Legislature(2011 - 2012)SENATE FINANCE 532
02/16/2012 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB161 || SB162 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 160 | TELECONFERENCED | |
| += | SB 161 | TELECONFERENCED | |
| += | SB 162 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE BILL NO. 161
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, amending
appropriations, and making reappropriations; and
providing for an effective date."
SENATE BILL NO. 162
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
9:06:48 AM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed the Operating Budget
amendments. She declared that the Operating Budget totaled
$19,434,600; of that, $12,542,400 was Unrestricted General
Funds, $5500 in Designated General Fund, $1.8 million in
other funds, and $5.047 million in federal funds. She
stated that some of the items would reflect some
supplemental requests: the Judicial Retirement System past
service costs of $3.7 million, capitalization of the Trauma
Care Fund of $2 million, reduction in debt service due to
refinancing of $2.1 million, and an operating request for
the Alaska Land Mobile Radio (ALMR) Emergency Response
System of $1.5 million. She stated that there were some
technical corrections and transfers related to the
executive order moving the Hearing and Appeals Office from
the Department of Health and Social Services (DHSS) to the
Department of Administration (DOA). She noted that ALMR was
the only emergency response system, and DOA had recently
made recommendations for consideration in the Operating and
Capital Budgets.
Ms. Rehfeld looked at the Operating Budget spreadsheet. She
explained that the spreadsheet was organized with the
operating number changes were on pages 1 through 12,
operating language changes were on pages 12 through 14, one
proposed amendment to the Mental Health Trust Budget on
page 14, and technical corrections on pages 15 and 16.
Ms. Rehfeld looked at six items on the first page that
represented three transactions in the transferring of the
Administrative Hearings and Appeals Office from DHSS to
DOA. She furthered that there were two amendments that
would need to be made in order keep the full billing system
in working order. She explained that the amendments dealt
with transferring general fund that was in the
Administrative Hearing's budget, to the agencies that were
paying the bills. She stressed that the proposed system was
much more efficient.
Ms. Rehfeld looked at page 2 of the spreadsheet. She
pointed out the transfer of about $1 million from DHSS into
the Office of Administrative Hearings in DOA. She explained
that the transfer was in anticipation of the approval of
Executive Order 116, which was highlighted in lines 7 and
8.
Ms. Rehfeld looked at line 9. She explained that the
appropriation was a new request of $75,000 for the Division
of Retirement and Benefits, which had to do with costs that
could not be covered by the Retirement System trust funds.
She stated that the request included management of the
political subdivision health contracts; consultant fees;
legal expenses; and research and analysis on legislation
and other activities that were not appropriate to charge to
the retirement funds. She stressed that the Division of
Retirement and Benefits did not have general funds for this
purpose.
Ms. Rehfeld looked at line 10, and explained that the
request was for $1.5 million for ALMR. She noted that the
Department of Defense was transferring sites to the State
of Alaska, so the State would be required to maintain and
operate 41 states beginning July 1, 2012. She added that
there was a component under DOA in the Capital Budget for
their upgrades to the ALMR system, and for four state
agencies to upgrade to the new narrow band requirements.
9:12:39 AM
Co-Chair Hoffman wondered how the 41 new sites compared to
the rest of Alaska, and queried the FY 13 ALMR spending.
Ms. Rehfeld replied that there was approximately $2.6
million in the operating budget for the ALMR system. She
added that she would provide information from DOA's
recently completed report on ALMR.
Co-Chair Hoffman stressed that there was concern about the
cost of ALMR, and how it was implemented. He stressed that
ALMR did not cover the entire state. He wondered if the
administration was more accepting of ALMR. He felt that the
federal government began programs and then turns the
program to the control of the State, with added financial
responsibility. Ms. Rehfeld responded that there were no
other alternatives for emergency response than the Alaska
Land Mobile Radio (ALMR).
Co-Chair Hoffman queried a time when the committee could
review a cost sharing plan. Ms. Rehfeld replied that the
Department of Administration was working on the project.
