Legislature(1995 - 1996)
03/30/1995 01:52 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 100 "An Act making appropriations for the operating and loan program expenses of state government 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 1 for an effective date." * Note: All amendments are on file with the Legislative Finance Division. DEPARTMENT OF FISH AND GAME Representative Mulder MOVED to RESCIND the Committee's action in adopting Amendment F&G-1 (copy on file). He noted that the amendment would add $81.0 thousand dollars to the Department of Fish and Game, Office of the Commissioner. There being NO OBJECTION, it was so ordered. Representative Mulder MOVED to AMEND Amendment F&G-1 by deleting the funding source of "35.0 thousand dollars from the Department of Health & Social Services, Office of the Commissioner" and inserting "$35.0 thousand dollars from the Department of Fish and Game, Subsistence, Special Projects." Representative Navarre expressed objection to the amendment and suggested that the funding be taken from the budget of the Legislature. Representative Mulder argued in support of Amendment F&G-1. Representative Navarre maintained that the amendment does not fix problems within the Department of Fish and Game. There being NO OBJECTION, the amendment to Amendment F&G-1 was adopted. Representative Navarre MOVED to AMEND Amendment F&G-1 by deleting the funding source of "$35.0 thousand dollars from the Department of Fish and Game, Subsistence, Special Projects" and inserting " $35.0 thousand dollars from the budget of the Legislature." A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Kelly, Navarre OPPOSED: Kohring, Martin, Mulder, Parnell, Therriault, Foster, Hanley The MOTION FAILED (4-7). There being NO OBJECTION, Amendment F&G-1 was adopted as amended. ALASKA COURT SYSTEM Representative Navarre offered an amended Amendment Court-1, add $50.0 thousand dollars from the Alaska Revolving Loan 2 Fund to the Alaska Court System, Trial Courts for anger management (copy on file). Representative Parnell spoke in support of the amendment. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Navarre, Kelly, Martin, Parnell, Foster, Hanley OPPOSED: Kohring, Mulder, Therriault. The MOTION PASSED (8-3). DEPARTMENT OF EDUCATION Representative Martin MOVED to adopt Amendment DOE-9 (copy on file). He explained that the amendment would add $80.0 thousand dollars for the "Alaska Maps for Alaska's Students" project. MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION explained that the funding source would be non-general fund receipts from the University's bookstore. There being NO OBJECTION, it was so ordered. DEPARTMENT OF ADMINISTRATION Representative Brown MOVED to adopt Amendment DOA-6A (copy on file). She explained that the amendment would substitute the "Public Broadcasting Endowment Trust" for the Alaska Public Broadcasting Commission. She emphasized the need to transfer functions to a private non-profit organization for support of the state's broadcasting system. ALISON ELGEE, DEPUTY COMMISSIONER, DEPARTMENT OF ADMINISTRATION stated that the transfer could be made without statutory change. She added that intent language would not be sufficient to allow the Endowment Trust to manage the grants distribution. Representative Kohring OBJECTED. He felt that it was inappropriate to have a separate BRU for a private entity. DIANE KAPLAN, DIANE KAPLAN AND COMPANY spoke in support of the amendment. She gave a brief history of the origin of the Public Broadcasting Trust Endowment. She noted that the Trust commissioners are the major donors to public broadcasting in the State. She emphasized that the members are bi-partisan. The goal of the Trust is to raise an endowment of $100.0 million dollars to replace state funds. 3 In response to a question by Representative Mulder, Ms. Kaplan stated that The Trust would follow guidelines by the Department of Administration for grantees of state dollars. Representative Martin expressed concern that the amendment would amount to a grant to the Trust without competitive bidding. Co-Chair Hanley noted that designated grants are awarded without competitive bidding. Representative Kohring spoke against the amendment. He reiterated that it is not good public policy to provide a grant to a private entity. Representative Brown clarified that the intent is to reduce state contribution over time. She could not define the period of time needed before state contribution could be eliminated. Ms. Kaplan estimated that it would take a minimum of 10 to 15 years to eliminate state funding. In response to a question by Representative Navarre, Ms. Kaplan noted that transfer of the grant authority to the Public Broadcasting Endowment Trust would eliminate an estimated $170.0 thousand dollars in state overhead associated with the management of grants by the Alaska Public Broadcasting Commission (APBC). Representative Kohring noted that the Letter of Intent by the Department of Administration Subcommittee states that sole service radio stations be protected. He emphasized that no seed money will result from a transfer of the management of grants to individual radio stations to the Endowment Trust. In response to a question by Representative Therriault, Ms. Kaplan expounded that savings would result from a transfer to contractual services. She noted the lack of flexibility within the state personnel system. She reiterated that overhead can be reduced. She stated that administrative costs for management by the Alaska Public Broadcasting Commission is estimated at $170.0 thousand dollars. The Endowment Trust estimates that services could be