Legislature(2001 - 2002)
03/15/2002 03:44 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 403
"An Act making appropriations for the operating and
loan program expenses of state government, for certain
programs, and to capitalize funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date."
HOUSE BILL NO. 404
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
Co-Chair Mulder MOVED to ADOPT Amendment TEC-1.
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained that Amendments TEC-1 and TECH-2 are corrections
of errors by the Legislative Finance Division. Co-Chair
Mulder observed that the substance of the amendments were
included in the subcommittee reports.
There being NO OBJECTION, Amendment TEC- 1 was adopted.
Co-Chair Mulder MOVED to ADOPT Amendment TEC-2.
Insert:
No money appropriated in this appropriation may be
expended for an abortion that is not a mandatory
service required under AS 47.O7.030 (a)
The money appropriated for Medical Assistance may be
expended only for mandatory services require under
Title XIX of the Social Security Act and for optional
services offered by the state under the state plan for
medical assistance that has been approved by the United
States Department of Health and Human Services. This
statement is a statement of the purpose of the
appropriation for Medical Assistance and is neither
merely descriptive language nor a statement of
legislative intent.
It is the intent of the legislature that the amount
appropriated in this appropriation is the full amount
that will be appropriated for Medical Assistance for
the fiscal year ending June 30, 2003. If the amount
appropriated in this appropriation is not sufficient to
cover the costs of Medical Assistance for all eligible
persons, the department shall eliminate coverage for
optional medical services that have a federal match and
optionally eligible groups of individuals in accordance
with AS 47.07.035. It is the intent of the legislature
that requests for supplemental appropriations for
Medical Assistance for the fiscal year ending June 30.
2003 will not be approved. This intent covers the
budgeted reductions to Medicaid, but does not apply to
any loss of funds that may occur if the department's
"Fair Share" funding mechanism is not approved by the
federal government.
Mr. Teal explained that the Legislative Finance Division
failed to incorporate intended subcommittee language into
the bill. This amendment corrects this omission. The
amendment did not change the language of the Subcommittee.
Representative John Davies did not object to the adoption of
the amendment, but felt that the language in the amendment
recommended by the Subcommittee was unconstitutional and
maintained that it has no effect on the budget. There being
NO OBJECTION, TEC- 2 was adopted.
Co-Chair Mulder MOVED to ADOPT Amendment TEC-3.
* Sec. 10. LEGISLATIVE FINDINGS. The money
appropriated by this Act may be expended only in
accordance with the purpose of the appropriation under
which the expenditure is authorized. Money
appropriated by this Act may not be expended for or
transferred to a purpose other than the purpose for
which the appropriation is made unless the transfer is
authorized by the legislature by law. See, Alaska
Legislative Council v. Knowles, 21 P.3d 367 (Alaska
2001). All appropriations made by this Act are subject
to AS 37.07.080(e). A payment or authorization of a
payment not authorized by this Act may be a violation
of AS 37.10.030 and may result in action under AS
37.10.030 to make good to the state the amount of an
illegal, improper, or incorrect payment that does not
represent a legal obligation under the appropriation
involved.
Mr. Teal explained that the Health and Social Services
Subcommittee added the language without direction as to its
placement. The Legislative Finance Division placed the
language at the beginning of Section 1. The Legislative
Legal Section recommended that the language be placed in the
language section. The wording is identical.
There being NO OBJECTION, TEC- 3 was adopted.
Co-Chair Mulder MOVED to ADOPT Amendment LANG-2. Co-Chair
Williams OBJECTED for the purpose of discussion.
INSERT:
Section NATIONAL FOREST RECEIPTS. The unexpended and
unobligated balance of federal money apportioned to the
state as national forest income that the Department of
Community and Economic Development determines would
lapse into the unrestricted portion of the general fund
June 30, 2003, under AS 41.15.180(j) is appropriated as
follows:
(1) The sum of $170,000 is appropriated to the
Department of Transportation and Public Facilities,
commissioner's office, for road maintenance in the
unorganized borough; and
(2) The balance remaining is appropriated to home
rule cities, first class cities, second class
cities, a municipality organized under federal law,
or regional educational attendance areas entitled to
payment from the national forest income for the
fiscal year ending June 30, 2003, to be allocated
among the recipients of national forest income
according to their pro rata share of the total
amount distributed under AS 41.15.180(c) and (d) for
the fiscal year ending June 30, 2003.
