Legislature(2007 - 2008)HOUSE FINANCE 519
03/11/2008 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB54 | |
| SB256 | |
| Adjourn | |
| HB311 | |
| HB54 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 311 | TELECONFERENCED | |
| + | HB 54 | TELECONFERENCED | |
| + | HB 357 | TELECONFERENCED | |
| + | HB 414 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 311
An Act making appropriations, including capital
appropriations, supplemental appropriations, and
appropriations to capitalize funds; and providing for
an effective date.
2:59:51 PM
Vice-Chair Stoltze MOVED to ADOPT work draft 25-GH12007\C,
Kane, 3/8/08 as the version of the bill before the
Committee. There being NO OBJECTION, it was adopted.
Co-Chair Meyer commented that the adopted work draft is a
stripped down version of the Governor's proposed capital
projects including federal funds and associated matches.
It will provide a base capital budget. He noted the Senate
had adopted a companion bill to HB 311. Co-Chair Meyer
invited Ms. Rehfeld to speak to the $42 million dollars
mostly for specified technology (IT) system-wide changes.
3:01:31 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed how the Administration
arrived at the proposed budget. In December 2007, the
Administration rolled out a two year plan, which
anticipated additional expenditures in FY08 to be funded
through the supplemental bills. Additionally, they had
requested the use of FY08 surplus for additional costs
associated with capital projects. Overall, the intent for
the FY09 budget was to keep total General Fund dollars
including the capital & operating expenditures with an
increase over FY08 of about 4.5%.
When the Administration moved through the budget process,
identifying areas that needed change for FY09, including
some "must haves" even though, all of the projects were not
included. There were many projects the Administration
hoped to include in the budget, but simply did not have
adequate General Funds. In FY08, the Administration
requested a total of $34 million General Fund surplus
dollars. She believed the intention was clear and included
th
in the capital budget bill with a June 30 effective date.
The total amounted to $29 million General Fund dollars.
For FY09, there are twenty-seven requested IT projects,
totaling $24 million of which, $2 million of which are
General Fund dollars.
3:05:30 PM
Representative Gara questioned if even though the IT
expenses are necessary, the Administration decided not to
place them in the operating budget because then they could
not meet the 4.5% limit funding for FY09. Ms. Rehfeld
clarified that the 4.5% increase was a benchmark number the
Administration attempted to achieve for FY09 capital and
operating budgets. Additionally, the Administration
requested the use of $34 million dollars from the FY08
surplus.
Representative Gara understood that the Governor was
attempting to reach a 4.5% budget increase projection and
in order to meet that goal was proposing use of funds
outside FY09 dollars. He emphasized that action creates an
artificial budget goal. Ms. Rehfeld countered that the
Administration has attempted to separate the two years in
isolation but rather roll out a comprehensive package
indicating expenditures and savings. She acknowledged that
clearly the Legislature will have opportunities to change
that plan.
3:08:13 PM
Representative Hawker identified the $2.66 million federal
fund sources & the $5.2 million IT funding source services.
He asked where those dollars originated from. Ms. Rehfeld
replied that fund capitalization occurred in the past
Enterprise Technology Services (ETS) fund.
Representative Hawker pointed out that the other funds
had not been reported as General Funds. Ms. Rehfeld
thought it could have originated from other funds used to
pay agency charge-backs. She added that a discussion of
the Information Services Fund (ISF) would require other
testimony. She commented that the capitalization had been
included in the operating budget and that the $5 million is
a General Fund expenditure. Representative Hawker pointed
out that nearly all of the $36.8 million dollars originated
from the General Fund. Ms. Rehfeld agreed.
3:09:54 PM
Co-Chair Chenault asked if the Administration had used the
master lease line of credit to pay for the IT projects.
Ms. Rehfeld deferred that question because the
Administration is not proposing to use that for the budget.
She did not know if it had been used in the past. Co-Chair
Chenault stated that the credit line is an issue currently
on the table and he wanted to know if it was intended to
use for IT projects.
Representative Gara asked if the Governor's proposal to pay
down Teacher Retirement System/Public Employees Retirement
System (TRS/PERS) debt was included in the operating
budget. Ms. Rehfeld responded that in the Administration's
proposal that expenditure comes out of the FY08 surplus.
Representative Gara stressed it is important to make
payment toward that debt and be included in the capital
budget this year. Ms. Rehfeld advised that the plan is to
pay down the TRS portion of the unfunded liability so that
it would reduce the annual contribution by about $43
million dollars. The Alaska Retirement Management (ARM)
Board supports that choice.
Representative Gara questioned if paying down the debt
could save long-term dollars for the State. Ms. Rehfeld
stated the goal is intended to relieve some of the pressure
on the direct contribution by paying down the unfunded
liability. In order to pay it down more quickly, the State
will need to be more aggressive, and some discussed options
are using Pension Obligation (P.O.) bonds.
3:12:49 PM
Co-Chair Meyer stated that HB 311 would be HELD in
Committee for further consideration.
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