contracted for $50.0 thousand dollars. Representative Mulder expressed concern with a lack of legislative accountability. Representative Kohring echoed remarks made in regards to the lack of legislative accountability. Representative Brown pointed out that the Department of Administration would have some oversight. She emphasized that the Endowment Trust would be before the Legislature for funding in the following year. She suggested that the grant could be issued with the caveats that no sole service stations be closed and no funding be 4 provided to public television to clarify the legislative intention. Representative Brown WITHDREW Amendment DOA-6A, to be considered at a later time. Ms. Kaplan acknowledged the need to provide accountability. She emphasized that the Endowment is requesting the tools to become more self sufficient. She noted that the Alaska Public Broadcasting Commission receives funds and sends them out to stations. She recalled that previous reductions have been across the board. She emphasized the need to ensure service. Representative Kohring stressed that the issue is who is going to oversee the state support to public broadcasting, the Alaska Public Broadcasting Commission or the Public Broadcasting Endowment Trust. He stated that he supports the concept of private support through the Trust. DEPARTMENT OF NATURAL RESOURCES Representative Brown MOVED to adopt Amendment DNR-13 (copy on file). She explained that the amendment would fund the Senior Citizens/Disabled Veterans Tax Relief programs. She emphasized the burden of unfunded mandates to municipalities. The Alaska Revolving Loan Fund would be the funding source. She noted that there is approximately $6.0 million dollars in the Alaska Revolving Loan Fund. Representative Therriault OBJECTED to the motion. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Foster OPPOSED: Kelly, Kohring, Martin, Mulder, Navarre, Parnell, Therriault, Hanley The MOTION FAILED (3-8). (Tape Change, HFC 95-75, Side 1) FRONT SECTION Co-Chair Hanley provided members with a committee substitute for HB 100, Work Draft #9-GH0022\C (copy on file). MIKE GREANY, DIRECTOR, LEGISLATIVE FINANCE DIVISION compared The work draft to the original version of HB 100, Front Section. He noted that Sections 1 - 4 are the same. He noted that Section 5 caps the amount of general fund dollars that can be used to replace a shortfall in federal Title XX funds at $6,310,800 million dollars. Mr. Greany noted that Sections 6 - 10 are identical. 5 Section 11 incorporates an amendment proposed by the Governor. A new Section 11 (c) was added to use the available balance in the Alaska Debt Retirement Fund in order to reduce the need for an additional appropriation for new general obligation debt. Mr. Greany noted that the words "from the balance" was added to Section 13 to clarify the section. Mr. Greany reviewed Section 17. He noted that Section 17 (d) transfers $70.0 million dollars from the Alaska Housing Finance Corporation (AHFC) to the general fund. Section 17 (e) adds transitional language to provide that expenditures allowed in Sections 17 (a), (b) and (c) are subject to the program review requirements of the Legislative Budget and Audit Committee. He emphasized that Section 17 (e) will assure legislative review and oversight during interims. Mr. Greany observed that Section 18 is adjusted to reflect funding recommendations for the Disaster Relief Fund made by the Subcommittee. Mr. Greany clarified that Section 20 (b) should be reduced from "$3,591,300.0 million dollars to "$2,591,300.0" million dollars to reflect action previously taken by the Committee. He observed that $1.0 million dollars was transferred by the Committee from the Oil and Hazardous Substance Release Response Account to the Department of Transportation and Public Facilities for operations and maintenance. He added that a new section is needed to transfer the $1.0 million dollars to the general fund. In response to a question by Representative Therriault, Mr. Greany explained that the appropriation in Section 20 is needed to authorized the transfer of funds from the general fund, where the money is collected, to the Oil and Hazardous Substance Release Response Account for expenditures. Mr. Greany stated that Sections 22 and 23 (b) reflect the cap of the amount collected under Sections 22 (a) and Section 23 (a). Mr. Greany noted that the appropriation of $21,586,500 million dollars in Section 24 reflects the funding level adopted by the House Finance Subcommittee for the Department of Administration, Information Services Fund. Mr. Greany observed that Section 25 reflects the amounts adopted by the House Finance Subcommittee on the Department of Law for oil and gas litigation. He stressed that the funding will not be duplicated in the operating budget of the Department of Law. 6 Mr. Greany commented that Section 29 will be amended to add an additional citation of AS 42.06.285 to include revenue generated by pipeline carriers. Mr. Greany noted that Section 31 incorporates the recommendations of the House Finance Subcommittee on the Department of Transportation and Public Facilities for funding of the Alaska Marine Highway System Fund at $28,263,200 million dollars. Mr. Greany pointed out that Section 32 is identical to FY 95. He observed that repairs to Four Dam Pool facilities are anticipated to be needed for the intertie between Petersburg and Wrangle. The Alaska Energy Authority has submitted a request for $20 million dollars to achieve needed repairs. This appropriation was not included in the Governor's capital legislation. He noted that the Four Dam Pool utilities are considering