Legislature(1993 - 1994)
03/15/1993 01:32 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HB 55 An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date. HB 56 An Act making appropriations for operating expenses for certain programs for which the costs are derived from mandated formulas or criteria, and for expenses for certain leases and contracts for state services and operations; and providing for an effective date. 1 SUBCOMMITTEE CLOSEOUTS: Commerce & Economic Development University of Alaska Education Incorporated Subcommittee recommendations for the Department of Commerce and Economic Development, the University of Alaska and the Department of Education into HB 55. DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT The Department of Commerce and Economic Development Subcommittee was Chaired by Representative MacLean with members Representative Hudson, Representative Sanders, Representative Menard and Representative Nordlund. Co-Chair MacLean noted the Subcommittee attempted to encourage the Department of Commerce and Economic Development (DCED) to emphasize support for economic development within the State. Co-Chair MacLean provided the Committee with handouts. [Attachments #1 - #3]. She referenced Attachment #1, Transaction Summary for Governor to House. * Measurement Standards received a $56 thousand dollar reduction. They were asking for a $350 thousand dollar increment to increase monitoring at the State's weigh stations. The reduction to the increment will eliminate a vacant weigh station supervisor position. * The Subcommittee reduced the $211.2 thousand dollars increment request to the Office of International Trade. The Department will have the option to allocate this reduction to the area of least importance. * The Economic Development component received a reduction of $160 thousand dollars. The Subcommittee reduced the increment request for "Making the Case" by $63 thousand dollars. The reduction leaves a balance of $390 thousand dollars which includes $250 thousand dollars in the base budget and a $140 thousand dollar increment. * The Subcommittee also eliminated $97 thousand dollars for regional marketing grants. She stated, the regional marketing grants for the ARDOR's are a capital item and should be funded from the capital budget. The purpose of the grant 2 money was to help the ARDOR's leverage investment opportunities and market capital projects in those regions. * Tourism Development component received a reduction of $132.8 thousand dollars. The Subcommittee's intention was to eliminate the Deputy Director position. Funding was also eliminated for the State's participation in the Taejon Exposition in Korea. * The Alaska Tourism Marketing Council received a reduction of $257.2 thousand dollars. The Subcommittee proposed increasing industry support for marketing tourism from twenty percent in the governor's proposal to twenty-two percent creating a general fund savings of $172.6 thousand dollars. Representative Brown asked further clarification of the reduction impact to regional marketing grants and the ARDOR program. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, stated the reduction would not impact the ARDOR funding formula. This proposition is a special program to help marketing on a regional basis. It would be moved to the Economic Development Matching Grant Program. Representative Brown asked how much money to date has been spent on the Korean Exposition. Commissioner Fuhs offered to provide that information. Co-Chair MacLean MOVED to incorporate the Department of Commerce and Economic Subcommittee recommendations into HB 55. There being NO OBJECTION, they were incorporated. UNIVERSITY OF ALASKA The University of Alaska Subcommittee was Chaired by Representative Martin with members Representative Bunde, Representative Gail Phillips, Representative Davies and Representative Ulmer. Representative Martin provided the Committee with handouts. [Attachments #4 - #7]. He addressed Attachment #4, University of Alaska, House Finance Subcommittee Recommendations which listed direct action taken by the Subcommittee. He pointed out that the University budget is the fourth highest budget component in the State. Initially, the University requested $20 million dollars general funds. The Governor cut the request to $5 million 3 dollars unallocated general funds. The Subcommittee determined priorities for the requested funds. The Subcommittee was requested to cut the $5 million dollar Governor's recommendation to $2.5 million dollars. * Compensation component request was zeroed out. * Fixes Costs increments: Anchorage $1.031 million dollars Homer $4.0 thousand dollars Kodiak $5.5 thousand dollars Kenai $41.6 thousand dollars Mat-Su $12.2 thousand dollars PWSCC $51.8 thousand dollars Bristol Bay $5.7 thousand dollars Chukchi $10 thousand dollars Cooperative Extensions $3.4 thousand dollars Fairbanks $1.775 million dollars Fairbanks Research $19.3 thousand dollars Interior $9.1 thousand dollars Kuskokwin $22.8 thousand dollars Northwest $9 thousand dollars Rural College $7.5 thousand dollars Juneau $248 thousand dollars Ketchikan $36.5 thousand dollars Sitka $86 thousand dollars * The building maintenance component will receive a $500 thousand dollars increase from non general funds. * The Basic Support for Instruction - Anchorage received $998.9 thousand dollars from tuition and fees. Student Assessment - Juneau receives $108 4 thousand dollars from tuition and fees. * Category #5 maximizes student fee increases for the following campuses. Social Science Faculty - Kodiak $25.7 Humanities Faculty - Kenai $63.6 Social Science Faculty - Mat-Su $79.7 Undergraduate Programs - Fairbanks $40.3 Initiatives for Enrollment & Distance Delivery - Juneau $92.7 Initiatives for Enrollment - Ket. $7.5 * Component #6, Tuition and Other Non-general Fund Authority increment non-general federal grant for $6.265 million dollars. * The Alaska Geography Textbook - Fairbanks increment for $125 thousand dollars. REPRESENTATIVE JOHN DAVIES disagreed with the priorities established by the University Subcommittee. He thought zeroing out the Compensation component was a mistake. He stated quality teaching requires reasonable compensation interest. The University faculty and administrators have not received a step increase in the last eight years. Representative Davies pointed out that compensation was the regions number one priority. He reiterated, the Subcommittee recommended that it not be funded. The University has currently reallocated funding to meet the fixed cost increases. He noted that the University has attempted to re-examine the administrative structure and reduce those costs before the budget came to the Governor. Maintenance has not been adequately funded for a number of years. Representative Davies drew a parallel between the K-12 costs and the University revenue increment budget. From 1975 to present, the average annual increments to the budgets have been ten percent. The average annual enrollment increase over this time period to the lower levels was 1.8%, while the University level was over 5%. Over fifty per cent of the budget is non-general fund sources. Representative Martin responded to Representative Davies testimony. He noted that the students will be paying twenty-three percent of the incremental cost. He added that this years funding is the same as it was in 1984. He felt that the outline campus administration costs were unreasonable. Representative Martin suggested switching some funds from the University budget to the Science and 5 Technology Fund from general funds. REPRESENTATIVE CON BUNDE elaborated that the University of Alaska is competitive in salaries offered to professionals. He added that each region has not adequately addressed the building maintenance. Monies have been allocated to that component in the past which has been spend elsewhere. (Tape Change, HFC 93-47, Side 1). Representative Therriault questioned the lack of funding for the maintenance component. Representative Martin acknowledged that campus buildings are deteriorating. He suggested that the maintenance budget be meet through the capital budget. Representative Brown asked how many appropriations would be made through the proposed budget. Representative Martin stated that the Subcommittee recommends $2.5 million appropriated funds. He noted that there are twenty-two units with varying allocations. WENDY REDMAN, VICE PRESIDENT FOR UNIVERSITY RELATIONS, UNIVERSITY OF ALASKA, stated the Subcommittee's intent was to provide a single appropriation with new money placed into fixed costs. Representative Brown pointed out that if the funds are not appropriated, there will be no assurance that the funds are received. She asked if $3 million dollars from the Science and Technology Fund were appropriated as a funding source. Representative Martin stated this would be an extension of last year's appropriation from the Agricultural Fund. Co- Chair Larson advised that last year there was a statute passed to provide funding out of the Science and Technology Fund for the organized research in the Aerospace Corporation. Representative Brown understood that funding was a one year allocation and further funding would require an additional authorization in statute. MARSHA HUBBARD, DIRECTOR OF BUDGET, UNIVERSITY OF ALASKA, stated that the University was granted $3 million dollars and was told that this would be a permanent source of funding. Representative Brown felt the decision should be reconsidered. Representative Brown asked where "other funds" originated from. Ms. Hubbard noted the restricted funding categories are: 6 * Money received from other state agencies; * Money received from local government; * Corporate gifts; * Corporate grants; * Private individuals. Representative Brown inquired if funds from other individuals would be considered "interagency" receipts. Ms. Hubbard replied those which come from other individuals would be "intragency" receipts and are general funds. Representative Brown asked for further clarification of increases to campuses compared between the proposed Governor's budget and the Subcommittee's recommendations. Ms. Hubbard explained the standard BRU's have a FY 94 adjusted base and contain no new money, yet do include transfers. The only new money in the budget has a component for each administrative unit. The same process was used by the Governor and the Subcommittee. Representative Brown discussed the increment to the Fairbanks campus. Ms. Hubbard explained the transfer of funds from the Vocational Technology regional budget. Representative Navarre asked why the funds were transferred. Ms. Hubbard stated that Voc Tech was issued statewide and the University transferred it to the regions. For two years, the Legislature has approved it as a regional budget and the Board has now requested that Voc Tech budget be shown by campus. Representative Brown asked the impact on student services should the proposed Subcommittee's recommended budget is adopted. DR. JEROME KOMISAR, PRESIDENT, UNIVERSITY OF ALASKA, addressed the compensation to PERS, TERS and health care costs which create a $4 million dollar increased cost to the University. Given the structure of the budget, there will be less services and a cut back in the academic programs. The students are concerned that they will be paying more and receiving less. He stated he preferred to receive a single appropriation and then allocate those resources to the various campuses. Representative Brown asked if the State was contractually committed to raises for University employees. Dr. Komisar said contractually their is no commitment to the faculty. The compensation increase for fringe benefits is an automatic process. He added, the Board does have a policy which anticipates a three percent increase to all employees this coming year. The impact of the $2.5 million dollars would mean a reduction of two hundred thirty adjunct contracts which supply over ten thousand credit hours and a 7 twenty-eight person reduction to the permanent faculty. There would be a reduction of one hundred temporary staff. Co-Chair Larson recommended extending classes to a weekend schedule. He noted that the University has taken greater than normal general fund reductions over the years. Dr. Komisar pointed out a major reason for students not being able to attend classes is space limitations. The two blocks to hiring more faculty which are finances and lack of people of to assume the obligations. Academic planning is being considered although it is difficult with limited funds. Representative Davies explained that the constitution provides for a Board of Regents to provide oversight responsibilities for the University. Representative Bunde suggested that the "traditional" student does not want to go to school in the evening or on the weekends. He added, according to a study, it is also difficult to get the "traditional" faculty member to teach at those times. Representative Navarre explained the history of multiple appropriations versus the single appropriation. He pointed out that the regions were not able to make changes at their discretion with multiple appropriations at which point the Legislature chose the single appropriation. Representative Martin MOVED to incorporate the University of Alaska Subcommittee recommendations be incorporated into HB 55. Representative Navarre OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Martin, Parnell, Therriault, MacLean, Larson. OPPOSED: Navarre, Brown. The MOTION FAILED (5 - 2). (Tape Change, HFC 47, Side 2). DEPARTMENT OF EDUCATION The Department of Education Subcommittee was Chaired by Representative Larson with members Representative James, Representative Bunde, Representative Willis and Representative Bettye Davis. Co-Chair Larson provided the Committee with handouts. [Attachments #8 - #11]. He referenced Attachment #9, Transaction Summary for Governor to House. The Department 8 of Education Subcommittee used the Governor's proposed FY 94 budget as the base with a two percent reduction scenario creating a $639.8 thousand dollars reduction. The first page (K-12) Support and the School Debt Reimbursement of the transaction summary is comprised of decrements removed from the operating budget and placed into HB 45. The Subcommittee recommendations are as follows: * District Support Services decrement which replaces general funds with PL81-874 funding of $65 thousand dollars. * Data Management which will increase the vacancy to three percent OMB maximum and will provide a $9.6 decrement. * Community Schools will be moved to HB 45 at the $600 thousand dollars level. * Basic Ed and Instructional Improvements given an unallocated general fund reduction of $50 thousand dollars. * Education Special Projects received a total component