This section must have been unintentionally omitted
when the language section was redrafted. This federally
funded program allocates federal funding to communities
based on formula. Due to various factors in the formula
there are some funds that are not allocated to
communities and that lapse each year. This language
section appropriates $170,000 of the lapse amount to
the Department of Transportation and Public Facilities
for road maintenance in the unorganized borough, and
then allows the remaining amount to be spread again by
the formula. Failure to include this language section
would result in funding not being available to DOT-PF
for unorganized borough road maintenance, plus allow
federal funds to lapse into the general fund, which
should be used by the communities entitled to it.
TOM LAWSON, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT OF
COMMUNITY AND ECONOMIC DEVELOPMENT, explained that the
federal formula was changed and $600 - $700 thousand dollars
were added. The amendment would reappropriate the funds and
prevent a lapse into the General Fund.
Representative Hudson noted that it was an unintentional
omission and that the language is needed to distribute the
funds to the municipalities.
In response to a question by Representative John Davies, Mr.
Lawson noted that the funds are used for maintenance of
schools and roads. The balance is $600 thousand dollars
minus $170 thousand dollars [$430,000].
There being NO OBJECTION, Amendment LANG-2 was adopted.
Co-Chair Mulder MOVED to ADOPT LANG-3.
Sec. 15 LEARNING OPPORTUNITY GRANTS. The sum of
$12,372,000 is appropriated from the general fund to
the Department of Education and Early Development for
the fiscal year ending June 30, 2003, for payment as
learning opportunity grants to school districts based
on the school district's average daily membership to
pay for supplemental student instructional programs
intended to improve student performance. Learning
opportunity grants will provide the opportunity to move
schools toward standards-based education, including
vocational education programs. The increased funding is
available to pay for costs associated with improving
student performance by developing standards-based
programs, including implementation of standards,
aligning student assessment to standards, adopting
instructional models based on basic skills, performance
tasks, and projects, and adopting a standards-based
reporting system. Accomplishing this goal may include
acquisition of textbooks and other educational
material.
Co-Chair Mulder observed that the Department has denied
rural districts' applications to hire trainers. The trainers
would be used to assist in transition to standards based
programs similar to the Chugach School District. He
explained that language would be clarified by the deletion
of "supplemental student". There being NO OBJECTION,
"supplemental student" was deleted from the amendment.
KAREN REHFELD, DIRECTOR, DIVISION OF EDUCATION SUPPORT
SERVICES, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT,
stated that the Department understands the intent of the
amendment. Since the funding is outside of the Foundation
Program, the department has attempted to make sure that it
can demonstrate to the legislature that school districts are
accountable for the funds. The Department has been limited
in their use of the funds.
Representative John Davies questioned how the funds were
used before adoption of the amendment and how they would be
used after the adoption of the amendment. Ms. Rehfeld
explained this is the second year of the grants. Funding has
been used for a variety of purposes. The grants are focused
on supplemental student and instructional programs, such as
tutoring and summer school. The original appropriation was
specifically to assist students on the benchmark and exit
exams. The language was expanded in the last year. School
districts would be able to use the funds for activities
related to professional development or transition to
standards based programs. Outcomes would have to be measured
in order to assure further funding.
Co-Chair Mulder clarified that use of the funds would not be
constricted. School districts would have more flexibility in
utilizing the funds. Rural school districts would be allowed
to hire trainers to help transition into standards based
curriculums.
Ms. Rehfeld added that the Department has directed districts
to other fund sources in situations where the district's
request did not fall under the grants. It's clear that the
Legislature would like the Department to broaden the
application of the grants as long as measurable gains can be
demonstrated.
Co-Chair Mulder agreed that the connection should be made to
results.
Co-Chair Mulder MOVED to ADOPT Amendment LANG-4.
* Sec. 32. SALARY AND BENEFIT ADJUSTMENTS. (a) The
operating budget appropriations made to the University
of Alaska in sec. 1 of this Act include amounts for
salary and benefit adjustments for university employees
who are not members of a collective bargaining unit and
for implementing the monetary terms of the following
collective bargaining agreements with entities
representing employees of the University of Alaska:
(1) Alaska Higher Education Crafts and Trades
Employees;
(2) Alaska Community Colleges' Federation of Teachers;
(3) United Academics;
(4) United Academics-Adjuncts.