withholding their debt service payments to the Four Dam Pool Transfer Fund in order to use the money for the repairs. Mr. Greany noted that Section 33 reflects an amendment requested by the Governor to fund $9,097,800 million dollars for the Alaska Clean Water Loan Program. Mr. Greany reviewed Sections 34 and 35. He noted that these sections were originally included in HB 101. Section 34 reflects shared taxes and Section 35 reflects the Salmon Enhancement Tax. Mr. Greany pointed out that Section 36 is a new section. Section 36 rejects the monetary terms of different collective bargaining agreements. He added that the Governor has suggested another section relating to salary adjustments for public safety employees in the amount of $250.0 thousand dollars, $203.6 thousand dollars would be appropriated from the general fund and $46.4 thousand dollars would be appropriated from international airport revenue receipts. Co-Chair Hanley expressed a preference for consideration of the collective bargaining agreements in separate legislation. Representative Navarre noted that if collective bargaining legislation introduced by the House Finance Committee is not acted on then the monetary terms will not be accepted. Co-Chair Hanley stated that it is his intent to hold hearings on the collective bargaining agreements. Representative Brown questioned the need for inclusion of Section 36. Co-Chair Hanley explained that if language 7 contained Section 36 is not included in the operating budget that the collective bargaining agreements would be considered to be approved. Approval of the agreements with out the accompanying funding would require agencies to pay for increases out of their budgets. He observed that this would amount to a $8.0 million dollar unallocated reduction. If the contracts are not approved then negotiations will resume. There was no objections from the committee for introducing separate legislation regarding the collective bargaining agreements. Mr. Greany observed that Section 37 is designed to address the sweep provisions of the Constitutional Budget Reserve. Any funds that were swept into the Constitutional Budget Reserve would be reappropriated and restored to the funds from which they were swept. He noted that Section 37 will preserve the status quo. Representative Brown expressed concern that Section 37 would circumvent the intent of the Constitution. Mr. Greany stated that a constitutional amendment may be needed to allow the State to function. Representative Grussendorf questioned the use of the Earnings Reserve Account of the Permanent Fund. Mr. Greany emphasized that although the Court has indicated the status of the Earnings Reserve Account the status of other accounts such as the Information Services Fund in the Department of Administration is uncertain. Discussion pursued regarding problems associated with the sweep of funds into the Constitutional Budget Reserve Fund. Mr. Greany discussed Sections 38 and 39. He noted that Section 38 would use any money available in the Statutory Budget Reserve Fund. Section 39 clarifies that any additional shortfall would come from the Constitutional Budget Reserve Fund. Mr. Greany noted that Section 40 cites sections which do not lapse. He added that a new section will be added to reflect the Committee's action regarding the Alaska Revolving Loan Fund. Any money appropriated from the Alaska Revolving Loan Fund would first be appropriated to the unrestricted general fund. In response to a question by Representative Martin, Mr. Greany explained that the pass through of shared taxes has been contained in the front section of the operating budget. The appropriation language states that the amount owed for shared taxes is appropriated for that purpose. In addition, specific dollar amounts were estimated in the base of HB 100. Co-Chair Hanley noted that shared taxes will not be 8 included in the base of either FY 95 or FY 96 operating budgets. Representative Mulder MOVED to adopt committee substitute for HB 100, work draft #9-GH0022\C. There being NO OBJECTION, it was so ordered. ANNALEE MCCONNEL, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR discussed concerns of the Governor in regards to the FY 96 operating budget. She acknowledged the need for reductions. (Tape Change, HFC 95-75, Side 2) Ms. McConnel indicated that funding should be restored to some areas of the FY 96 operating budget. She stated that approximately $10 million dollars should be added. She noted that funding for education has not been considered. She addressed areas of concern within the Department of Law and Department of Health & Social Services. She emphasized that reductions to the Office of Public Advocacy are counterproductive. She stressed that the decision to not cover dental care under Medicaid may result in more expensive medical bills. She observed that the failure to address labor concerns can result in more cost to the State in the future. She stated that it does not make sense to take troopers off patrol to transport prisoners in communities were community jails have been closed. She summarized that cutting for numbers sake is not a smart way of cutting. She stressed that short term expenditures now may save significant dollars in succeeding fiscal years. She emphasized that the Administration needs to have tools to manage sizable cuts. She noted that the reduction of key staff to commissioners inhibit the Administration's ability to figure out ways to make significant changes in the delivery of cost effective service for the future and to respond to the Legislature. BRUCE BOTHELO, ATTORNEY GENERAL, DEPARTMENT OF LAW observed that the