Co-Chair Hoffman stressed that there was great resistance
to a cost-sharing plans, and wondered what alternatives
were available. Ms. Rehfeld agreed that there was
resistance, and explained that there were discussions about
developing a sliding scale. She felt that a program could
be structured without burdening the communities.
Senator Thomas pointed out that his district used the ALMR
system often. He wondered if federal agencies had been
considered for cost-sharing. Ms. Rehfeld replied that all
system users were subject to the cost-allocation plan.
9:17:23 AM
Ms. Rehfeld explained page 3, line 11. She stated that the
appropriation was $800,000 for the Office of Public
Advocacy. She pointed out that increased caseloads
resulting in higher costs indicated a need for additional
funding to meet FY 13 obligations. Projections were based
upon actual expenditure for the first half of FY 12 and
comparisons to prior year expenditures. In FY 11, the
Office of Public Advocacy (OPA) received a supplemental in
the amount of $900,000. A supplemental request for FY 12 of
$800 had been requested. Additional funding was requested
in the FY 13 amended budget to better reflect estimated.
Ms. Rehfeld looked at page 3, line 13. She explained that
the request was for $62,000 for Economic Development for
the Department of Commerce, Community and Economic
Development. She stated that the request provided grant
funding for a new Alaska Regional Development Organization
(ARDOR) in the Lower Yukon, and noted that it was a new
request for FY 13.
Ms. Rehfeld pointed out page 3, line 14, and explained that
the request was for $600,000 for Community Jails for the
Department of Corrections (DOC). She noted that additional
funding was necessary to cover operating costs of the 15
community jails based on financial reports provided to DOC.
The Department of Corrections was currently analyzing
financial data from the community jails and evaluating a
methodology to adequately cover their operational costs.
This amendment provided FY 13 funding based on a FY 12
supplemental request in the same amount, and DOC
anticipated updating the community jails funding allocation
for FY 14.
Senator Thomas looked at the request on line 13, and hoped
that there was an examination of coordination that needed
to exist between Department of Transportation and Public
Facilities (DOT/PF), Department of Natural Resources (DNR),
and DCCED. He felt there was an issue of the needs versus
what was actually occurring.
Co-Chair Hoffman felt that there were some differences in
the way that communities were reimbursed for community
jails. He wondered if any of the major department conflicts
had appeared during contract negotiations. Ms. Rehfeld
replied that that there were some difficulties at the
community jail in Kotzebue, which resulted in its closing.
She stated that Kotzebue was poised to re-open the
community jail, and had worked hard to come to some
agreements with DOC. She explained that the state had 15
community jails, each with their own unique circumstances
and conditions. She stated that there had been an
examination of the costs that were appropriately charged to
the community jail contracts to ensure that there was
consistency in how the costs were covered. She stressed
that it was to everyone's benefit to have community jails
functioning efficiently.
9:22:28 AM
Co-Chair Hoffman alleged that the State would probably see
triple the cost of community jails, if the particular
community did not offer the community jail service.
Senator Olson stressed that every year there were issues
regarding community jails in the Northwest Arctic Region,
and wondered why there was no effort to work directly with
the communities in resolving the cost issues that the State
was responsible for. Ms. Rehfeld replied that the issue was
very complicated, and it was to everyone's benefit to
resolve the issue.
Senator Olson stressed that the prisoner transport between
Kotzebue and Nome was tremendously expensive, and wanted to
see more results in resolving the situation. Ms. Rehfeld
felt that there was progress, but it was slow.
Senator Olson stated that the City of Kotzebue had
presented their priorities, and the City noted little or no
acquisition from DOC.
Ms. Rehfeld looked at page 4, line 15, and explained that
the request was for a minor technical adjustment for a
decrement of $29,900 to correct the amount of estimated
Permanent Fund Dividend (PFD) felon funds available for
fiscal health care under DOC.
Ms. Rehfeld discussed page 4, line 16, and noted that the
request was for $22,500 for the Human Rights Commission in
the Governor's Office. The request would transfer general
fund credit and bill all hearing services to existing
reimbursable services agreement. After the December 15
budget release it was determined that the transfer would
provide billing efficiencies.
