Legislature(1993 - 1994)

01/27/1993 01:30 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                        January 27, 1993                                       
                            1:30 P.M.                                          
                                                                               
  TAPE HFC 93 - 11, Side 1, #000 - end.                                        
  TAPE HFC 93 - 11, Side 2, #000 - end.                                        
  TAPE HFC 93 - 12, Side 1, #000 - #600.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Ron Larson called the  meeting of the House Finance                 
  Committee to order at 1:30 P.M.                                              
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Larson                    Representative Brown                      
  Co-Chair MacLean                   Representative Foster                     
  Vice-Chair Hanley                  Representative                            
  Grussendorf                                                                  
  Representative Hoffman             Representative                            
  Navarre             Representative Parnell                                   
  Representative Therriault                                                    
                                                                               
  Representative Martin was not present for the meeting.                       
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative Olberg; Major  General Hugh  L. Cox III,  The                 
  Adjutant General,  Commissioner, Department of  Military and                 
  Veterans  Affairs;  Jeff Morrison,  Director, Administrative                 
  and Support  Services Division,  Department of  Military and                 
  Veterans  Affairs; Thomas  A.  Mala, MD,  MHP, Commissioner,                 
  Department  of Health  and  Social  Services; Janet  Clarke,                 
  Director, Division of Administrative Services, Department of                 
  Health and Social  Services; Deborah Wing, Director,  Family                 
  and  Youth  Services,  Department   of  Health  and   Social                 
  Services;  Edgar  Blatchford,  Commissioner,  Department  of                 
  Community &  Regional Affairs;  Remond Henderson,  Director,                 
  Division of Administrative Services, Department of Community                 
  and Regional Affairs;  Bruce Geraghty, Deputy  Commissioner,                 
  Department  of  Community  and  Regional  Affairs;   Michael                 
  Cushing, Research Analyst,  Municipal and Regional Division,                 
  Department of  Community and  Regional Affairs; John  Walsh,                 
  Deputy Director,  Rural Development Division,  Department of                 
  Community and Regional Affairs; Representative Ed Willis.                    
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  HB 55     FY 94 OPERATING BUDGET & LOAN PROGRAMS                             
  HB 56     APPROP:  FORMULA/MANDATED PROGRAMS; LEASES                         
                                                                               
            OVERVIEWS:     Military & Veterans Affairs                         
                                                                               
                                1                                              
                                                                               
                                                                               
                           Health & Social Services                            
                           Community & Regional Affairs                        
  HB  55 FY 94 OPERATING BUDGET & LOAN PROGRAMS                                
                                                                               
  DEPARTMENT OF MILITARY AND VETERANS AFFAIRS                                  
                                                                               
  MAJOR GENERAL HUGH L.  COX, ADJUTANT GENERAL,  COMMISSIONER,                 
  DEPARTMENT  OF MILITARY AND  VETERANS AFFAIRS,  provided the                 
  Committee  with  a  handout  addressing  the  Department  of                 
  Military  and  Veterans  Affairs  (DMVA)  proposed   budget.                 
  [Attachment #1 -on file].                                                    
                                                                               
  He   pointed   out    that   the   Alaska   Statutes    list                 
  responsibilities of the Department.                                          
                                                                               
       *    To provide trained and  equipped military units to                 
            respond to federal or state emergencies.                           
                                                                               
       *    To  develop emergency  response  plans and  assist                 
            individuals  and local  governments to  respond to                 
            and recover from disasters - Division of Emergency                 
            Services.                                                          
                                                                               
       *    To  expand  and  improve  the  status  of   Alaska                 
            veterans  and  coordinate  veterans  programs  and                 
            issues - Division of Veterans Affairs.                             
                                                                               
  Commissioner Cox told the Committee  that the key challenges                 
  facing  the  Department  are associated  with  philosophical                 
  factors.  A major element of the DMVA general fund budget is                 
  the maintenance of National Guard  facilities.  The Division                 
  of Emergency Services  is challenged to sustain  its current                 
  level  of public protection, disaster relief assistance, and                 
  emergency response  services in  the face  of recent  budget                 
  reductions.   The Division of Veterans Affairs is faced with                 
  a growing and aging population of Alaskan veterans, who will                 
  be needing increased  assistance in  order to receive  their                 
  federal entitlement.                                                         
                                                                               