(b) The operating budget appropriations made to the
executive branch of state government in sec. 1, 4, and
7 of this Act include amounts for salary and benefit
adjustments for public officials, officers, and
employees of the executive branch who are not members
of a collective bargaining unit and for implementing
the monetary terms of the following collective
bargaining agreements:
(1) Alaska Public Employees Association, for the
Supervisory Unit;
(2) Alaska State Employees Association, for the
General Government Unit;
(3) Alaska Vocational Technical Center Teachers
Association, representing teachers at the Alaska
Vocational Technical Center
(4) Alyeska Correspondence School Education
Association, representing teachers at the Alyeska
Central School;
(5) Confidential Employees Association;
(6) Inlandboatmen's Union of the Pacific,
representing the unlicensed marine unit;
(7) International Organization of Masters, Mates,
and Pilots, Pacific Maritime Region, for the
Masters, Mates, and Pilots Unit;
(8) Marine Engineers Beneficial Association,
representing licensed engineers employed by the
Alaska marine highway system;
(9) Public Employees Local 71, for the Labor,
Trades and Crafts Unit;
(10) Public Safety Employees Association, for the
Correctional Officers Unit;
(11) Public Safety Employees Association,
representing state troopers and other commissioned
law enforcement personnel;
(12) Teachers' Education Association of Mt.
Edgecumbe.
(c) The operating budget appropriations made to
the Alaska Court System in sec. 1 of this Act
include amounts for salary and benefit adjustments
for Alaska Court System employees.
(d) The operating budget appropriations made to
the legislative branch of state government in sec.
1 of this Act include amounts for salary and
benefit adjustments for employees of the
legislature and for benefit adjustments for
legislators.
Co-Chair Mulder noted that the amendment reflects the
acceptance of the state employee contracts. Representative
John Davies clarified that the intent is that contracts be
accepted, regardless of the level of funding. Co-Chair
Mulder agreed.
There being NO OBJECTION, Amendment LANG-4 was adopted.
Representative Hudson MOVED to ADOPT Amendment LAB-1.
ADD
Department: Labor and Workforce Development
BRU: Office of the Governor
Component: Occupational Safety & Health
Federal Receipts 50,000
Workers' Safety Account 23,000
DESCRIPTION:
Representative John Davies OBJECTED for the purpose of
discussion. Representative Hudson explained that the
amendment corrects an error. This non-general funded
increase was inadvertently excluded from the Finance
Subcommittee budget proposal. This amendment would restore
the additional matching funds to allow the Occupational
Safety and Health component to fill an existing Industrial
Hygienist position that has been held vacant for lack of
sufficient state match for existing federal funds.
Currently, the compliance assistance program has a two-month
backlog on health consultation requests from Alaskan
businesses. The amendment would allow the use of federal
funds to hire the position.
There being NO OBJECTION, LAB-1 was adopted.
Representative John Davies MOVED to ADOPT Amendment LANG-5.
Co-Chair Mulder OBJECTED for the purpose of discussion.
Sec. 29. CONDITIONAL EFFECT OF APPROPRIATIONS.
Notwithstanding any contrary provision of this Act, no
money may be expended under the authority of an
appropriation made by this Act, unless and until
(1) A bill or bills that will generate
at least $410,000,000 new state revenue
annually is passed by the Twenty-Second Alaska State
Legislature and enacted into law; and
(2) A bill or bills that (A)
establishes a municipal dividend program, (B) changes
the amount available for distribution from earnings of
the permanent fund to a formula based on a percentage
of the market value of the permanent fund, and (C)
authorizes 50 percent of the amount available for
distribution from the income of the permanent fund to
be transferred to the dividend fund (AS 43.23.045) and
the other 50 percent of the amount available for
distribution from the income of the permanent fund to
be transferred to the general fund is passed by the
Twenty-Second Alaska State Legislature and enacted into
law."
