Legislature(2019 - 2020)SENATE FINANCE 532
02/27/2020 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB152 || SB153 || SB154 || SB174 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 152 | TELECONFERENCED | |
| *+ | SB 153 | TELECONFERENCED | |
| *+ | SB 154 | TELECONFERENCED | |
| += | SB 174 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 152
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date."
SENATE BILL NO. 153
"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."
SENATE BILL NO. 154
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
SENATE BILL NO. 174
"An Act making supplemental appropriations,
reappropriations, and other appropriations; amending
appropriations; capitalizing funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date."
9:01:53 AM
Co-Chair Stedman relayed that the committee would consider
a presentation from the administration regarding proposed
budget amendments.
9:02:51 AM
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, discussed the presentation
"Governor's Amended" (copy on file). He explained that he
would be reviewing the governor's amended budget as well as
amendments to the supplemental budget.
Mr. Steininger presented slide 2, "Governor's Amended":
Governor's Amended
HB205/SB152 & HB206/SB153
Operating
? $45,350.4 UGF
? $2,318.6 DGF
? $493.1 Other
-$5,715.2 Fed
? $42,446.9 TOTAL
Operating FY2020 Effective Date
? $815,933.0 UGF
FY2020 Supplemental Amendments
HB234/SB174
Operating and Capital
? $30,539.2 UGF
Co-Chair Stedman asked Mr. Steininger refrain from using
acronyms so that the public could follow the conversation.
9:04:04 AM
Mr. Steininger spoke to slide 3, "Governor's Amended,"
which showed a data table comparing the impact of the
amendments on total overall state spending for FY 20 and FY
21. He drew attention to the bottom line that showed the
updated surplus/deficit. In FY 20, the deficit was $510
million; and in FY 21, the deficit was about $1.6 billion.
The funds would come out of the Constitutional Budget
Reserve (CBR).
Co-Chair Stedman asked for clarity on why there was a $1
billion difference. He asked what the driving factor was.
Mr. Steininger stated that there was a reduction of $1
billion that was related to the amount of draws that were
available for government from savings after adjustment for
the Permanent Fund Dividend (PFD) payment. For FY 21,
spending was down by about $50 million in total
appropriations between the operating and capital budgets.
Co-Chair Stedman asked if there was a different PFD amount
between the two fiscal years.
Mr. Steininger affirmed that with the proposed supplemental
amendment to the governor's operating budget there was a
difference in the PFD between FY 20 and FY 21. The FY 21
deposit into the dividend fund would be $120 million
greater than the amount in FY 20. He noted that the amount
reflected the statutory calculation for the PFD payment.
Co-Chair Stedman clarified that the previous year's
dividend was $1600, and the FY 21 proposed PFD was
approximately $3000.
Mr. Steininger agreed.
Co-Chair Stedman thought the PFD amount had a significant
effect on the bottom line.
Mr. Steininger agreed that the proposed PFD amount would
affect the bottom-line deficit.
Co-Chair Stedman asked how much the increase would affect
the bottom line.
Mr. Steininger informed that the increase in the deficit
between FY 20 and FY 21 was about $1.1 billion.
Co-Chair Stedman thought it was important to remember that
the committee was trying to communicate the state's fiscal
position to the people of Alaska. He reminded that
committee meetings were important for people at home to
better understand what the legislature was dealing with and
why it was problematic to balance the budget. He thought a
simple way of looking at the topic was to observe that
there was about a $1 billion spread between the previous
year's $1,600 PFD and the current year's proposed $3,000
PFD.
Co-Chair von Imhof thought it was important to identify the
fund source and discuss the short term and long term
impacts on the fund source moving forward. She pondered the
meaning of taking funds from the Earnings Reserve Account
(ERA). She noted that the market had a 2,000-point drop in
the past couple of days and that the price of oil was down
to $50/bbl. She emphasized that the decisions being made
would have consequences.
Co-Chair Stedman stated that the committee would consider
the governor's proposed amendments and would look at
comparisons with the Legislative Finance Division (LFD) at
a later time. The following week the committee would take a
deeper look and consider why the numbers were different
between the two fiscal years being discussed.
9:08:37 AM
Senator Hoffman noted that the legislature had passed
legislation a few years previously to institute a percent
of market value (POMV) draw from the ERA in the amount of
5.25 percent, with a 5 percent limit in the out years. He
asked if the administration would follow the law limiting
the draw that was signed by the previous governor and not
put the fund in jeopardy.
