Legislature(2017 - 2018)ADAMS ROOM 519
04/03/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB282 || HB284 | |
| HB240 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 284 | TELECONFERENCED | |
| *+ | HB 282 | TELECONFERENCED | |
| + | HB 129 | TELECONFERENCED | |
| += | HB 240 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 282
"An Act making appropriations, including capital
appropriations, and other appropriations; and
providing for an effective date."
HOUSE BILL NO. 284
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
1:38:02 PM
BRIAN FECHTER, POLICY ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, thanked members for the
opportunity to present on the governor's capital budget
request and the Alaska Economic Recovery Act. Mr. Fechter
introduced the PowerPoint presentation: "State of Alaska
FY2019 Capital Budget and Economic Recovery Act Overview"
(copy on file).
Mr. Fechter began with slide 2: "FY2019 Capital Budget." He
explained that the governor put forward two separate
capital appropriation bills in the current session. First,
there was a base capital budget which was very lean
compared to previous years. It only provided enough federal
match to leverage federal funds and certain designated
general fund (DGF) supported energy projects. There were
also some information technology (IT) improvements within
the base capital budget. The second capital appropriation
bill was the Alaska Economic Recovery Act. It was the
governor's "Jobs" act comprised of shovel-ready deferred
maintenance projects designed to get work started
immediately and put Alaskan's back to work. There were many
smaller projects directed towards communities throughout
the state, both urban and rural. This appropriations bill
would be supported by a temporary payroll tax.
Mr. Fechter turned to the chart on slide 3: "Capital Budget
Trend." He pointed out the capital budget had been reduced
93 percent or $1.8 billion from FY 13. It meant that
important needs such as deferred maintenance were being
ignored, and the state was providing less support to
communities. As an example, in 2015 the Anchorage School
District received $20 million in state grants. In 2018, the
district received zero. For Metlakatla, it was $3.0 million
in 2013 and zero for 2018. The story was the same no matter
what community was being looked at. It also impacted
employment. The idea behind the dual capital budgets was to
get capital spending up to a more sustainable level and to
support economic growth. He highlighted the red portion
reflecting the Alaska Economic Recovery act versus the blue
on the chart reflecting the base capital budget.
Mr. Fechter reviewed slide 4: "Base Capital Budget
(SB142/HB284)." The base capital budget was comprised of
$160 million in unrestricted general funds (UGF) which were
matched with designated, other, and federal funds totaling
$1.3 billion. Many of the appropriations would look very
similar. It was a status quo budget from the previous year.
It included another federal match to match the available
federal receipts for a village safe water program, a
federal transportation program, Alaska Housing Finance
Corporation (AHFC) dividend supported housing programs,
energy programs, minor deferred maintenance programs, IT
programs, and a couple of high priority investments that
would be discussed on a future slide.
Mr. Fechter discussed slide 5: "Base Capital Budget." He
reviewed the $70 million in a Department of Transportation
and Public Facilities match which would leverage around
$700 million, a 90/10 match. There was a federal match for
village safe water and sewer projects in the amount of $12
million leveraging $52 million. There was a status quo
housing program from AHFC including health professional and
trooper housing with some capital grant participation
through the federal Housing and Urban Development (HUD)
Administration. A number of energy projects supported by
excess earnings of the Power Cost Equalization (PCE) fund
were new this year. There was $22 million in the capital
program for those projects. Under maintenance, the state
had the Alaska Marine Highway System vessel certification
program that kept its vessels running and got all of the
required work done to safely sail the vessels in revenue
service. There was also a small amount of public building
fund deferred maintenance that was low compared to previous
years.
Mr. Fechter continued that under IT the state was putting
forward a number of software upgrades which, together as a
bundle, would realize an overall savings of 10 percent. In
other words, the state has appropriated 10 percent less
than what they would have reasonably taken to implement the
software solutions. He explained that with the
implementation of the Office of Information Technology, the
administration thought it could come under budget. There
were also two high priority investments; the committee will
receive a letter from his office detailing them. The first
project was enhanced 9-1-1. Outside of Fairbanks,
Anchorage, Mat-Su, and Ketchikan when a person called 9-1-1
they were bounced around to the nearest available dispatch
officer and their location might be difficult to convey
without the enhanced 9-1-1 service. The other priority was
for $1.5 million to go towards AKLNG legal and financial
due diligence. The deliverable item will be a report back
to the legislature about the feasibility of the project.