Representative John Davies explained that the amendment
would condition the entire operating budget on the adoption
of a fiscal plan. The amendment would direct the Legislature
to establish bills that would: generate approximately $410
million dollars in new state revenues, establish a municipal
dividend program, change the calculation of the earnings of
the Permanent Fund to a percent of market approach and
authorize a 50/50 split of the dividend stream to dividends
and the General Fund. He explained that this would satisfy
the intent of the Policy Fiscal Caucus.
Representative Croft added that the amendment not only
incorporates the sense of the caucus, but that it implements
many of the details. It also establishes a permanent fund
dividend and municipal dividend. He felt that it was the
most important amendment before the Committee. He stressed
that a budget must include a plan. He stated that it would
be impossible to adequately address the needs of the state
of Alaska without a plan. The two are linked. He
acknowledged that the provision could be removed in the
other body. He stressed the need to make a statement that a
budget would not be passed without a plan. The amendment is
specific and balances the budget, which would provide
stability and allow the state to have a budget for decades.
Representative John Davies observed that one of the
arguments made to pass the budget before the plan was that
it was necessary to demonstrate that there is discipline. He
maintained that if that is the message, it should be part of
the plan. The amendment would tie the operating budget with
the revenue and send the message that there is commitment to
budget discipline. He stressed the importance for the House
to send the message that it views the two as a package. He
clarified that the language does not proscribe or prevent
the option of phasing the impact of any new revenues.
Representative Hudson agreed with many of the statements of
Representative John Davies and Representative Croft. He
noted that the Caucus has attempted to develop a plan where
revenues on a recurring basis were appropriate to
expenditures. He observed that he would oppose the amendment
with deference to an amendment that he would offer at
another time. He showed respect for the leadership decision
to move the budget ahead of the fiscal plan.
Representative Whitaker agreed with comments of the previous
speakers, but noted that the amendment infers that the state
of Alaska is at the point of "no return". He maintained that
while the state is close, it is not yet at the point of "no
return". He felt that there was strategic wisdom with a
cautious approach in regards to the linkage of the budget to
a long-term plan.
Co-Chair Mulder emphasized that the Co-Chairs are serious
about placing a revenue package before the Committee and
that it is their goal to move a package from Committee by
the end of the next week.
Representative Lancaster reiterated that there were
assurances from the Co-Chairs that a fiscal plan would be
developed.
Representative John Davies stressed the merit of linking the
[budget to a plan].
A roll call vote was taken on the motion to adopt LANG-5.
IN FAVOR: Croft, Davies, Moses
OPPOSED: Bunde, Foster, Harris, Hudson, Lancaster,
Whitaker, Williams, Mulder
The MOTION FAILED (3-8).
Representative Hudson amended Amendment LANG-1 by reducing
"$750" million to "$600" million and MOVED to ADOPT an
amended Amendment LANG-1.
* Sec. 38. CONSTITUTIONAL BUDGET RESERVE FUND. (a)
Deposits in the budget reserve fund (art. IX, sec. 17,
Constitution of the State of Alaska) for fiscal year
2002 that were made from sub funds and accounts other
than the operating general fund (state accounting
system fund number 11100) by operation of art. IX, sec.
17(d), Constitution of the State of Alaska, to repay
appropriations from the budget reserve fund are
appropriated from the budget reserve fund to the sub
funds and accounts from which they were transferred.
(b) If the unrestricted state revenue available for
appropriation in fiscal year 2003 is insufficient to
cover the general fund appropriations made for fiscal
year 2003, the amount necessary to balance revenue and
general fund appropriations, not to exceed
$600,000,000, is appropriated to the general fund from
the budget reserve fund (art. IX, sec. 17, Constitution
of the State of Alaska).
(c) The sum of $125,000 is appropriated from the budget
reserve fund (art. IX, sec. 17, Constitution of the
State of Alaska) to the Department of Revenue, treasury
division, for the fiscal year ending June 30, 2003, for
investment management fees for the budget reserve fund
(art. IX, sec. 17, Constitution of the State of
Alaska).
(d) The appropriations in (a) - (c) of this section are
made under art. IX, sec. 17(c), Constitution of the
State of Alaska.
Representative Croft OBJECTED. He pointed out that Amendment
LANG-5 articulated the specifics of a fiscal plan, which
would fill the gap. Amendment LANG-1 does not provide the
specifics. He maintained that the amendment is an attempt to
"scare yourself out of going over" the cliff.