Ms. Rehfeld looked at page 4, lines 17 and 18, and
explained that the requests were for an increase for both
the State Heating Assistance Program and the Heating
Assistance Program that would go directly to native tribes.
She noted that the request was included in the supplemental
bill. She stressed that the numbers would be refined. She
explained that the Heating Assistance Programs would total
$31.7 million for FY 13.
9:26:16 AM
Co-Chair Hoffman appreciated the monitoring of the numbers,
but houses that relied on fuel had seen the highest heating
costs ever, if the houses depended on oil heat. He stressed
that it was the first year that the State had anticipated
revenues from oil to exceed over $100 per barrel, and added
that gas prices continued to rise on a national level. He
requested further analysis of the two programs on Heating
Fuel Assistance. In rural areas of the state, people were
spending 50 percent of their disposable income on energy.
He felt that the State was benefitting, but the people were
not. Ms. Rehfeld replied that the numbers would be
carefully examined.
Ms. Rehfeld discussed page 5, line 19, and explained that
the request was for $350,000 for Women, Children and Family
Health in DHSS. She noted that due to increasing demand for
specialty clinic, the Women, Children and Family Health
component requests a general fund program receipts
authority increase in order to utilize collection of an
increasing total of fee receipts. This amendment provided
funding based on a FY 12 supplemental request in the same
amount.
Senator Thomas wondered if there was an audit regarding
exactly what the need and demand was pertaining to newborn
screenings. Ms. Rehfeld replied that DHSS had looked
closely at public health services.
Co-Chair Hoffman requested more detailed information in
response Senator Thomas's question.
Ms. Rehfeld looked at page 5, lines 20, 21, and 22. She
explained that the requests were related to the Executive
Order 116 transfer from DHSS to DOA.
Ms. Rehfeld discussed page 6, line 23, and explained that
the request was for $168,000 for the Workers' Compensation
Benefits Guaranty Fund in the Department of Labor and
Workforce Development (DLWD). She reported that due to
increased legal costs and increase in Workers' Compensation
Benefit Guaranty Fund authorization was required to pay for
representation provided by DOL. The amendment provided FY
13 funding based on an FY 12 supplemental request of the
same amount.
Ms. Rehfeld looked t page 6, line 24, and explained that it
was for a technical fund source adjustment of $7.2 million
from the federal American Recovery and Reinvestment Act
(ARA) funding to regular federal receipts in Business
Services in DLWD.
Ms. Rehfeld discussed page 6, lines 25 and 26 and 27, which
were specific items that were identified in the
supplemental bill for the Department of Military and
Veterans Affairs (DMVA) having to do with the match
requirement change for Kodiak, Ketchikan, and Kenai
armories. She added that the Bethel Armory had not been
decommissioned, but the new armory was already operating,
so there were additional costs. She noted a calculation
correction on electrical usage charges at Eielson Air Force
Base.
Ms. Rehfeld looked at page 7, line 28, and explained that
the request would remove the FY 13 governor's request for a
partial year of the annual estimated operating costs for
the certified veteran's cemetery in Fairbanks. The
cemetery's ongoing operating and maintenance costs would
instead start in FY 14, allowing additional preparatory
arctic construction requirements. The delay became known
after the December 15 release of the governor's budget.
Ms. Rehfeld discussed page 7, line 29, and noted that a
contribution amount needed for the normal cost and expense
load in FY 13 had decreased from the FY 12 recommended
contribution amount, and was a new request for FY 13.
9:32:48 AM
Ms. Rehfeld looked at page 7, line 30, and explained that
the request was for $260,000 for the North Latitude Plant
Material Center for DNR. She noted that the project would
address the needs of the commercial plant industry in
developing new crops, determining which varieties to
produce, and evaluation of the technology needed to be
competitive. This was a new request for FY 13.
Co-Chair Hoffman wondered where the Plant Materials Center
was located. Ms. Rehfeld replied that it was in Palmer,
Alaska.
Ms. Rehfeld discussed page 7, line 31, and noted that the
request was for $75,000 for the Alaska State Trooper
Detachments in the Department of Public Safety (DPS). She
explained that DPS currently contracted with the City of
Kotzebue to provide 24-hour dispatch services and for local
transport of prisoners to and from court. The amendment
provided FY 13 funding based on an FY 12 supplemental
request in the same amount.