  The Department  has established  a  priority budget  setting                 
  process:                                                                     
                                                                               
       *    A  key  feature  has  been  to  keep  the  State's                 
            contribution   to   the   Alaska  National   Guard                 
            approximately the same level as it was in FY 93.                   
                                                                               
       *    Any reduction in the level of State funded support                 
            would jeopardize the very existence of some Alaska                 
            National Guard  units spread throughout  the State                 
            in 109 communities.                                                
                                                                               
                                                                               
                                2                                              
                                                                               
                                                                               
       *    Any reductions  to the  DMVA's budget,  therefore,                 
            need to come from other department BRU's.                          
                                                                               
  General Cox continued  page by  page discussion of  document                 
  Co-Chair  MacLean questioned  the increase to  the Hazardous                 
  Substance Release Fund from the 470  Fund.  Commissioner Cox                 
  explained  the  increase  to the  470  Fund  would establish                 
  response  depots,  appropriately   equipped  so  that  first                 
  responders to all hazardous materials be contained.                          
                                                                               
  Co-Chair  MacLean  asked if  the  State should  contract for                 
  maintenance to the facilities.                                               
                                                                               
  JEFF   MORRISON,   DIRECTOR,   DIVISION  OF   ADMINISTRATIVE                 
  SERVICES,  DEPARTMENT  OF  MILITARY  AND  VETERANS  AFFAIRS,                 
  stated that janitorial and custodial services are contracted                 
  out although  the Army  Guard has a  program for  preventive                 
  maintenance  funding  that  it is  more  efficient  and cost                 
  effective to operate.                                                        
                                                                               
  Co-Chair  MacLean asked  how  much  has  been spent  on  the                 
  Disaster Relief Fund to date.  Mr. Morrison stated that from                 
  the  $2.9  million dollars,  $1.3  million dollars  has been                 
  obligated for disasters  in this fiscal  year.  The  current                 
  balance  in that  fund  is $1.6  million dollars.   Co-Chair                 
  MacLean  asked  if DMVA  plans  to  ask  for a  supplemental                 
  appropriation.  Commissioner  Cox stated it would  depend on                 
  what happens this winter given the heavy snowfall.                           
                                                                               
  Representative  Brown  questioned  if  the  response  depots                 
  should be modified.  Commissioner Cox agreed they should and                 
  that the State  should not duplicate any  equipment in those                 
  most vulnerable areas.                                                       
                                                                               
  Representative  Foster questioned  the proposal  which would                 
  terminate the  death gratuity.   Major  General Cox  replied                 
  that  the major thrust of the Department  is to reach out to                 
  rural Alaska.  Veterans in rural Alaska do not receive those                 
  services, so the increase in  the Veterans Service Officer's                 
  program effect  them.   Representative Foster  asked if  the                 
  program would generate more federal money.  Commissioner Cox                 
  replied that the return  to the Alaskan veterans will  be in                 
  education benefits.                                                          
                                                                               
  Co-Chair Larson agreed  that the veteran services  should be                 
  increased and expressed concern with  the termination of the                 
  death gratuity.  He asked if there would be federal benefits                 
  to compensate for any lost State benefits.  Commissioner Cox                 
  replied  that  the  veterans  who  are entitled  to  federal                 
  benefits  receive  a  burial  allowance  and the  number  of                 
  veterans who receive this is twenty percent.                                 
                                                                               
                                3                                              
                                                                               
                                                                               
  Representative  Therriault   noted  his  concern   with  the                 
  emergency response depots.  He  questioned if the Department                 
  of Environmental Conservation (DEC)  also has responsibility                 
  for the depots.   Major General Cox stated that  the amounts                 
  in the FY 94 budget have been negotiated with DEC.                           
                                                                               