Representative Hudson stated that his intent in limiting the
amount of money that could be taken from the Constitutional
Budget Reserve (CBR) was to require action to increase
revenues from other sources. The amendment intends to set up
a bar of $600 million dollars for withdraws from the CBR.
Under the Fiscal Policy Caucus' plan, funds would be
generated from a statewide sales tax and a percentage of the
earnings of the Permanent Fund would reduce [the draw on the
CBR]. He pointed out that it would not be wise to take more
than $350 million dollars out of the economy in the first
year. The intent of the amendment is to spur or require
action on other revenue generating measures. With a $600
million dollar cap on the CBR the state-operating budget
would be approximately $400 million dollars short.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, maintained that there is
broad support for increasing revenues and stated that the
Governor would do all that he could to help. She noted that
there is a practical problem of the cash flow in the state
of Alaska. In 1999, the state estimated a $685 million
dollar draw on the CBR (based on $15.32 a barrel oil). At
the same time the first cap of $700 million dollars was
placed on the CBR. After adjournment the price of oil
dropped to an average of $12.70 per barrel oil. The amount
needed to fill the budget gap was greater than the cap. The
state borrows from the CBR at the beginning of the year due
to a variety of factors. In FY 02, the state has borrowed
$700 million dollars for cash flow purposes and anticipates
the need for another $100 million dollars. When the
Legislature came back into session it authorized an increase
in the CBR cap. She questioned how the state would operate
under similar circumstances if the Legislature were not in
session and able to increase the cap. She pointed out that
even if the ultimate expenditures were within the cap that
the state might need a greater amount in the beginning of
the fiscal year for cash flow purposes.
TAPE HFC 02 - 49, Side B
In response to a question by Representative Whitaker, Ms.
McConnell explained that the Legislature would have to
change the ultimate dollar amount from the original.
Assuming flat funding, the fiscal 2003 deficit would be
close. A drop of $600 million dollars would be difficult to
implement in 6 months.
Vice-Chair Bunde questioned if the Administration is more
concerned with the method or the amount and questioned if
the concern would remain at a $750 million dollar cap. Ms.
McConnell stated that they would retain their concerns
because it is impossible to know the out come from
projections. She noted that the bigger the cap the less the
concern.
Representative Whitaker questioned what occurs if the [CBR
draw] is not paid back. Ms. McConnell explained that the CBR
could be used to the extent needed to complete the budget.
During the year the state borrows and returns these funds
when the cash flow allows. The final total is not known
until the books are closed. Representative Whitaker asked if
the Administration would not simply ask the next legislature
for a ratification of the amount spent. Ms. McConnell
expressed concern that the state of Alaska's bond ratings
could be affected. Ratifications could present problems. She
did not think it would set a good precedent.
Representative Whitaker did not think it would have more
than a minimal affect on the bond rating.
Ms. McConnell pointed out that there is uncertainty for
those receiving services or state payments.
Representative Davies expressed concern that the language
could be used by the other body in ways that the House does
not intend.
Representative Davies MOVED to Amend the amendment by
substituting: It is the intent of the House that in
preparing the FY 03 Budget that the CBR draw be limited to
$600 million dollars and that the remaining $400 million
dollars be derived from new revenues.
The Motion was Held.
Representative Hudson pointed out that use of the CBR is
always a loan and it is repayable. He observed that $4.5
billion dollars have been borrowed from the CBR, which has
not been paid back. The amendment is a statement of the
intent to come up with supplemental revenues. The goal is to
restrain the draw down on the CBR so that it could act as a
shock absorber to the General Fund. The earnings of the
Permanent Fund would be next if the CBR is depleted in the
next year. He felt that the proposed amendment by
Representative Davies would be a reasonable substitute.
Vice-Chair Bunde observed that the intent is to limit the
CBR draw to $600 million dollars, thus requiring new revenue
development.
Representative Davies reiterated the motion: It is the
intent of the House that in preparing the FY 03 Budget that
the CBR draw be limited to $600 million dollars and that the
remaining $400 million dollars be derived from new revenues.
Representative Davies emphasized that nothing will come to
fruition without the passage of new revenue measures.