1:43:52 PM
Mr. Fechter continued to slide 6: "Alaska Economic Recovery
Act (SB140/HB282)." The second capital appropriation bill
was the Alaska Economic Recovery Act. There would be a
temporary wage tax that would be kept at twice the
Permanent Fund Dividend (PFD) and would sunset in 2.5
years. The proceeds of the tax, $800 million over 3 years
and $280 million in the budget being discussed, would be
directed to high-value projects. There were many small
projects instead of a couple of mega projects. The bill was
designed to get work started immediately and not after
years of environmental studies. The school maintenance
appropriation within this budget impacted 60 communities,
both urban and rural. The administration was looking to
have an impact throughout the state. Most importantly, the
bill did not grow government, rather, it took care of
current liability. The idea was that once the tax sunsetted
in 2022, it could be reassessed based on oil prices, the
size of the budget, and revenue selections. It would then
be decided whether to extend the tax.
Mr. Fechter reviewed the graph on slide 7: "Construction
Industry Employment." He noted that the legislation was
important because from August 2013 to August 2017 the
construction industry had lost 3,600 jobs. He read from the
slide:
• According to ISER, $100.0 million in reductions to the
capital budget results in 506 direct and 425 indirect
job losses. (Recall that that $1.8 billion has been
cut from FY2013)
• Ensuring that Alaska has a trained construction
workforce will ensure future development opportunities
employ as many Alaskans as possible (additional North
Slope exploration, AKLNG, etc.)
• Employment figures have a direct link to spending
elsewhere in the budget (Public Assistance, Medicaid,
etc.)
• For each percentage point of job loss, the traditional
Medicaid population grows at an annualized rate of
4.04 percent
Mr. Fechter advanced to slide 8: "Deferred Maintenance." He
reported that the state had a number of deferred
maintenance projects within the Alaska Economic Recovery
Act. The state had a large footprint owning 2,200
facilities including storage sheds and smaller buildings
that a person might not think of as facilities. There were
just over 200 facilities over 10,000 square feet. The total
square footage of space was 19 million square feet. The
state owned many different types of facilities including
classrooms, airports, offices, laboratories, parks, Pioneer
Homes, correctional facilities, and roads.
Mr. Fechter further discussed the backlog of deferred
maintenance on slide 9: "Deferred Maintenance Backlog":
• DM appropriations of $100.0 M annually for 5 years (FY
11-15) has brought the back-log down
• Lean funding since FY 15 is causing the backlog to
grow again
• Without a consistent level of funding, entities cannot
effectively execute planned renewal
• Current level of funding only prioritizes life/safety
concerns
• Failure of building systems is much more costly than
addressing the problem early through deferred
maintenance
Mr. Fechter reviewed slide 10: "Alaska Economic Recovery
Multi-Year Plan." He indicated the chart showed information
about the various projects within the Alaska Economic
Recovery Act. Investment categories included K-12 major
maintenance, University of Alaska (UA) maintenance, and
state deferred maintenance. There was also an appropriation
for the Port of Anchorage that required some municipal
match. He noted some additional highway match funds that
might become available should other states lapse their
federal apportionment. There was also the municipal harbor
facility grant projects, some bulk fuel upgrades, some
Emergency Medical Services (EMS) equipment, the
weatherization program, some AHFC facility maintenance, and
some other assorted housing programs.
1:48:21 PM
Mr. Fechter scrolled through slides 11 - 13. The slides
were for members' reference showing example projects in
some of the categories. He highlighted a few of the
projects on each slide.