  Representative Larson  noted  the  DMVA  subcommittee  would                 
  consist of  Chair  Representative Foster  and  with  members                 
  Representative Kott,  Representative Mulder,  Representative                 
  Willis and Representative Hoffman.                                           
                                                                               
  (Tape Change, HFC 93 - 11, Side 2).                                          
                                                                               
  DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                     
                                                                               
  THEODORE  A.  MALA,  MD, MPH,  COMMISSIONER,  DEPARTMENT  OF                 
  HEALTH  AND SOCIAL  SERVICES,  provided the  Committee  with                 
  handouts.  [Attachments #2  - #4 - on file].   He noted that                 
  the Department of  Health and Social Services  (DHSS) is one                 
  of the  largest  departments in  the  state.   The  proposed                 
  budget for FY 94 including the federal match is $756 million                 
  dollars.  General funds total $429 million dollars.                          
                                                                               
  Commissioner  Mala provided  an  overview of  Attachment #3.                 
  The Division of  Public Assistance (DPA) is  responsible for                 
  the Administration of the following programs:                                
                                                                               
       *    Aid to Families with Dependent Children (AFDC)                     
       *    Food Stamps                                                        
       *    Medicaid                                                           
       *    General Relief Assistance                                          
       *    General Relief Medical                                             
       *    Energy Assistance                                                  
       *    Adult Public Assistance                                            
       *    Alaska Work Program                                                
       *    Permanent Fund Dividend Hold Harmless                              
       *    Alaska Longevity Bonus Hold Harmless                               
                                                                               
  If  the  programs do  not  continue  to be  tied  to federal                 
  standards, the State will suffer heavy fines.                                
                                                                               
  Representative Brown asked if there  would be a supplemental                 
  request for foster care for the current year.   Commissioner                 
  Mala stated that foster care is very expensive and the rates                 
  of reimbursement vary according to need.                                     
                                                                               
  JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,                 
  DEPARTMENT OF HEALTH  AND SOCIAL  SERVICES, stated that  the                 
  Department will be  seeking a supplemental  for FY 93 for  a                 
  number of circumstances.                                                     
                                                                               
                                                                               
                                4                                              
                                                                               
                                                                               
  Representative  Navarre  suggested  that  the problems  with                 
  foster   care  has  originated   from  the   foster  parents                 
  experience   of  not   receiving   substantial  or   correct                 
  information regarding their foster child.                                    
                                                                               
  Representative Navarre asked  if the  funds placed into  the                 
  capital budget last year for computer coordination were used                 
  for  that  purpose.    Commissioner  Mala replied  that  the                 
  computers were  ordered and  then sat  in boxes  for a  long                 
  period of time  until the  Department of Administration  was                 
  notified.  Ms.   Clarke  added  that   compliance  with  the                 
  Information  Management  Program  was required  and  delayed                 
  action until September, 1992.                                                
                                                                               
  Representative  Navarre  asked  if the  purchased  computers                 
  would be placed into the outlying areas.                                     
                                                                               
  DEBORAH   WING,  DIRECTOR,   FAMILY   AND  YOUTH   SERVICES,                 
  DEPARTMENT OF HEALTH  AND SOCIAL SERVICES, stated  that some                 
  of the computers  were slated for  the rural areas and  they                 
  are beginning to receive computers at  this time.  The delay                 
  was caused by  a price  fluctuation in computer  costs.   No                 
  computers  will be  issued to  the larger regions  where Ms.                 
  Wing felt there is a greater need.                                           
                                                                               
  Representative Navarre  asked if the  Information Management                 
  System  could  result in  a  reduction  of paper  work.   He                 
  pointed out his concern that too much time is spent on paper                 
  work and not  enough on client services.   Commissioner Mala                 
  echoed Representative Navarre's concern.  There is currently                 
  a "paper  work reduction  committee" working  on systems  to                 
  reduce the  amount of  paper work.   Representative  Navarre                 
  recommended that more  computers be purchased in  order that                 
  state currently working  for the Department can  become more                 
  proficient in their work.                                                    
                                                                               
  Co-Chair Larson asked if  the passage of HB 65  would relate                 
  to the proposed budget.  Ms. Clarke stated it would.                         
                                                                               