Co-Chair Mulder noted that the draw from the CBR is still
needed.
Ms. McConnell clarified that the $400 million dollars might
not be seen.
There being NO OBJECTION, Amendment LANG-1 as amended was
adopted.
Representative Lancaster MOVED to ADOPT Amendment CED-6. He
explained that the amendment would restore State Revenue
Sharing and the Safe Communities Program to the FY02 level.
He spoke in support of the amendment and observed that
communities have lost 50% of their state support over the
years.
Co-Chair Mulder OBJECTED. He pointed out that HB 20 would
provide a $10 million dollar increment for State Revenue
Sharing and the Safe Communities Program.
Representative Croft MOVED to ADOPT an amendment to
Amendment CED-6: "The appropriation in this amendment does
not become effective if HB 20 becomes law, with a community
dividend raising and distributing to municipalities at least
$50 million dollars." The appropriation and limitation would
be one unit in the budget.
There being NO OBJECTION, it was so ordered.
Representative John Davies stressed that they have to vote
on the budget before the passage of HB 20.
Representative Croft spoke in support of the amendment. He
pointed out that the amendment would provide assurance to
municipalities. Representative Davies added that the fate of
HB 20 is uncertain.
A roll call vote was taken on the motion to adopt Amendment
CEC-6.
IN FAVOR: Lancaster, Moses, Croft, Davies, Hudson
OPPOSED: Whitaker, Bunde, Foster, Harris, Williams, Mulder
The MOTION FAILED (5-6).
Representative Croft MOVED to ADOPT Amendment FG-3.
DELETE
Department of Fish and Game
BRU: Administration and Support
Component:State Subsistence
Fund Source Amount
I/A Receipts 538,100
Federal Receipts 2,253,500
Statutory Designated Receipts70,100
EVOSS 369,200
ADD
Department of Fish and Game
BRU: Subsistence
Component:Subsistence
Fund Source Amount
General Funds 224,100
Component:Research and Monitoring
Fund Source Amount
General Funds 924,000
I/A Receipts 497,500
Component:Subsistence Special Projects
Fund Source Amount
Federal Funds 2,253,500
I/A Receipts 40,600
Statutory Designated Receipts70,100
Component:Subsistence EVOS Restoration Projects
Fund Source Amount
EVOSS 369,200
Representative Croft noted that the amendment restores all
general funds to the Division of Subsistence, and transfers
federal and other receipt authority from the Administration
and Support BRU to the Subsistence BRU. The Division of
Subsistence gathers the information that provides the basis
for what is the highest priority use of fish and game
resources. Elimination of the Division would have a most
dramatic effect. Information would be lost. Statutes
identify subsistence as the highest use of fish and game.
The data provided by the Division allows the identification
of resource for sport and commercial fishing and hunting. He
maintained that sport and commercial use would be
jeopardized by the deletion of the Division. He stressed the
affect on the rural/urban divide. He questioned how state
control could return without a Division of Subsistence.
Co-Chair Williams maintained that the federal government
does not listen to the state's recommendations and that
Native foods are being depleted. He pointed out that the
Governor has a bill to address subsistence concerns.
Vice-Chair Bunde thought that the State should "do the least
harm". He pointed out that there are few options for general
fund reductions in the Department's budget. He explained
that reductions were taken from the Division of Subsistence
as the area of least harm. He observed that the Division of
Subsistence retains $3 million dollars in federal funding.
A roll call vote was taken on the motion.
IN FAVOR: Croft, Davies, Foster, Moses
OPPOSED: Whitaker, Bunde, Harris, Hudson, Lancaster,
Williams, Mulder
The MOTION FAILED (4-7).
UNIVERSITY
Representative John Davies MOVED to adopt University #2.
ADD
Department: University of Alaska
BRU:
Component:Unallocated addition/reduction
Fund Source: Amount:
General Fund $5,665,300
Co-Chair Mulder OBJECTED.