Mr. Fechter presented a list of other items on slide 14:
"Other Items":
Alaska Economic Recovery Act
• Municipal Harbor Projects
o Sitka: Crescent Harbor
o Whittier: Small Boat Harbor
o Sitka: Eliason Harbor
o Ketchikan: Bar Harbor North Harbor
o Anchorage: South Float
o Whale Pass: Small Boat Harbor
o Juneau: Douglas Harbor
o Juneau: Harris Harbor
• Bulk Fuel Upgrades
o Statewide Impact
• Weatherization
o State-wide impact
• Senior Citizen Housing Development
• Anchorage Port
o Required Municipal Match
Mr. Fechter highlighted that the impact reverberated
throughout the state.
Mr. Fechter discussed slide 15: "Tax Proposal." He
reiterated that the Alaska Economic Recovery Act was
supported by a temporary wage tax. The slide showed the
impact of the tax proposal in concert with the PFD. The
slide revealed information if the $1,600 proposed dividend
approved by the House Floor remained in place:
• 1.5 percent tax on wages and self-employment income
o Does not tax investments, retirement income,
rental income, etc.
• Tax is capped at $2,200 or twice the PFD ($1,258 * 2=
$2,516), whichever is greater
o Based on a $1,100 PFD, the cap begins at
$146,666/year, If the PFD is $1,600 next year,
the cap begins at $213,333/year
• Targeted to generate $320.0 million
• Without a cap, it would only generate $10.0 million
more
• Including the PFD, most Alaskans will still receive a
net payment from the state
• Out-of-state residents will pay the highest rate
because they do not receive PFDs
Mr. Fechter explained that the majority of Alaskans under
the scenario would still receive a net payment from the
state when taking the tax obligation against the dividend.
The tax cap would begin at $146,000 if the tax was
implemented in the current year based on a PFD amount of
$1,100. In the following year, the cap would begin at
$213,000. The tax proposal would allow the state to
increase the progressivity of the tax by increasing the
dividend because a wealthy Alaskan paying at the cap would
receive $1 for every additional dollar of PFD but would
have to pay $2 in additional taxes. The tax proposal was
targeted to generate $320 million per year. Without the
cap, it only generated $10 million more per year.
Mr. Fechter reviewed the multi-colored chart on slide 16:
"Tax Proposal." He claimed that even after the tax was
implemented, Alaska would remain the lowest tax paying
state in the nation. He concluded his presentation and made
himself available for questions.
Vice-Chair Gara referred to slide 7. He asked about the
notion that for each percentage of job loss, if reversed,
would result in Medicaid use by about 4 percent.
1:51:39 PM
Mr. Fechter responded that Vice-Chair Gara had the
information transposed. He elaborated that every additional
percent of job loss created 4 percent increased annualized
usage of the traditional Medicaid population.
Vice-Chair Gara calculated that a 4 percent decrease in the
use of Medicaid would equal a savings of $25 million in
state money. He indicated that $100 million back into the
capital budget would bring back about 1,000 jobs, according
to the Institute of Social and Economic Research (ISER)
report. He asked how 1,00 additional jobs and $100 million
back into the economy would relate to a 1 percent decrease
in unemployment.
Mr. Fechter replied that the state's workforce was slightly
greater than 400,000 people. For the ease of math 4,000
people would be a 1 percent increase.
Vice-Chair Gara suggested that 1,000 jobs, was not a
1 percent increase. It would not result in a 4 percent
Medicaid decrease. He thought it would be closer to a
1 percent decrease in Medicaid use.
Mr. Fechter responded that the last bullet was a rule of
thumb, not related to construction industry employment.
Vice-Chair Gara referred to slide 5. He was not criticizing
the administration. Every governor since he had been in
office had proposed a village safe water program that was
just the federal money and the required state match. As an
urban legislator, he was frustrated with the idea of
putting the honey bucket into the museum of history, as
proposed by Governor Tony Knowles, which had never
happened. He asked if there was the opportunity to do
something better than what the federal government allowed
the state to do. He was frustrated with the schedule.
Mr. Fechter indicated it was a lean capital budget.
Vice-Chair Gara was curious how many communities with more
than 50 people did not have safe water and safe sewage. He
would speak with Mr. Fechter separately after the meeting.