Ms. Rehfeld discussed page 7, line 32, and explained that
the request was for $1.9 million of the Alaska State
Trooper Detachments in DPS. She noted that the Alaska
Bureau of Highway Patrol would no longer receive federal
funds for non-DUI related traffic enforcement. In order to
maintain traffic enforcement to include non-DUI specific
activity, such as impaired driving, youth drivers,
aggressive driving and speeding, and seat belts
enforcement, additional funding was necessary. The
amendment provided FY 13 funding based on an FY 12
supplemental request in the same amount.
Ms. Rehfeld looked at page 8, line 33, and explained that
the request was for $5,000 for the Alcoholic Beverage
Control Board in DPS. She noted that the request would
transfer the general fund credit and bill all hearing
services to the existing reimbursable services agreement.
After the December 15 budget release it was determined that
the transfer would provide billing efficiencies.
Ms. Rehfeld discussed page 8, line 34, and noted that the
Alaska Records and Identification Bureau had been under
collecting various restricted revenue sources for several
years. The reduction in restricted revenue authority would
bring budgeted authority in line with actual revenue.
Ms. Rehfeld looked at page 8, line 36, and noted that the
request was for $45,600 for the Tax Division in DOR. She
explained that the request would transfer a general fund
credit from DOA Office of Administrative Hearings and bill
all hearing services to the existing reimbursable services
agreement.
Ms. Rehfeld looked at page 8, line 37, and explained that
the request would eliminate a request in the FY 13
governor's budget released on December 15, 2011 for
increased contract costs to manufacture Alaska's cigarette
tax stamps. The manufacturer had agreed to delay the
increase in the price due to push back from state
governments. The Tax Division anticipated that the increase
would be implemented in 2012.
Ms. Rehfeld discussed page 9, line 38, and explained that
the request was for $77,000 for the Treasury Division in
DOR. It would replace the language section 27(d) with an
appropriation in Section 1.
Ms. Rehfeld looked at page 9, line 39, and stated that the
request was for $1.044 million for the Child Support
Services Division in DOR. The Outdated language in Section
19 (a) and (b) would be removed so that it allowed Federal
incentive payments to be used as State matching funds.
9:37:47 AM
Ms. Rehfeld discussed page 9, lines 40 and 41, and
explained that the requests were for the Alaska Permanent
Fund for three positions having to do an in-house
investment management. She pointed out that currently those
positions were held by outside management services. She
stressed that the Permanent Fund believed that they could
provide the positions in-house at greatly reduced cost to
the State.
Ms. Rehfeld looked at page 9, line 42, and explained that
there were some adjustments in the December 15, 2011 budget
relating to insurance costs for rural airports. She noted
two transactions in the amended budget to correct those
calculations.
Ms. Rehfeld looked at page 10, line 43, and stated that the
request was for $121,100 for the Northern Region Highways
and Aviation in DOT/PF. She explained that funding for an
airport manager position at the Barrow Airport was
necessary in order to comply with Federal Security (TSA)
and Certification (FAA) requirements, mandates and
directives delivered to the department after the December
15 release of the FY 13 budget.
Co-Chair Stedman requested information regarding an
increment to close the gap at the Ketchikan airport. Ms.
Rehfeld responded that there was intent to cover insurance
costs for the ferries to and from the airport in Ketchikan.
She pointed out that there was an issue because the ferries
were not state-owned.
Co-Chair Hoffman appreciated the effort to make the Bethel
airport a 24-hour facility and the improved services.
Senator Olson looked at the Barrow airport, and wondered
what the plan for the manager would be. Ms. Rehfeld replied
that the position would be in Barrow.
Senator Olson wondered if the manager would be local. Ms.
Rehfeld did not know, and hoped it would be a local person
in Barrow.
9:42:19 AM
Ms. Rehfeld looked at page 10, line 45 to page 12, line 54.