Representative Davies explained that the amendment
fully funds the Board of Regents' University of Alaska
FY03 request, which is necessary to pay negotiated pay
increases for university faculty and staff including
those in collective bargaining units. The University's
budget is flat, at last year's level. However, the
University is required to pay $5,665,300 dollars in
salary costs, as an unallocated reduction. This is 7 percent
of the University's initiative money over the last three
years and would prevent the pursuit of new initiatives, such
as business development or additional training for nurses
and teachers. A lack of funding restricts the ability of the
University to function as an economic and academic engine to
add to the state's future. He added that if the economic
downturn continues at the state level and job loses continue
that people will turn to the University for retraining. He
provided examples of situations in which those circumstances
had occurred.
TAPE HFC 02 - 50, Side A
Representative Davies continued his support of the
amendment. He pointed out that the amendment would take away
the mandated, unallocated reduction.
Co-Chair Mulder spoke against the amendment. He spoke to
the size of the financial problem facing the State. He hoped
that the University would be able to work within the level
of funding that they have been provided in the past. He
urged members of the Committee not to support the amendment
and to hold the line on spending.
Representative John Davies stressed that all "other" funds
and federal funds are directed to specific items, such as
tuition receipts or federal research grants. There is
little opportunity to translate that into the general fund
portion of the University's budget. The University usually
leverages $1.4 dollars for each dollar provided. He thought
that a lack of support would have a negative impact on the
ability of the University to raise other funds. The cut is
very "real". The University must have stability within their
program structure. He stressed the need to insulate the
University from the swings of funding inherent in the
appropriation process in order to provide continuity in the
University's delivery of services to students.
Representative Whitaker stated that the amendment is too
small. He expressed fear that if the reduction is accepted
that there would be no impetus for additional funds. He
indicated that he would introduce an amendment for
additional funds at a later time.
Representative Hudson observed that failure to adopt the
amendment would not impact the University's ability to pay
negotiated pay increases.
A roll call vote was taken on the motion to adopt Amendment
UNIV-2.
IN FAVOR: Croft, Davies, Moses
OPPOSED: Bunde, Foster, Harris, Hudson, Lancaster,
Whitaker, Williams, Mulder
The MOTION FAILED (3-8).
Representative Croft MOVED to ADOPT Amendment HSS-11.
RESTORE COMMIUNITY DEVELOPMENTAL DISABILITIES GRANTS
Agency: Health and Social Services
BRU: Substance Abuse and Mental Health Developmental
Disabilities Services
Component: Community Developmental Disabilities Grants
Fund Source: General Fund/MH
Amount: 1072.2
This program administers statewide community-based
services for people who experience developmental
disabilities (DD).
Impacts
• Approximately 133-167 individuals and 300-358
families will lose services.
• For one DD grantee agency in a rural area, 25
families will lose respite care.
• Cuts to vocational programs would cause two job
coaches to be laid off, resulting in the loss of
jobs for 10 individuals with DD. (Job coaches
assist people with DD in maintaining paying jobs in
the community).
• The number of people on the DD waitlist will rise
to an all time estimated high of 2,500. (People
will remain on the list until someone dies or moves
to another state. Only 22 people in FY 01 came off
the DD Waitlist as a result of death or someone
leaving the state.)
• A 5.7 percent reduction to the small rural program
in Nome would translate to a reduction of 1,140
hours of direct care and support services to
consumers, many of who have no primary caregiver
beyond overburdened family members.
Co-Representative Harris OBJECTED.
Representative Croft referred to persons with disabilities
in his district and retold stories of persons involved with
the "Key" campaign. He observed that with support services
disabled persons are able to live on their own in the
community. The reduction from FY02 for the Community
Developmental Disabilities Grant would result in a loss of
133 - 167 individuals from the program. The waitlist would
also be increased. Cuts would cost more in the future due
the institutionalization of these individuals. The
restoration would save both people and money.
Representative Harris acknowledged that it is a $1 million
dollar reduction. He pointed out that the Department of
Health and Social Services' budget is the largest in the
state, taking over 20 percent of the budget and affecting
over 100,000 people. It is a difficult budget to "rein" in.
The department was given the opportunity, with the combining
of BRU's, to maneuver funds. The overall budget is up $200
million dollars in federal funds and $18 million dollars in
general funds.