  Co-Chair  Larson  inquired if  any  of the  federal mandated                 
  programs  would provide the Department relief.  Commissioner                 
  Mala noted that the Department  is studying the programs and                 
  then proposing a set of waivers for Public Assistance.                       
                                                                               
  Co-Chair Larson noted  that the  DHSS subcommittee would  be                 
  Chaired   by   Representative   Hanley   and  with   members                 
  Representative    Toohey,    Representative    Gary   Davis,                 
  Representative Nordlund and Representative Brice.                            
                                                                               
  (Tape Change HFC 93 - 12, Side 1).                                           
                                                                               
  DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS                                 
                                                                               
                                5                                              
                                                                               
                                                                               
  EDGAR BLATCHFORD, COMMISSIONER, DEPARTMENT OF COMMUNITY  AND                 
  REGIONAL  AFFAIRS  (DCRA),  provided the  Committee  with  a                 
  handout.  [Attachment #5 - on file].                                         
                                                                               
  Commissioner  Blatchford  noted that  DCRA  is the  smallest                 
  Department in the State  and the Department which  has taken                 
  the biggest  cut in  personnel and  budget in  the past  two                 
  years.   The functions of DCRA is to bring government to the                 
  people  and  to be  more efficient  in  the delivery  of the                 
  services.                                                                    
                                                                               
  Commissioner Blatchford  pointed out  that DCRA  is a  small                 
  Department with three divisions:  The Municipal and Regional                 
  Assistance   Division;   the   Division  of   Administrative                 
  Services;  and   the   Division  of   Community  and   Rural                 
  Development.                                                                 
                                                                               
  REMOND  HENDERSON,  DIRECTOR,  DIVISION   OF  ADMINISTRATIVE                 
  SERVICES, DEPARTMENT  OF  COMMUNITY  AND  REGIONAL  AFFAIRS,                 
  stated  the Department has  been targeted with  a $5 million                 
  dollar reduction.   The  total general  funds available  for                 
  reduction were $113 million dollars.  He added that seventy-                 
  three  percent  of  all  funds in  the  Department  are  for                 
  municipal assistance and revenue sharing.  Eighteen  percent                 
  are for child care and Project Head Start.                                   
                                                                               
  In order to  arrive at  a $5 million  dollar reduction,  the                 
  Homeowners Property Tax Exemption Program will be eliminated                 
  and made  a  local option.   Organizational  grants will  be                 
  deleted  and transferred  to capital requests.   There  is a                 
  proposed reduction of $100 thousand  dollars to Alaska Legal                 
  Services.  An additional $500 thousand dollars will be taken                 
  from the Day Care  Assistance Program.  Mr.  Henderson added                 
  there  will be  a  small increase  to  program delivery  and                 
  administration.                                                              
                                                                               
  Mr.  Henderson  discussed  the  trnasfer  of  organizational                 
  grants  to  the capital  budget.   Co-Chair  Larson inquired                 
  which  areas  would be  affected by  the  fund switch.   Mr.                 
  Henderson  stated  in  FY 94,  there  would  have  been $200                 
  thousand dollars budgeted  for an  organizational grant  for                 
  second  year  funding  for  Yakutat.   There  are  no  funds                 
  included for those not  yet incorporated boroughs.    A list                 
  will be provided to the Committee.                                           
                                                                               
  Representative  Foster questioned  if  there were  financial                 
  outreach services  to  increase  recovery.    Mr.  Henderson                 
  replied  there  are  local  government  specialists  in  the                 
  regional  field  offices  which   work  directly  with   the                 
  communities in  areas  such as  tax  information,  providing                 
  accounting services and budgeting services.                                  
                                                                               
                                6                                              
                                                                               
                                                                               
  Representative Foster asked if there would be new boundaries                 
  established within the Commission.                                           
                                                                               
  BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY                 
  AND REGIONAL AFFAIRS, stated there would be four annexations                 
  approved by the local Boundary  Commission:  Hoonah, Haines,                 
  Cordova and Palmer.                                                          
                                                                               