Mr. Steininger stated that the FY 21 budget had adhered to
both of the statutes, which were conflicting. The amendment
for FY 20 drew an additional amount from the ERA in order
to comply with the statutory PFD formula.
Senator Hoffman explained that when the legislature passed
the legislation to limit the draw, it had been concerned
about the future of the fund. Mr. Steininger's comments
gave him the assumption that the future of the fund was
less important than a $3,000 PFD in the view of the
administration.
Mr. Steininger stated that the position of the
administration was to follow the statutory formula for
calculating the PFD and also work to make changes to ensure
the state did not have to continue to draw from the ERA in
the future.
Co-Chair Stedman asked to move on. He thought there was an
amendment on the topic that would be considered later in
the day.
9:11:17 AM
Mr. Steininger referenced slide 4, "Governor's Amended:
Statewide":
? FY2021 Salary Adjustment Correction:
-$302.9 UGF, -$306.4 DGF, -$1,544.3 Other, -$151.2 Fed
? Fund Transfers; Fish and Game Fund - Sport Fish
Enterprise Account
Deposit remaining balance of the Alaska Fish and
Game Revenue Bond Redemption Fund into the Fish
and Game fund.
? Debt Service; Oil and Gas Tax Credits Financing:
$55,000.0 UGF
? Permanent Fund; Permanent Fund Dividend Fund
Payment of Permanent Fund Dividends Owed to Alaskans:
$815,933.0 transfer from ERA to Dividend Fund
Mr. Steininger noted that there had been an error in the
calculation made during the development of the FY 21 budget
that overstated the effects of some bargaining agreements
and there were amendments throughout that reflected a more
accurate calculation. He detailed that if litigation came
out in the state's favor, the $55 million for oil and gas
tax credits would be the amount of debt service required.
He noted that the amount for the PFD Fund was for the
amount of shortfall for the PFD paid in calendar year 2019.
9:13:18 AM
Senator Wielechowski recalled that two years previously
when HB 331 was presented to the legislature [legislation
enacted in 2018 that authorized the issuance of "subject-
to-appropriation" bonds to pay outstanding cashable oil and
gas tax credits], it had shown that the first aggregate
payment for the first year would be $26.98 million. He
asked why there was a difference in the amount that was
shown on the slide.
Mr. Steininger thought Senator Wielechowski was referencing
information that tapered in the debt service payments,
while the $55 million represented a full year of debt
service payments.
Co-Chair Stedman stated that the amendments being
considered were suggestions from the administration, and
the legislature would decide if there would be
modifications to the budget.
Mr. Steininger turned to slide 5, "Governor's Amended:
Department of Administration,":
Operating Total: $169.0 UGF, $500.0 DGF, $1,091.5
Other
? Centralized Administrative Services; Health Plans
Administration AlaskaCare Third-Party Claims
Administrator Contract: $1,000.0 Other
? Centralized Administrative Services; Retirement and
Benefits Fee for Mandatory Patient-centered Outcomes
Research Institute Due to Affordable Care Act (FY2014-
FY2031): $169.0 UGF
? Legal and Advocacy Services; Office of Public
Advocacy MH Trust: Disability Justice, Public Guardian
Position: $91.5 Other
? Shared Services of Alaska; Accounting Program
Receipt Authority for Increased Collection Activity
and Vendor Fee Revenue: $500.0 DGF
? Office of Information Technology; Alaska Division of
Information Technology Transfer Administrative
Assistant II (02-6512) from Alaska Division of IT to
State of Alaska Telecommunication System
9:16:16 AM
Mr. Steininger considered slide 6, "Governor's Amended:
Dept. of Commerce, Community, and Economic Development":
Operating Total: $224.8 DGF
? Alaska Oil and Gas Conservation Commission
Transfer from the Department of Law for Technical
Adjustment: $224.8 DGF
Add Carryforward Language in Number Section
Mr. Steininger noted that there were two technical
adjustments to make regarding the Alaska Oil and Gas
Conservation Commission. One related to receipts collected
by the agency. There was a transfer from the Department of
Law that had to do with the way legal services were paid
for on behalf of the commission. There was a corresponding
adjustment within the Department of Law.
Mr. Steininger displayed slide 7, "Governor's Amended:
Department of Corrections":
Operating Total: -$13,445.7 UGF
? Administration and Support; Administrative Services
Department Fixed Cost Increases: $317.3 UGF
? Administration and Support; Information Technology
MIS
Department Fixed Cost Increases: $837.0 UGF
? Health and Rehabilitation Services; Health and
Rehabilitation Director's Office
Department Fixed Cost Increases: $3,200.0 UGF
? Population Management; Out-of-State Contractual
Remove Out-of-State Contract Housing: -$17,800.0
UGF
Mr. Steininger explained that there were three items in the
Department of Corrections (DOC) that were related to
increases in fixed costs. He explained that DOC required
additional support to ensure that the cost increases did
not affect costs within the prison system.