Representative John Davies stressed that the need is up
about $40 million dollars. An $18 million dollar increase
does not meet the need. He acknowledged that delivery of
health care is an underlying problem. There is an obligation
to figure out how costs are delivered and care given to the
needy. Just cutting the budget does not do justice. The
legislature would need more than one session to deal with
the problem. A triage bandage is not the right solution. The
onerous is on those that need the most help. Another tack is
needed. Work is needed to solve the problem. You can't
change the facts through legislation: you can cut the budget
but you can't cut the disease. Health problems will continue
to exist. This is the most cost effective and humane way to
deal with the problem. There is a trend toward de-
institutionalization.
A roll call vote was taken on the motion to adopt Amendment
HSS-11.
IN FAVOR: Croft, Davies, Moses
OPPOSED: Bunde, Foster, Harris, Hudson, Lancaster,
Whitaker, Williams, Mulder
The MOTION FAILED (3-8).
Representative Croft MOVED to ADOPT Amendment DEC-1.
ADD
Department: Environmental Conservation
BRU: Environmental Health
Component: Food Safety and Sanitation
Fund Source Amount
General Fund $ 218,200
General Fund/Program Receipts 1,260,900
Total $1,479,100
DESCRIPTION: Restore Food Preparation Inspections
Program
This amendment restores the State's Food Preparation
Inspections Program - the public health safety net for
retail food and sanitation aimed at reducing the risk
of food borne illnesses and resultant economic impacts
to businesses and to the tourism and hospitality
industries. This includes the State oversight of all
restaurants, grocery stores, food booths, school
kitchens, day care centers, tattoo parlors, and public
accommodations.
The House Finance Subcommittee proposes elimination of
the program and hopes that all communities statewide
will step up to the plate to provide oversight. Right
now, Anchorage provides most of these services. We
cannot compel other communities to provide these
services. Each community must make a choice. For small
communities with limited facilities, this will be an
expensive choice. For example, Tenakee Springs has 4 of
these facilities, Pelican - 8, Prince of Wales Island,
- 15, Gulkana - 1, Delta Junction - 60, Tok -71, all of
the Haines Borough has just 75. Many of these are
seasonal. Services provided by the state have an
economy of scale, and ensure that Alaskans and our
visitors are not faced with unnecessary public health
risks in any Alaskan community.
Federal funding to the Department of Education and
Early Development for child nutrition programs would be
jeopardized if government (State or local) inspectors
don't inspect the particular facilities' programs.
Oversight of commercially available food is a core
governmental function done to protect public health -
and is something that Alaska has done since before
statehood. Whether the state or local governments
should oversee retail food safety and sanitation of
public facilities is a legitimate public policy debate.
But the debate and the decision need to happen before
these essential services are simply eliminated.
Co-Chair Williams OBJECTED.
Representative Croft explained that the amendment would fund
the people that inspect restaurants. He noted that in the
words of Janice Adair, "Mexico does this." He stressed the
dramatic impact for outbreaks. Bad occurrences could
seriously damage the image of Alaska. He noted that there
have been problems in the state. It could cost a restaurant
$75 thousand dollars and would be severely damaging. The
USDA reimburses for the school lunch programs and adult day
care but they require inspections. He thought that the
school lunch program could be jeopardized. He maintained
that there is no plan for local governments to take over the
program. Even if there were a plan it would be an un-funded
mandate. It is an important aspect of public safety.
Co-Chair Williams agreed with Representative Croft but
emphasized that there is little left to cut [in the
Department of Environmental Conservation's budget]. The
Commissioner suggested that programs be eliminated as
opposed to a thousand cuts. He emphasized that "we can't be
everything to everybody any more." He expressed the hope
that communities would carry on the program.
Representative John Davies pointed out that there is a $1.4
million dollar reduction on a program that generates $1.3
million dollars in program receipts. The reduction to the
fiscal gap would be minimal. He noted that communities have
not been agreeable to taking over the service. He maintained
that the program is more cost effective and works better as
a coordinated program. He suggested a fund source switch to
statutory designated program receipts. Communities should
have more notice if the service is going to be deleted.
Representative Whitaker agreed with Representative John
Davies but stated that he would vote against the amendment.
A roll call vote was taken on the motion.
IN FAVOR: Croft, Davies, Moses
OPPOSED: Bunde, Foster, Harris, Hudson, Lancaster,
Whitaker, Williams, Mulder
The MOTION FAILED (3-8).
HB 403 and HB 404 were Held in Committee.
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