Legislature(1993 - 1994)
01/19/1993 01:34 PM House FIN
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* first hearing in first committee of referral
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HB 55 FY 94 OPERATING BUDGET & LOAN PROGRAMS
OFFICE OF BUDGET AND MANAGEMENT - FY 94 BUDGET OVERVIEW
SHELBY STASTNY, DIRECTOR, OFFICE OF BUDGET AND MANAGEMENT,
OFFICE OF THE GOVERNOR provided members with two handouts
detailing the Governor's proposed appropriations for FY 94
(Attachments 1 and 2). He reviewed pie charts in Attachment
2, detailing categories of spending. He explained that the
charts are based on FY 93 appropriations. He added that the
FY 94 proposed budget will not vary greatly from FY 93. He
observed that $3,895.7 or 81 percent of state spending is
state funds.
Mr. Stastny interjected that there are 77 different funds
which are potential revenue sources. He discussed figure 2,
noting that 59% of federal funding goes toward operating
expenditures. Capital Budget expenditures account for 41
percent of federal funds.
Mr. Stastny further identified the breakdown of state
spending as provided in charts of Attachment 2. He pointed
out that 59 percent of formula program spending is for
education.
Representative Navarre noted that there is little fat and
inefficiency in the general government category. General
government makes up 12 percent of all state spending as
detailed in figure 6, Attachment 2.
Representative Martin asked if 200 new positions have been
added. Mr. Stastny asserted that the state budget has
decreased by 11 percent in real dollars. He added that the
current budget tracks real dollars as opposed to keeping a
head count. He observed that the reopening of the Wildwood
facility demanded 77 new positions.
CHERYL FRASCA, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE
OF THE GOVERNOR added that, to her knowledge, there are no
increased positions in general government activities. She
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noted that there have been increases in formula programs.
Thirty-eight positions have been added in association with
increased Medicare caseloads. Twenty positions were
associated with the reopening of Harborview. She emphasized
that the Governor's ceiling on new positions has been
successful. She asserted that the Governor's ceiling has
resulted in a 700 position decrease.
Representative Martin emphasized that debt service has
decreased. He expressed his concern that agencies are
adding to their budgets through program receipts.
Representative Navarre asked that reductions due to debt
service be accounted for in calculating actual operating
expenditures.
Members discussed data computations and means to show actual
state expenditures including supplementals and accounting
for declines in school and G.O. debt retirement.
Representative Navarre asserted that the supplemental
process pressures legislators into approving funds that
agencies have already spent. He suggested that
supplementals be introduced no later than the second day of
the legislative session. He added that supplementals not
passed by the 30th day of the legislative session not be
funded. This would allow agencies to make internal
adjustments to reflect that their supplemental requests will
not be funded. Members continued to discuss the history of
the supplemental process.
Representative Grussendorf expressed his preference for
budget calculations demonstrating base and adjusted base.
The Office of Management and Budget has provided these
distinctions in past years.
MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION noted
that the Administration has changed their format. He
assured members that the Legislative Finance Division is
working on a file which will identify increments and
decrements in the budget.
Representative Martin expressed support for Representative
Navarre's suggestion that early passage of supplementals be
required.
Mr. Stastny defended the new format used by the Office of
Budget and Management to track the budget. He assured
members that the Office of Budget and Management is willing
to provide the legislature with needed data. He agreed with
Representative Navarre that early passage of supplemental
legislation is desirable. He discussed the need for a fast
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track supplemental during the first session of the
Eighteenth Legislature to fund the Division of Elections.
He observed that the Governor's supplemental request will
be for $40 million dollars.
ALASKA COURT SYSTEM
ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT
SYSTEM provided members with a handout detailing the Alaska
Court System's FY 94 Operating Budget Request (Attachment
3). He discussed Attachment 3. He noted that there are 677
positions in the Alaska Court System. He observed that the
Alaska Court System's budget is only 2 percent of the state
budget. He emphasized that 131,000 cases were filed in the
past year. He noted that the per case cost is approximately
$265 dollars.
Mr. Snowden emphasized that the Alaska Court System has only
grown by 1.5 percent annually since 1985. Excluding
mandatory cost of living pay raises the growth rate is 0.2
percent annually. He asserted that this rate is lower than
other agencies with which the courts work. He noted that
felony and state filings have grown.
(Tape Change, HFC 92-3, Side 2)
Mr. Snowden added that nearly 95 percent of the Alaska Court
System's operating costs are fixed. He asserted that the
Alaska Court System's employees are the lowest paid in all
three branches of government and that their work day is 2.5
hours longer. He noted that 80 percent of their budget is
in personnel costs. He pointed out that 70 percent of the
employees are range 15 or under.