reduction of $124.1 thousand dollars by reducing programs five percent and reducing the Correct Teen Parent I/A receipts. * The Child Nutrition pass through funds in HB 45 of $18,100 thousand dollars. * The Adult Basic Education 1% reduction ABE to the grants for $17.4 thousand dollars. * The Rural School Vocational Education Programs received a five percent reduction for a total of $9.5 thousand dollars. * Executive Administration - Administrative Services received a two percent unallocated reduction for $33.8 thousand dollars. * The Commissions and Board - Professional Teaching Practice component received a reduction of $12 thousand dollars. * The Alaska Council on the Arts component received a decrement of $28 thousand dollars for travel, publications and grants. * The Kotzebue Technical Operations Grant received a 9 five percent reduction for operations of $42.4 thousand dollars. * The Alaska Vocational Technical Center - AVTEC Operations received an unallocated reduction of 1.3% for a total reduction of $48.4 thousand dollars. * Mt Edgecumbe Boarding School - Residential Program received an unallocated reduction of 1% for a total reduction of $22.2 thousand dollars. * Vocational Rehabilitation - Client Services received an unallocated reduction of $100 thousand dollars. * Independent Living Rehabilitation interpreter referral services reduction of $32.5 thousand dollars. * Americans with Disabilities reduced increment for ADA program of $50 thousand dollars. * The Alaska State Library - Library Operations received a reduction of $37.5 thousand dollars to public library matching grants. * The Alaska State Museums - Specific Cultural Programs received a grants reduction for five percent for a total reduction of $6.3 thousand dollars. * The Alaska Postsecondary Education - WICHE Student Exchange Program decrement of the number of new students for a total reduction of $86.7 thousand dollars. * Federal Student Aid reduction grant funding decrement of $32 thousand dollars for the Student Incentive Grants. Co-Chair Larson noted that the Subcommittee questions dollars spent in the WAMI program. Representative Therriault asked for more information regarding the increased PL81-874 funds. Co-Chair Larson stated it would mean more money coming from the federal government. Representative Brown asked if Independent Living component currently had authority to receive fees. She questioned if program receipts should be decreased. GARY BADER, DIRECTOR ADMINISTRATIVE SERVICES, DEPARTMENT OF 10 EDUCATION, replied the service providers will access the fee, although there has been no requirement to increase the program receipt authorization. When interpreter services are required, a State agency must be asked to pay the fee. Currently, the Division of Voc Rehab actually pays them to provide the service. Representative Brown asked the program impact to Client Services with the $50 thousand dollars reduction. Mr. Bader stated overall, that budget component would increase because of federal receipts. Representative Brown asked about the RSA receipts for the FY 93 Americans with Disabilities Act. Mr. Bader stated that amount was $225 thousand dollars which would be reduced to $210 thousand dollars. Representative Brown inquired what the source of program receipts would be. Mr. Bader offered to provide that information. Representative Brown asked how the Department of Transportation and Public Facilities (DOTPF) would be affected by this component. Mr. Bader replied each Department has a coordinator for Americans with Disabilities and DOTPF would be responsible for their own program. Co-Chair MacLean pointed out the substantial increase to the student loan operations. She noted that there has been no improvement in that area over the years. Co-Chair Larson noted the Department of Education Subcommittee did not offer any increments although in HB 135, Section 14, there is a request for $6.427 million dollars for the public school foundation programs; Section 15 is a request for $98.5 thousand dollars for the WAMI operating costs. Co-Chair Larson MOVED to incorporate the Department of Education Subcommittee recommendations into HB 55. There being NO OBJECTIONS, it was incorporated. Representative Brown noted for the record that some of the proposed cuts will have significant impacts. UNIVERSITY OF ALASKA Representative Martin MOVED TO RESCIND action on the University of Alaska Subcommittee's recommendations. There being NO OBJECTION, it was rescinded. Representative Martin MOVED the Department of Education Subcommittee's recommendations be incorporated into HB 55. Representative Navarre OBJECTED. A roll call vote was taken on the MOTION. 11 IN FAVOR: Hanley, Martin, Parnell, Therriault, Larson, MacLean. OPPOSED: Navarre, Brown. The MOTION PASSED (6-2). The Department of Education Subcommittee recommendations were incorporated into HB 55.
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