She pointed out line 57. She stated that the requests were
for the University of Alaska. She looked at line 47, and
stated that a federal grant had been received for mentoring
in urban areas. It was a $14.9 million grant over a five-
year period. She explained that the University had
requested $2.5 million in federal funds for the grant. She
furthered that line 49 was a request for increased federal
authorization for Pell Grants. She furthered that the other
University requests were for moving federal authorization
from one component to another.
Ms. Rehfeld looked at the language amendments beginning
with page 12, line 57. She explained that the amendment
would delete language appropriating general funds to an
unexpended and unobligated balance of $5 million in the
state insurance catastrophe reserve account.
Ms. Rehfeld explained page 12, line 58. She stated that the
amendment deleted Section 19 (a) and (b) for federal
incentive payments to be used as state matching funds. The
appropriation for state match would be requested in Section
1 and increased by $265,300 for a total request of $1.044
million to recalculate the 34 percent match rate.
Ms. Rehfeld highlighted page 12, line 59, and explained
that the amendment was for the sum of $2 million
appropriated from the general fund to the trauma care fund.
Ms. Rehfeld discussed page 12, line 60, and stated that it
would delete Section 27 (d) and replace with and
appropriation in Section 1.
Ms. Rehfeld highlighted page 12, line 61, and explained
that the amendment would delete the deposit in the defined
benefit plan account in the Alaska National Guard and
Alaska Naval Militia retirement system for past service
costs. She noted that no direct contribution was required
for past service costs.
Ms. Rehfeld explained page 13, line 62, and explained that
the deposit in the defined benefit plan account in the
judicial retirement system for the purpose of funding the
judicial retirement system un AS 22.23.046 for the fiscal
year ending June 30, 2013.
Co-Chair Stedman queried the position of the administration
on the request on line 62. Ms. Rehfeld replied that the
administration supports funding the past service cost. She
explained that there was no requirement and no cap, and the
administration wanted to be sure that there was an
incorporation of the courts' request.
Co-Chair Hoffman pointed out that the request was left out
of the FY 13, and wondered if the language would be
included in the original FY 14 budget. Ms. Rehfeld replied
that it was preferred to include the request in the
original budget request.
9:48:54 AM
Ms. Rehfeld explained page 13, line 63, and explained that
the general fund debt service amount was reduced from
$29,689.9 million to $27,578 million as a result of
refinancing the 2003A bonds in January 2012.
Ms. Rehfeld looked at page 13, lines 64 to 67, and stated
that these amendments would address refinancing related to
the refinancing of the General Obligation Bonds, Series
2003A
Ms. Rehfeld explained page 14, and noted the request for
the Mental Health Budget. She stated that the amendment was
from the Mental Health Trust for $500,000 in Mental Health
Trust receipts for patient-centered medical homes. She
explained that the request was for a strategic integration
plan development and one-time competitive grans for up to
four pilot programs for medical home infrastructure
development. She added that it was a new Mental Health
Trust recommendation for FY 13.
Co-Chair Hoffman wondered where the pilot project was
located. Ms. Rehfeld replied that the request was for
competitive grants, so she did not know exactly where it
would be located.
Ms. Rehfeld explained that pages 15 and 16 highlighted
technical corrections having to do with language and
numbers sections. She pointed out line 78, and stated that
there would be a deletion of $1.5 million in federal funds.
She stressed that it was a carry-forward estimate, and
would be included in the end of the year. She stated that
those items were identified by Legislative Finance and the
Office of Management and Budget.
Senator Thomas looked at line 40, and wondered what the
decrement would amount to. Ms. Rehfeld replied that she did
not know, but noted a section that highlighted the
investment management costs for the Permanent Fund, and
agreed to provide further information.
Senator Thomas looked at line 28, and noted that DVMA was
being charged 30 percent overhead by DOT. He felt that 30
percent was high, and hoped that there would be an
examination of that percentage. Ms. Rehfeld agreed to
explore that issue.
Senator Egan pointed out lines 40 and 41, and wondered
where those specific positions would be located. Ms.
Rehfeld replied that the positions would be in Juneau.
SB 161 was HEARD and HELD in committee for further
consideration.
SB 162 was HEARD and HELD in committee for further
consideration.
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