Mr. Snowden discussed page 1, Attachment 3. He observed
that new positions and funding requests are itemized. He
noted the need for new space to comply with handicap access
requirements. He observed that the Alaska Court System is
requesting an increase in jury compensation. He noted the
need for an additional position to assist in the Mental
Health Trust case. He detailed other requests for funding
as outlined in Attachment 3.
Representative Parnell asked what issues will increase
demand on the Alaska Court System over the next years. Mr.
Snowden noted that a greater burden will be placed on the
courts to interpret for individuals who have English as a
second language. He added that additional cases will be
filed on behalf of the elderly. He noted that the Alaska
Court System does not take positions regarding new state
legislation. He added that new legislation will result in
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additional fiscal notes.
Representative Parnell asked for information regarding the
data base being created by the Alaska Judicial Council.
WILLIAM COTTON, EXECUTIVE DIRECTOR, ALASKA JUDICIAL COUNCIL
discussed the data base being created by the Alaska Judicial
Council. He acknowledged the desire to coordinate data with
the Department of Public Safety and Department of Law. He
observed that their data base was designed to help in policy
recommendations. He elucidated that the ultimate goal of
one unified data base is not currently feasible.
Co-Chair Larson asked if the one time appropriation of $88.4
thousand dollars to establish a data base would be carried
over into the next fiscal year. Mr. Cotton affirmed that
funds would be carried over to continue one position.
Representative Martin questioned Mr. Snowden in regards to
airline frequent travel mileage. Mr. Snowden noted that the
airlines do not currently allow transfer of individuals
mileage to the agency. He added that mileage gained by
using ALASCOM is used to pay the most expensive travel.
Representative Martin asked if costs associated with the
Victim Rights Act could be paid under the Felony Act
pertaining to Alaska permanent fund dividend checks. Mr.
Snowden did not know. Mr. Snowden further discussed
increased costs associated with the Victims Rights Act.
Mr. Snowden emphasized the need for funding to provide
magistrate trainers for each district.
Co-Chair Larson noted that the Victims Rights Act has not
been funded. He asked how Mr. Snowden has provided for the
requirements of the Act. Mr. Snowden assured him that the
Alaska Court System is following the directives of the Act.
He emphasized that the additional requirements without
passage of the associated funding has resulted in a further
backlog in the courts. He noted that a 4 to 6 month
reservation is needed to go to jail to serve a DWI jail term
conviction.
Co-Chair Larson noted that the Alaska Court System
Subcommittee consists of Representatives Parnell, Barnes,
Porter, Navarre, and Grussendorf.
DEPARTMENT OF ADMINISTRATION
NANCY BEAR-USERA, COMMISSIONER, DEPARTMENT OF ADMINISTRATION
provided members with an overview of the Department of
Administration's FY 94 budget request (Attachment 4). She
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observed that the Department of Administration consists of
core governmental programs: personnel, finance, risk
management, retirement and computer support. She asserted
that the Department of Administration's FY 94 budget request
is a maintenance budget. She emphasized that FY 94 general
government spending has not changed. She noted that the
Department of Administration issues 9,500 warrants a day.
Commissioner Usera discussed divisions within the agency.
She referred to page 4, Attachment 4. She compared the
Department of Administration's budget to the total state
budget. She reviewed the allocation of funding categories
demonstrated on page 5, Attachment 4.
Commissioner Usera emphasized the need to fully fund the
Public Defender and Office of Public Advocacy. She asserted
that these budgets have been intentionally short funded.
Short funding has resulted in yearly supplementals.
Commissioner Usera commented on issues for FY 94. The
Department's number one priority is the Longevity Bonus
Program. She discussed legislation to be introduced by the
Governor. She stated that the proposed legislation will
provide a three year transition. The program will not
contain an annuity provision. She asserted that the State
of Alaska cannot afford an annuity provision. She added
that other investment opportunities exist.
Commissioner Usera observed that elder abuse and adult
protection functions within the Department of Health and
Social Services will be transferred to the Department of
Administration. Assisted living under project CHOICE will
be expanded and incorporated into the Department of
Administration. She emphasized that seniors are supportive
of this change. Commissioner Usera discussed pioneer
resident requirements.
Commissioner Usera reviewed personnel consolidation within
the Department of Administration. She estimates a savings
of $1.14 million dollars. She identified three areas in
need of attention: the merit system, career development, and
training of human resource management.
Commissioner Usera addressed labor negotiations. She noted
that the general bargaining unit has been in negotiation for
seventeen months.
