Legislature(1995 - 1996)

03/30/1995 01:52 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  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.                                                                      

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