Co-Chair von Imhof stated that Senate Finance Subcommittee
on the Department of Corrections was interested in the out
of state contract. She asked if the $17.8 million listed on
the slide was actually paid to a vendor. She asked about
the flow of funds.
Mr. Steininger stated that the $17.8 million was for the FY
21 budget so had not yet been appropriated or spent. The
amendment removed funding that was in the governor's FY 21
budget in reflection of not needing the funds for the
current prison operations plan for 2021.
Co-Chair von Imhof asked if there was any severance owed to
the prison such as a contract that was cancelled with
penalties.
Mr. Steininger understood that the RFP was cancelled, and
that no contract had been awarded. He was not aware of any
protest.
Co-Chair Stedman asked Mr. Steininger to get back to the
committee on the matter.
9:19:58 AM
Senator Hoffman thought the $17.8 million looked as if it
was a savings. He asked how many inmates had been planned
to send out of state at a lower cost. He assumed the plan
would have saved the state funds. He asked where the
inmates would be staying in-state, and why the funds were
shown as a savings when additional funds would be needed to
keep the inmates in-state.
Mr. Steininger detailed that also included in the
supplemental budget was a lapse extension for an
appropriation to reopen the Palmer Correctional Center. The
facility would accommodate the increased prison population.
There was other money elsewhere in the budget to ensure the
department was able to accommodate the increased prison
population.
Senator Hoffman asked where the funds would show up in the
budget.
Mr. Steininger detailed that the lapse extension for the
Palmer facility would show up in the supplemental budget
that was proposed by the administration. There was other
authority within the governor's operating budget that also
addressed inmate costs.
Senator Hoffman asked how much there was in other
authority.
Mr. Steininger did not know the total amount but estimated
that the amount for the Palmer facility was about $16.7
million.
Co-Chair Stedman thought the subcommittee could address the
matter in greater detail.
Senator Hoffman was trying to point out that the $17.8
million was not a savings to the state; in fact, by keeping
the inmates in state it would cost more.
9:23:00 AM
Mr. Steininger highlighted slide 8, "Governor's Amended:
Dept. of Education and Early Development":
Operating Total: $53.9 DGF, $211.0 Fed
? Education Support and Administrative Services;
Student and School Achievement
Alaska Technical and Vocational Education
Funding: $53.9 DGF
? Alaska State Libraries, Archives, and Museums;
Museum Operations
Preparing Alaska's Cultural Organizations for
Emergencies Federal Grant (FY2021-FY2023): $211.0
Fed
Mr. Steininger detailed that the new museum grant listed on
the slide was to ensure that historical artifacts were
cared for in times of emergency.
Senator Hoffman relayed that the committee members had been
discussing the need for treating all people in the state
fairly. He referenced Co-Chair Stedman's comment regarding
adequate funding for a swimming pool at Mt. Edgecumbe High
School. He mentioned the sense that there were inequities
in the treatment of the people at Mt. Edgecumbe. It was
suggested by the committee that the administration review
the expense, and then bring forward an amendment in
committee to address adequate funding for the swimming pool
at Mt. Edgecumbe. He asked if the matter had been
considered and if there been a decision not to request
operational funds for the swimming pool.
Mr. Steininger stated that the governor's FY 21 budget
included $650,000 of receipt authority to operate the pool
facility at Mt. Edgecumbe. He noted that at the current
time, no change was being proposed to the funding.
Senator Hoffman did not believe that receipt authority was
the proper mechanism. He noted that none of seven projects
previously discussed with the pool were funded with receipt
authority. He thought the individuals in Mt. Edgecombe
should receive the same treatment as others. He found Mr.
Steininger's response inappropriate. He thought rural
Alaska should not be singled out for receipt authority and
should be funded by General Funds.
Co-Chair Stedman stated that he was in conversation with
the administration regarding a multitude of land transfers
being requested for land development in and around Mt.
Edgecumbe. The land was owned by the state, and he and the
administration were trying to come up with a way of moving
the project forward. There was no agreement thus far,
although there was a direction being pursued. The committee
would consider modifications to the FY 21 budget. He
thought receipt authority did not give the opportunity to
operate the facility. He informed that there would be an
agreed-upon solution with the administration, or he would
be looking to the committee for recommendations as to how
to rectify the situation. He thought there would
forthcoming amendment addressing pool funding.