Representative Wilson referred to information technology on
slide 5. She wondered if any of the upgrades addressed the
public assistance issues the state had experienced. The
state had a dual system resulting in extra processing. She
asked if the state was looking to fix it.
Mr. Fechter deferred to Ms. Pitney.
1:56:19 PM
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, responded that currently the
Department of Public Safety was using two systems. A
portion of the capital request would facilitate moving to
one system for eligibility rather than two. It would
greatly streamline things.
Representative Wilson asked about the AKLNG funding for
legal and financial due diligence in the amount of $1.5
million. She thought $12 million had already been added for
the project. She wondered why the state was spending
additional monies.
Ms. Pitney replied that the funding was for the Department
of Revenue and the Department of Natural Resources rather
than AKLNG. The Department of Natural Resources monies
would be spent towards the royalty in-kind (RIK) / royalty
in-value valuation. The funding would not go to the AKLNG
project. The funds would go to DOR and DNR to do due
diligence and to help determine whether it was in the
state's best interest to participate. The money was
specific to the agencies and not to AKLNG.
Representative Wilson referred to slide 7. She thought it
was difficult to understand the jobs program. There were no
projects listed in the bill. It mentioned grants, but no
particular projects. She asked if most projects went out to
bid to Alaskan and non-Alaskan companies.
Ms. Pitney asked Mr. Fechter to return to the project
listing [slide 10]. She noted that on the OMB website there
was a K-12 major maintenance list showing the priority
projects comprising the $70 million. The list reflected 60
communities. Every project for the University of Alaska
deferred maintenance was listed as well as the projects for
state deferred maintenance. She added that the associated
jobs were private sector jobs. She reported that 95 percent
to 100 percent of the work went out to local construction
companies. Therefore, the money was being kept local.
Representative Wilson indicated that the Port of Anchorage
was an exception. The project was $40 million. She wanted
to see the jobs given to Alaskans. However, she was aware
of the bidding process. She wondered if she had information
about what percentage of projects went to Alaskan
companies. She spoke about work in Fairbanks going to
companies outside of Alaska.
Ms. Pitney responded that during her tenure at the
University she looked at the companies that were awarded
projects over a period of 9 years. She reported that 97
percent of the deferred maintenance projects went to local
or in-state contractors. In Fairbanks, 88 percent of
projects went to local contractors. She agreed that the
Port of Anchorage was the largest project on the list.
However, as large as the project was, it was really a
series of small projects. She thought that over 90 percent,
likely 95 percent, would be in-state hire. The Port of
Anchorage would be the only exception.
Representative Wilson hoped the state, not just the
university, kept track of local company hires. She asked if
the Department of Transportation and Public Facilities
(DOT) kept track. She wanted more information.
Ms. Pitney would get her the information.
2:02:55 PM
Mr. Fechter could provide the information.
Representative Wilson commented about wanting to only hire
Alaskans. She understood there was a process for hiring and
looked forward to receiving the information.
Representative Kawasaki referred to slide 11. He asked how
to know if the projects listed were shovel ready.
Mr. Fechter responded that the projects were prioritized
based on the K-12 major maintenance prioritization list. It
was a recurrent capital project in the capital budget. The
projects that rose to the top of the list were ones that
were ready to go to construction immediately as well as the
highest life, health, and safety need and the various other
requirements under AS 14.10.
Representative Kawasaki referred to slide 13. He asked if
the projects listed on the slide were singled out as part
of the same prioritization as the projects for K-12 major
maintenance.
Mr. Fechter replied that there was an ongoing
prioritization of the state deferred maintenance needs. It
was coordinated by OMB and done at the agency level. For
the purpose of the slide he had chosen some random
examples. It was not in the order of highest need.
Representative Kawasaki referred to slide 11. He wondered
about the local match. He asked if the matches were already
available. For example, did St. Mary's have the money to
match the state's total.
Mr. Fechter indicated Representative Kawasaki was correct.
The major maintenance program required a participating
share. It was on a sliding scale of 5 percent to 35 percent
depending on the taxable property of the average daily
membership of the district.