  Representative Foster  asked for further information  on the                 
  road   planning  component   of   DCRA's  budget   proposal.                 
  Commissioner  Blatchford stated  that  DCRA  is an  advocacy                 
  agency which seizes initiatives.  Mr. Geraghty explained the                 
  initiatives of the  Department are  to coordinate the  State                 
  revenues through a delivery system to rural Alaska.                          
                                                                               
  Representative  Parnell inquired  about  the  impact of  the                 
  proposed reduction  to Alaska Legal  Services.  Commissioner                 
  Blatchford stated there would  be no impact to DCRA  only to                 
  Alaska Legal Services.                                                       
                                                                               
  Co-Chair Larson asked  if local  governments would have  the                 
  option  to  reduce  senior citizen  funding  to  zero.   Mr.                 
  Geraghty stated that concern would be addressed in HB 66.                    
                                                                               
  Co-Chair Larson inquired if the large reduction to municipal                 
  assistance and revenue  sharing would be compensated  for in                 
  the budget.  Commissioner Blatchford  replied that DCRA does                 
  make recommendations to  the Governor  and OMB on  municipal                 
  assistance  and  revenue  sharing  and  currently  there  is                 
  discussion ongoing which could minimize the impact.                          
                                                                               
  Representative  Brown  referenced  the Day  Care  Assistance                 
  reduction.  She pointed out the  shortform shows a reduction                 
  of $989 thousand dollars and  asked for further information.                 
  Mr. Henderson responded the larger  amount included the $390                 
  thousand dollar reduction  taken in FY  93.  He pointed  out                 
  there are currently  less children  enrolled in the  program                 
  than  there were  in FY  93.   The Department  is trying  to                 
  access what has  driven the costs  up.  Day care  assistance                 
  rates have risen fifteen percent.                                            
                                                                               
  Representative Foster thanked Commissioner Blatchford on the                 
  Department's work on the Community Development Quota Program                 
  (CDQ).                                                                       
                                                                               
  MICHAEL CUSHING,  RESEARCH ANALYST, DEPARTMENT  OF COMMUNITY                 
  AND  REGIONAL  AFFAIRS,  stated  that  a  program  is  being                 
  implemented to  deal with  fish  taxes.   This program  will                 
  include  implementation  of HB  456,  passed two  years ago,                 
  sharing  fifty   percent  of   the  taxes   back  with   the                 
  municipalities.    The  new  program  will  take  the  taxes                 
                                                                               
                                7                                              
                                                                               
                                                                               
  collected outside the municipalities and share fifty percent                 
  of  it  back  to  communities   around  the  State  who  can                 
  demonstrate  an impact from  the fishing industry.   Half of                 
  those taxes are estimated to total $1.5 million dollars.                     
                                                                               
  Co-Chair  Larson  noted  that  the  Community  and  Regional                 
  Affairs  Subcommittee  would  be  Chaired by  Representative                 
  MacLean with members  Representative Olberg,  Representative                 
  Williams,  Representative  Bettye  Davis and  Representative                 
  Brice.                                                                       
                                                                               
  Commissioner Blatchford asked to  provide the Committee with                 
  a short  explanation of the  CDQ Program.   He noted  that a                 
  $300  thousand dollar  investment by  the State in  the past                 
  year, returned  $20 million  dollars to  the communities  in                 
  Western Alaska.                                                              
                                                                               
  JOHN  WALSH, DEPUTY  DIRECTOR, COMMUNITY  RURAL DEVELOPMENT,                 
  DEPARTMENT  OF COMMUNITY  AND REGIONAL  AFFAIRS, provided  a                 
  basic  overview of the CDQ Program.  The fish is pollack and                 
  represents the  largest bio-mass  per specie  of the  ground                 
  fish resource  in the  Bering Sea.   It  is a  Seattle based                 
  fishery.                                                                     
  The profit sharing arrangements are  multiple to the village                 
  corporations.  An agreed  upon value per ton can  be brought                 
  back to a region for a fishery development project.                          
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:25 P.M.                                           
                                                                               
                                                                               
                                8                                              

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