9:28:14 AM
Mr. Steininger believed the funding for the pool was
included in the supplemental budget, and not the amendment
package.
Co-Chair Stedman thought the funding Mr. Steininger
mentioned would get the pool through the fiscal year only.
Senator Olson wanted to voice the same concern as Senator
Hoffman regarding his constituents that were attending
Mount Edgecumbe High School. He cited that his district had
an inordinate number of drownings compared to other parts
of the state. He had been following the ongoing matter of
funding for the Mt. Edgecumbe pool, and thought it had
always been treated as a "stepchild". He was concerned that
there would not be sufficient funding to maintain the pool,
even with the land transfers mentioned by Co-Chair Stedman.
He thought there was a lack of focus on the part of the
administration in trying to prevent drownings. He stated
that there was only a small percentage of people in his
district that knew how to swim. He affirmed that he would
be watching the matter very closely.
Co-Chair Stedman would keep the committee posted on the
matter. He thought there was a high likelihood that the
issue would be concluded without the committee taking
defensive measures to protect the institution.
9:30:09 AM
Mr. Steininger looked at slide 9, "Governor's Amended:
Department of Environmental Conservation":
Operating Total: $164.6 UGF, $15.0 Other
? Environmental Health
Restore Dairy Program: $164.6 UGF, $15.0 Other
Co-Chair Stedman asked for Mr. Steininger to repeat the
information on the slide.
Mr. Steininger restated that there was $164.6 thousand in
funding and $15 million in receipt authority to restore the
dairy program.
Co-Chair von Imhof referenced conversations the previous
year that had suggested the program was not needed and
would be phased out. She asked what happened.
Mr. Steininger stated that the department and the
administration had worked with the industry to find a
balance in which the industry partners would provide some
necessary funds to continue operation of the regulatory
program that allowed the industry to continue.
Co-Chair von Imhof asked if the industry was putting in
funds. She recalled that the previous year there had been
mention of stakeholders would fund the program.
Mr. Steininger detailed that the industry would be funding
the $15,000 portion of the program.
Senator Wilson noted that he was chair of the subcommittee
for the Department of Environmental Conservation and had
understood that the $15,000 would not come from industry.
He asked what the department was going to do to find a
sustainable path going forward with three entities funding
together. He referenced a goat farm in Kodiak, a cow dairy
in Palmer/Wasilla, and a bottling plant. He understood that
there was potential for federal subsidies to help offset
costs.
Mr. Steininger agreed to provide more information at a
later time.
Co-Chair Stedman asked Senator Wilson and the subcommittee
to use the information from Mr. Steininger to go into the
issue in greater detail and bring the information back to
the full committee.
9:33:40 AM
Senator Olson was concerned that the administration had
communicated a theme that businesses would pay their own
way. He thought the dairy program was an example of
businesses not paying their own way and questioned the
shift in mentality from the previous year.
Mr. Steininger acknowledged that there were incremental
steps for the industry to assist and thought that although
$15,000 did not cover the full cost of the program, it did
show some buy-in from the industry.
Senator Olson thought incremental changes were not
significant in the face of the state's fiscal crisis. He
was concerned about the change of message from the
administration. He mentioned the issue of the Mt. Edgecumbe
pool.
Mr. Steininger addressed slide 10, "Governor's Amended:
Dept. of Health and Social Services (1 of 2)
Operating Total: $1,700.0 UGF, $760.3 Other, -$5,975.0
Fed
? Senior and Disability Services; Early Intervention
Learning Program
Delete Authority for Children and Families
Preschool Development Grant: -$7,000.0 Fed
? Children's Services; Foster Care Special Need
Family First Prevention Services Act
Implementation: $700.0 UGF, $700.0 Fed
? Children's Services; Subsidized Adoptions and
Guardianship
Growing Number of Children in Subsidized
Adoptions and Guardianships: $1,000.0 UGF, $200.0
Fed
Senior and Disability Services; Senior and
Disability Services Administration
MH Trust: Adult Protective Services III Position:
$75.0 Other, $75.0 Fed
? Behavioral Health; Alaska MH Board and Advisory
Board on Alcohol and Drug Abuse
MH Trust: AMHB/ABADA Research Analyst III: $96.3
Other
Mr. Steininger detailed that the addition of $200,000 in
federal receipt authority for subsidized adoptions and
guardianships did not reflect all the federal receipts
leveraged by the additional $1 million. He explained that
there was enough excess federal receipt authority within
the budget to leverage as much federal funding as possible
with the additional $1 million.