2:05:27 PM
Representative Kawasaki asked if Mat-Su already had a local
match ready or if the local match would have to go to a
vote.
Mr. Fechter would have to confirm, but he believed the
matching funds had to be on hand to get on the list.
Representative Guttenberg referred to slide 5. He asked
about the first bullet. He wondered if any of the other
projects on that list had any other matches available.
Mr. Fechter responded that it was possible there might be
other small matches. However, the largest pots of match
funding were listed.
Representative Guttenberg asked about the information
technology bullet. He wondered about the automated park fee
collections. He asked if a feasibility study of building
infrastructure had been done for some of the parks farther
out. He asked about cost benefits.
Mr. Fechter believed there were already stations in place
in a limited number of locations. The intention was to add
more stations in more locations. It had been a common
complaint by people who used the state parks, particularly
those in passive management, to be able to pay the fees
with a credit card. They were definitely revenue generating
machines. Sites would be determined based on park traffic
and potential revenue.
2:08:01 PM
Representative Guttenberg did not feel his question was
answered. If a person was at a park in an urban area, all
that was needed was a Square or a slider box. However,
farther out, there was no capacity. He did not have a
problem with automating the system. He observed that when
he pushed the state to improve its broadband
infrastructure, he was told it was not the state's job. He
suggested that by enhancing broadband, many other places
would benefit. He thought there was a lack of coordination
and understanding in the governor's office about what
needed to be done.
Vice-Chair Gara agreed with the governor about cutting the
budget without adopting a fiscal plan, which was costing
jobs. He was somewhat angered that the state was in its
current situation. He appreciated the governor's efforts.
He had discussed rural safe water. Another issue he had was
on slide 10 of the presentation. He understood the state
did some homelessness prevention funding through the Alaska
Housing Finance Corporation (AHFC). He asked if any of the
community needs housing investment money was aimed at
addressing the state's homelessness problem.
Mr. Fechter indicated that perhaps indirectly the
supplemental housing development program was aimed at
increasing the low-income housing stock. Some homeless or
near-homeless people would benefit from increasing the
public housing stock in the state. However, they were not
direct grants to homeless shelters or support to homeless
shelters.
Vice-Chair Gara responded that homeless shelters were not
the only way to address the homelessness problem. He was
interested in a capital budget that addressed the
homelessness problem. He understood that it was difficult
to address the issue without funding.
Representative Grenn referred to page 9 regarding the
deferred maintenance backlog. He asked what the future
would look like without a consistent level of funding or
with continuing to do only the minimum. He wondered how the
number would grow over the next 5 years to 10 years.
Mr. Fechter responded that the future would look like the
past. Fiscal Year 2012 was a high point for deferred
maintenance after ignoring the problem for a number of
years. The cost ticked up and up reaching about $2.5
billion. It took a concerted effort and the state regularly
choosing to make the investment to effectively execute a
deferred maintenance program. The small uptick in FY 18
could be expected to accelerate. He thought FY 22 or FY 23
could look similar to FY 12 in the chart.
Representative Grenn did not feel deferred maintenance
received enough attention. It was not sex but vital to cost
savings and job creation. He was interested in seeing any
information regarding the following 5 years.
Mr. Fechter replied, "Absolutely."
2:13:19 PM
Representative Pruitt relayed that his first question
related to the base capital budget and high priority
investments. He wanted to know exactly where the money was
coming from. He thought that that it was a combination of
seismic funds and possibly general funds. He asked for
clarification.
Mr. Fechter replied that it was a redirection of the
seismic budget request. There were a number of related
re-appropriations.
Representative Pruitt asked why there had been a shift in
seismic funding.
Mr. Fechter deferred to Ms. Pitney.
Ms. Pitney replied that when the administration requested
seismic area work be done in partnership with other
entities, the timing seemed appropriate. Upon further
investigation, the administration had determined that the
timing was not quite right. She suggested that it would be
better for the work to be done in the following fiscal
year. The partnership piece that would have made the
request time sensitive was not in place. The two primary
sources of funding for seismic work was the Alaska
Industrial Development and Export Authority (AIDEA)
dividend and the general fund.