Department has received mixed signals from the Legislature. He stressed that at the proposed funding level the Department of Law will have to reduce: * 28% of the Civil Division general fund positions; * 31 positions will be eliminated; Attorney General Bothelo noted that 16 attorney positions will be eliminated as follows: * 2 existing attorney positions from Human Services, resulting in a decrease in services in rural Alaska; 9 * 4 positions from Natural Resources, resulting in an increase in response delay for permitting defense; * 1 commercial attorney position which will result in a reduction to occupational licensing enforcement; * The entire Consumer Protection Section will be eliminated; and * 2 Environmental Section attorneys will be eliminated, resulting in the reduction of enforcement and defense of environmental law suits. Representative Parnell questioned how many attorney positions are being eliminated from FY 95. Attorney General Bothelo stated that 13 positions are being reduced from the FY 95 positions. He noted that the Fairbanks's Human Service attorney will be eliminated. He clarified that the attorney represents Children in Need of Aid and juvenile delinquent cases in the Northern Region. He emphasized that the reductions must be distributed through the Department. KAREN PERDUE, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES addressed the area of optional services for Medicaid. She acknowledged that there is a 11 percent growth rate in the Medicaid budget. She emphasized that the growth rate is exceptionally low. She noted there has been no price increase for physicians and dentists for the three years. She expressed concern that the lack of an increase would inhibit access for Medicaid clients. She noted that Medicaid is the insurance program for 85,000 Alaskans. Blind and disabled persons account for half of those receiving Medicaid. She stressed that the denial of adult dental services and optometry services will result in a significant hardship on these individuals. Representative Martin expressed the concern that the Medicaid budget has accelerated. Commissioner Perdue stressed that the State's benefit program is modest. She noted that entitlements have grown as a result of an increased growth rate and the cost of doing business. She pointed out that the program has slowed its growth rate from 20 percent in previous years. Representative Mulder noted that 14 to 15 percent of the State's population is on Medicaid. Commissioner Perdue stressed that the state of Alaska is able to redeem a portion of it's Medicaid costs through the federal Indian Health Services Program. Representative Navarre noted that the State's program is driven by federal changes in eligibility. Commissioner 10 Perdue agreed that federal changes have increased eligibility. Two parent families on AFDC were added to the Medicaid program. Poor persons eligible for Medicare were also added to the program. Alaska also added pregnant women and children up to 133 percent of poverty. She pointed out that only 16 states have not expended service beyond 133 percent toward the 180 percent cap. She noted that there is a 50/50 percent match of state/federal funding. She observed that the State is trying to increase the match. Representative Navarre noted that the federal match used to be 90 percent. He questioned if the Administration has a recommendation to allow for flexibility in covering optional preventive services that would reduce the cost of medical services. Commissioner Perdue stated that the Administration would look at developing a proposal. Representative Navarre suggested that the Administration be given flexibility to address the needs of optional services. Co-Chair Hanley noted that all the needs cannot be served. He questioned if the Commissioner would like the flexibility to discern which options would be prioritized. Commissioner Perdue stated that she would like to discuss prioritizing options. Commissioner Perdue stressed that it is the Governor's philosophy that money can be saved in welfare by increasing child support enforcement and providing jobs through job programs. Commissioner Perdue discussed the Alaska Psychiatric Hospital (APH). She noted that the Alaska Psychiatric Hospital is over staffed for the number of patients and is currently downsizing. She stressed that as state funding is reduced federal funding is reduced by twice the level. She acknowledged that money can be saved but expressed concern that reductions may be too deep. She discussed the effect of reductions to the Alaska Psychiatric Hospital on other local hospitals. In response to a question by Representative Brown, Commissioner Perdue noted the immediate impacts on short- funding APH. She observed that 24 staff positions will be eliminated. This will result in a reorganization of the units. She stressed that patients may have to be diverted. She estimated that the cuts may have to be reduced by $200.0 thousand dollars. DEPARTMENT OF EDUCATION Representative Navarre MOVED to adopt Amendment DOE-10 (copy on file). Representative Mulder OBJECTED. Representative Navarre explained that the amendment would fully fund 11 education. He noted that education funding has not increased to keep up with inflation. He stressed that education is a constitutional priority. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Navarre OPPOSED: Kelly, Kohring, Martin, Mulder, Parnell, Foster, Hanley The MOTION FAILED (3-7). DEPARTMENT OF REVENUE Representative Grussendorf referred to comments by Commissioner Perdue. He noted that his an amendment to increase child enforcement funding by $90.0 thousand dollars failed.