Commissioner Usera referred to EO 87 which would consolidate
building leasing. She asserted that leasing space will be
maximized by this consolidation.
Commissioner Usera discussed telecommunications. She noted
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that the Telecommunications Information Council has been
reactivated. She stated that a state information services
plan will be developed. She emphasized the possibility of a
common delivery system for telecommunication programs. She
observed that digital compression video technology is being
developed.
(Tape Change, HFC 92-4, Side 1)
Co-Chair Larson announced that the Department of
Administration Subcommittee consists of Representatives
Larson, Kott, Green, Brown and Hoffman.
Representative Hoffman questioned the State of Alaska's
Native hire record. He pointed out that the State of Alaska
has some of the highest paying jobs and benefits and that
native communities have the lowest standards of income.
Commissioner Usera agreed that the State needs to improve
its record regarding Native hiring. She observed that the
State's workforce is 7 percent Native. Natives represent 14
percent of the State's population. She noted that Native
communities are often geographically removed from the
State's hiring centers.
Representative Martin questioned the Commissioner regarding
program receipts. He noted that the Department of
Administration has requested additional program receipts
promptly after adjournment. He asked if program receipts
can be anticipated. Commissioner Usera replied that she
would need to know specifically which program receipts are
in question. She noted that the Department of
Administration receives program receipts from pioneer homes
and inter agency charge-backs.
Representative Martin observed that information centers are
being consolidated. He emphasized the need to see
corresponding reductions of positions within the agencies.
Commissioner Usera emphasized that under EO 87 the
Department of Administration will no longer manage the
Department of Transportation and Public Facilities' leases.
The Department will gain positions from the Department of
Health and Social Services under reallocations of senior
functions.
Representative Grussendorf asked if the proposed one year
residency requirement for pioneer homes could be extended to
two years.
Commissioner Usera discussed residency requirements and
discrimination. Representative Navarre suggested that a
fund be capitalized for eligible seniors. Members discussed
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a draw down approach.
In response to questions by Co-Chair Larson, Commissioner
Usera stated that there would be a supplemental request by
the Department of Administration to cover a longevity bonus
shortfall. If the fifteen year requirement for pioneer
homes is reduced to one year costs could remain the same.
She stated that Medicare eligible individuals can be
provided for through private nursing homes.
The Department of Administration will meet with the Alaska
Labor Relations Agency, on January 27, to determine whether
the State was eligible to adjust state health benefits.
OFFICE OF THE GOVERNOR
MIKE NIZICH, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
OFFICE OF THE GOVERNOR discussed the proposed FY 94 budget.
He noted that there are four appropriation levels: Special
Offices and Commissions, Executive Operations, Office of
Budget and Management, and Elective Operations. There are
also fourteen separate components composed of support
functions to the Governor for management of the Executive
Branch.
Mr. Nizich stressed that the proposed FY 94 budget for the
Office of the Governor is a maintenance budget. He noted
that there will be a reduction in Elective Operations.
There are 171 full-time, 4 part-time, and 19 temporary
positions. The Human Rights Commission is recommending a
$7.2 thousand dollar general fund reduction. The Governor
is recommending the discontinuation of the Sentencing
Commission. Executive Order 84 would merge the Alaska
Women's Commission with the Alaska Children's Commission to
maximize efficiency of available funds.
Mr. Nizich observed that there will be a shift of $36.8
thousand dollars from the Department of Administration to
the Office of the Governor. This represents the lease
budget for the Office of the Governor in Washington D.C.
Mr. Nizich discussed the Media Center. The budget for the
Media Center is $391.0 thousand dollars.
Mr. Nizich summarized other realignments, increments and
decrements. The Office of Budget and Management will be
reduced by $289.9 thousand dollars. The Office Governmental
Coordination will receive a decrease of $62.6 thousand
federal fund dollars. The Division of Elections is seeking
a $90.0 thousand dollars fast track supplemental to cover
REAA elections. They are also requesting an operating
supplemental of $800.0 thousand dollars. There is a total
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reduction in the Office of the Governor of $1,895.1 million
dollars.
Representative Grussendorf referred to the Media Center. He
noted that the Media Center was created as a cost neutral
program. Mr. Nizich further discussed operations of the
Media Center. He concluded that there is a need to create a
section or division to manage functions of the Media Center.
Co-Chair Larson announced that the Office of the Governor
Subcommittee consists of Representatives MacLean and Larson
as Co-Chairs, Hanley, and Navarre.
Representative Martin expressed his concern that agencies
transferring media functions to the Media Center show
corresponding reductions in their budgets.
Co-Chair Larson provided members with a memorandum
concerning subcommittee budget instructions (Attachment 5).
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