Representative Pruitt asked about the $1.5 million slated
for the AKLNG project. He noted that Alaska had something
similar to a "fee for service" model. If there was a cost
to the state, Alaska's industry partners paid in some
capacity. He spoke of the Alaska Gas Development
Corporation (AGDC) and the state being forced, at times, to
expend money in the process leading up to construction and
afterwards. He wondered if AGDC should have to pay its
share. He suggested that AGDC pay the $1.5 million.
Ms. Pitney answered in the affirmative. Alaska Gasline
Development Corporation was paying for the permitting
process out of its budget. The money being discussed was
not to fund AKLNG. Rather, it was to fund the Department of
Revenue and the Department of Natural Resources to look at
the project from the state's best interest perspective. She
mentioned deciding between royalty in-kind versus royalty
in-value. She continued that DOR would also present on what
was best for the state. The legislature would make the
final decision about the investment.
2:19:04 PM
Representative Pruitt asked about the Alaska Economic
Recovery Act. He asked about the yearly start-up cost
associated with the tax.
Mr. Fechter thought it was around $15 million to start-up
the tax and approximately 40 positions would be added
consisting of full and part-time staff for tax season.
Representative Pruitt wondered if it was the
administration's intent to ask for an extension in 3 years.
Mr. Fechter thought that is was clear that the governor
wanted an ongoing revenue measure to close the budget gap.
Representative Pruitt asked if Mr. Fechter thought it was
disingenuous to have a sunset date on the bill.
Mr. Fechter replied that there were competing points of
view. There was the point of view that oil would save the
state. Another perspective was that Alaska was in a new
world with low-price oil or lower-for-longer priced oil. If
oil prices were at $90 per barrel at the end of 3 years,
the state could celebrate, and the tax could sunset. If oil
prices were in the $50-$60 range, there would still be a
budget gap.
Representative Pruitt did not think that oil could
necessarily save Alaska. However, there were many people
that thought the state could be making different decisions.
He suggested asking why people have asked their legislators
not to support the current budget. He thought the responses
would be because their PFD was too low or that their
government was too large. He did not approve of the term,
"differing points of view" or that oil would save the
state. Oil was an important piece, but there was more to
the picture.
2:22:51 PM
Co-Chair Foster was looking at some of the life, safety,
and health related projects. He was glad to see there were
a number of projects in the base capital budget that fell
under that category. He highlighted several items from the
list. He asked Director Pitney to describe her thought
process concerning how she prioritized putting the budget
together. He had broken down the list into four categories:
life, safety, and health; leveraging of federal funds;
deferred maintenance; and other. He asked because as the
House moved forward and as projects were added, he wanted
to have a better sense of the type of projects the
administration would support. He thought all would agree
that life, safety, and health would be at the top. He was
asking because he wanted to have a better sense of which
type of projects were important in the administration's
view.
Ms. Pitney responded that state first went with the federal
match. The federal match had two main components:
transportation and village safe water. Another area of
match was in health and social services for IT projects.
She noted that the transportation match was 90/10. She
continued that housing items having to do with life,
health, and safety were put in the main budget. Some less
direct service components of housing were in the Alaska
Economic Recovery Act budget. Some deferred maintenance had
been moved into the Alaska Economic Recovery Act budget.
The administration could size deferred maintenance. The
administration's approach was to size deferred maintenance
on a large scale to get a significant number of projects
done and focus on the economy. There were high priority
investments such as the enhanced 9-1-1 project. The
administration had placed the early study for the project
in the operating budget. The Department of Public Safety
(DPS) moved their due-diligence up making the 9-1-1 project
more shovel-ready. The project met some of the state's
public safety goals and addressed health and safety across
the state. The appropriation was small in comparison to the
number places the project would affect. She reported that
the two small deferred maintenance items placed in the base
capital budget were the DOC upgrades in Bethel due to a
recent break out and the Pioneer Homes. The remainder of
projects were placed in the Alaska Economic Recovery Act
bill. The base capital budget was comprised of items that
were in the budget annually. The bigger investments in
deferred maintenance were in the Alaska Economic Recovery
Act.
