehfeld pointed to DOT items 59 and 60 on page 7:
Item 59
Alaska Marine Highway System - Cordova Dock Emergency
Repairs - The existing float system of the Cordova
Dock needed emergency repairs in the fall of 2011.
General Fund $1,200.0
Item 60
Alaska Marine Highway System - Vessel and Terminal
Overhaul and Rehabilitation - Vessel and terminal
overhaul and rehabilitation is primarily used to meet
and maintain United States Coast Guard requirements
and obtain Certificates of Inspection (COI) necessary
to operate the vessels. Total spending this year is
slightly higher than previous years due to the one-
time $1.2M propeller shaft strut replacement work
required by the Malaspina in order to clear a pending
CG-835 No-Sail order which was about to expire.
General Fund $5,455.0
Ms. Rehfeld relayed that in the past several years $7
million to $8 million had been included annually in the
budget for overhaul work on state ferries.
3:20:59 PM
Vice-chair Fairclough wondered which project had excess
funds that had been redirected to fund the Bethel Yukon-
Kuskokwim correctional facility (item 55, page 7).
Ms. Rehfeld replied that the deferred maintenance money had
been diverted from other projects in order to address
immediate emergency overcrowding in the correctional
facility; the funding would allow DOC to complete the
projects that had been shorted funds.
Vice-chair Fairclough asked why the Kenai River parcel
purchase (item 57) had not been included in the FY 13
capital budget.
Ms. Rehfeld answered that there were a number of items that
Department of Natural Resources (DNR) needed to complete in
order to purchase the property and prepare the boat launch;
DNR felt that more work could be done on the boat launch if
the funds were allocated sooner.
Ms. Rehfeld explained that several items on page 8 had been
moved to the supplemental budget in order to allow projects
to go out to bid during the current spring. She highlighted
several capital items:
Item 68
Nome - Runway 10-28 Rehabilitation - This project will
rehabilitate, repave and repaint the settled area on
the main runway of the Nome Airport. Repair of the
settled area has become a high priority safety
concern. The project will advertise for construction
bids in April 2012 with a schedule for completion by
fall of 2012.
Federal Receipts $3,900.0
Item 69
Unalaska - Runway Safety Area and Pavement
Rehabilitation - This project will construct a runway
safety area, runway extension, airport lighting and
drainage improvements, other minor repairs, and
address poor pavement conditions at the Unalaska
Airport. In order to utilize the upcoming construction
season and not have to wait another 12 months,
authorization is needed before July 1.
Federal Receipts $3,000.0
Item 71
Anchorage Metropolitan Area Transportation Solutions
(AMATS) - Glenn Highway Trail Rehabilitation - This
project will resurface the existing Glenn Highway
trail between Muldoon Road and North Birchwood Loop,
construct a wayside at milepost (MP) 8.6, pave
existing parking area at the westbound weigh station,
replace the existing pedestrian bridge over Ship Creek
(bridge #1402), construct minor realignment of the
pathway at the Muldoon Interchange, and upgrade any
curb ramps not meeting ADA guidelines. In order to
utilize the upcoming construction season and not have
to wait another 12 months, authorization is needed
before July 1.
Federal Receipts $2,340.0
Ms. Rehfeld directed attention to page 9 that included
Department of Law (DOL) judgments and settlements. She
provided detail on the Moore settlement that focused on
helping low performing districts to achieve success (item
79). The $18 million would be used over a five-year period
and a committee would be appointed (that would include
DEED) to design how the funds would be used.
Co-Chair Thomas wondered whether funds for non-performing
schools could be removed from the operating budget, given
the $18 million allocation in the supplemental budget.
Ms. Rehfeld replied that the funds in the supplemental were
specific to a legal settlement. She deferred the question
to DOL for follow up.
3:25:10 PM
Representative Wilson relayed that they [Education
Subcommittee] were meeting with the attorney general to
determine what the state could and could not do. She
wondered why the Moore settlement funds had been allocated
all at once if they were to be spent over a five-year
period.
Ms. Rehfeld replied that the decision may have been part of
the settlement negotiation.
Representative Wilson would follow up on the issue.
Ms. Rehfeld referred to page 9, item 80. She detailed that
the backup materials included a complete list of judgments
and claims. Item 80 was the largest and related to the
optional retirement system for university professors and a
change in the Teachers' Retirement System (TRS) employer
contribution rate:
Judgments and Settlements - Actual judgment and
settlement costs received as of January 30, 2012
General Fund $20,770.8
Ms. Rehfeld discussed the supplemental request for disaster
relief; it was hard to predict the level of funding needed
(item 87). The item factored in expectations based on fall
and winter storms and potential spring flooding and other:
Supplemental Disaster Funding - Current disasters are
expected to exhaust the available general funds in the
Disaster Relief Fund. In addition to fall and winter
storms, traditionally there are springs floods that
have been eligible for expenditures from the Disaster
Relief Fund. The impact of this supplemental request
is being considered for a FY2013 budget amendment.
General Fund $3,000.0
3:27:32 PM
Ms. Rehfeld pointed to ratifications on page 10. Items 97
through 99 reflected precise dollar amounts; funds for fire
suppression activity (item 97) were $36,388.
Representative Costello looked at a DNR item related to the
gas pipeline project (page 9, item 85) that included zero
funding. She asked for an explanation on the item that
appeared to be a statute related change.
Ms. Rehfeld explained that the item related to ongoing
Alaska Gasline Inducement Act (AGIA) efforts under DNR and
extended the lapse date on a previous appropriation. She
would follow up with the estimated amount.
Representative Neuman wondered whether the item 85 was a
reappropriation of a prior supplemental. Ms. Rehfeld
responded that some of the AGIA appropriations were
classified as a "multi-year operating"; the administration
followed up to provide an estimate of available funds that
would allow items to continue into the next fiscal year.
She would follow up with more detail.
Vice-chair Fairclough commended DOL for resolving multiple
legal cases that had been ongoing.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 307-Supplemental_Spreadsheet_1-31-12.pdf |
HFIN 2/9/2012 1:30:00 PM |
HB 307 |
| HB286-DOR-TRS-NEW FN 01-31-12.pdf |
HFIN 2/9/2012 1:30:00 PM |
HB 286 |
| HB 286 Testimony.pdf |
HFIN 2/9/2012 1:30:00 PM |
HB 286 |
| HB 283-Response to HFC Questions Capital Budget letter dated 2.21.2012.pdf |
HFIN 2/9/2012 1:30:00 PM |
HB 283 |