Representative Wilson asked why there was a supplemental
capital budget. She highlighted $6 million UGF and $8.1
million in other state funding.
Mr. Fechter explained that the $6 million appropriation was
for the Alaska Marine Highway System (AMHS) vessel
certification. He thought $8 million had to do with a
settlement with Volkswagen.
Representative Wilson asked if the administration knew
about the AMHS vessel certification and intentionally left
it out of the budget.
Mr. Fechter responded that there were a number of factors
at play. He recalled that the M/V Tustumena had issues that
caused it to be in layup and needed a significant amount of
work. As a result, AMHS burnt through a large portion of
its current year certification dollars. Additionally,
certification budgets had been very lean for the past
several years. Historically, the system had received $3
million - $4 million of deferred maintenance money in
addition to $12 million - $13 million in certification
monies. Between the two figures, it fully funded the
system's maintenance needs for the year. The request was
generated because of lean deferred maintenance budgets,
significant additional overhaul expenses associated with
the M/V Tustumena, and the aging of the fleet.
2:28:39 PM
Representative Wilson asked if the $6 million would come
out of the FY 18 or FY 19 budget if it was not approved in
the supplemental request.
Mr. Fechter responded that if the $6 million was not
approved, the department would not have additional
flexibility in the current year, and it would have to push
its bills out into July 1. The department would encounter
the same problem in the following year.
Representative Wilson asked if the committee would be
having another session to go through the projects in more
detail rather than in a high-level overview.
Co-Chair Foster liked her suggestion and thought something
could be put together.
Representative Tilton referred to the wage tax budget and
the Code Blue Project. She reported that over the past 5
years, the project request had been $500,000 every year.
There was a request of $1 million in the current year which
returned to $500,000 the following year. She asked why.
Ms. Pitney responded that the administration looked at
their significantly large priority list. The administration
thought that the additional $1 million would help to
address some of the highest priorities on the list rather
than shifting them to future years.
2:31:10 PM
Vice-Chair Gara commented that 4 years prior the capital
budget was much higher. He had heard that a lack of capital
projects would result in a greater number of job losses
into the future. He asked if there was a lingering effect
of money still on the street through earlier capital
budgets. He wondered about future job losses if the state
did not adjust the capital budget.
Ms. Pitney confirmed that the state had largely used the
money in the pipeline from FY 12 - FY 14 in high capital
budget years. The projects associated with those budget
years were currently being completed. The state was moving
into the low capital budget years. The state was fortunate,
under the base capital budget, that the state had
maintained the transportation funding. She reported that it
was largely the community projects that had dwindled. She
relayed an example. She thought it was difficult to
quantify, but OMB monitored the state's spending on capital
projects on an annual basis. The state had remained
relatively steady. However, she anticipated that in the
following year there would be a reduction in spending of
about $100 Million to $200 million for capital projects. It
was difficult to predict how the circumstances would
manifest themselves. She relayed that the administration
anticipated an additional downturn in the economy.
Co-Chair Foster thanked Mr. Fechter and Ms. Pitney.
HB 282 was HEARD and HELD in committee for further
consideration.
HB 284 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 129 Sectional Analysis ver J 2.18.2018.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 129 |
| HB129 Additional Document-ACS FY18 Q2 Collections Memo 2.5.18.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 129 |
| HB 129 Summary of Changes ver D to J 2.18.2018.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 129 |
| Capital Budget and Economic Recovery Overview (House Finance) -.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 282 HB 284 |
| HB 240 CS WORKDRAFT vD.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 240 |
| HB240 Explanation of Change ver D 3.28.18.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 240 |
| HB240 Sectional Analysis ver D 3.28.18.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 240 |
| HB 240 Supporting Document News Article 4.3.18.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 240 |
| HB 240 Supporting Document NASHP Response.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 240 |
| OMB Responses to 4-3-18 HFIN Meeting.pdf |
HFIN 4/3/2018 1:30:00 PM |
HB 284 HB 282 Overview Response OMB |