9:37:50 AM
Senator Wielechowski asked why the state did not receive
the $7 million pre-school development grant that was
anticipated.
Mr. Steininger did not know the specific reason why the
grant was not awarded to the state.
Co-Chair Stedman asked Mr. Steininger to get back to the
committee regarding why the grant was not received.
Mr. Steininger advanced to slide 11, "Governor's Amended:
Dept. of Health and Social Services (2 of 2)":
? Departmental Support Services; Commissioner's Office
MH Trust: Mental Health Professionals Off Site
Evaluations: $300.0 Other
? Behavioral Health; Behavioral Health Administration
MH Trust: Partner Access LinePediatric Alaska
(PAL-PAK): $89.0 Other
MH Trust: Peer Support Certification: $125.0
Other
? Departmental Support Services; Commissioner's Office
MH Trust: Statewide Designation Evaluation and
Stabilization/Designation Evaluation and
Treatment Coordinator: $75.0 Other, $50.0 Fed
? Behavioral Health; Suicide Prevention Council
Transfer from BH Admin. to Extend Suicide Prevent
Council Grant Funding: $400.0 UGF
? Behavioral Health; Behavioral Health Administration
Transfer to Suicide Prevent Council (SPC) to
Extend SPC Grant Funding: -$400.0 UGF
Mr. Steininger discussed the proposal of redirecting excess
receipt authority to much-needed grants within the Suicide
Prevention Council.
Senator Wielechowski asked about the Mental Health Trust
Authority Authorized Receipts (MHTAAR) funds for
contractual services for $300,000. He asked if any of the
funding would go to the Alaska Psychiatric Institute (API).
Mr. Steininger stated that he would get back to the
committee with the information.
Co-Chair Stedman asked Mr. Steininger to get back to the
committee with a funding breakdown.
Mr. Steininger looked at slide 12, "Governor's Amended:
Dept. of Labor and Workforce Development":
Operating Total: $48.2 UGF, $685.4 DGF, $10.6 Other
? Commissioner and Administrative Services; Workforce
Investment Board
Alaska Technical and Vocational Education
Funding: $457.9 DGF
? Alaska Vocational Technical Center
Alaska Technical and Vocational Education
Funding: $227.5 DGF
Salary and Benefit Adjustment: $48.2 UGF, $10.6
Other
Mr. Steininger added that there was an additional $227.5
thousand in Alaska Technical and Vocational Education
funding adjustments that was not shown on the slide.
9:41:03 AM
Mr. Steininger spoke to slide 13, "Governor's Amended:
Department of Law
Operating Total: $0.0 DGF
? Civil Division; Natural Resources
Reverse Deleted Alaska Oil and Gas Conservation
Commission Receipts for Technical Correction: $224.8
DGF Transfer to Department of Commerce, Community, and
Economic Development for Technical Adjustment: -$224.8
DGF
Mr. Steininger referenced slide 14, "Governor's Amended:
Department of Military and Veterans Affairs ":
Operating Total: $245.0 UGF
Military and Veterans' Affairs; State of Alaska
Telecommunications System (SATS)
Add Support for management of SATS: $280.5 UGF
FY2021 Technical Correction: -$35.5 UGF
Transfer Administrative Assistant II (02-6512)
from Alaska Division of IT to State of Alaska
Telecommunications System
Mr. Steininger explained that the position that was being
transferred had previously been funded by receipts by the
Office of Information Technology. The funds could not be
spent within the Department of Military and Veterans
Affairs, which was the reason for the $280.5 thousand
change in UGF.
Mr. Steininger turned to slide 15, "Governor's Amended:
Department of Natural Resources (1 of 2)":
Operating Total: $313.0 UGF, $278.1 DGF, $200.0 Fed
? Agriculture; Agricultural Development
Agriculture Revolving Loan Program Support:
$204.3 DGF
? Parks and Outdoor Recreation; Parks Management and
Access
Boating Safety Program: $200.0 Fed
? Administration and Support Services; Office of
Project Management and Permitting
Transfer Citizens' Advisory Commission on Federal
Areas: $178.1 UGF
? Administration and Support Services; Commissioner's
Office Support Commissioner's Office Execution of the
Governor's Policy: $17.8 UGF
? Parks and Outdoor Recreation; Parks Management and
Access Support for Field Training and Inspections:
$19.8 UGF
Mr. Steininger detailed that the last two items on the
slide as well as some items on the following page were
related to travel in the Department of Natural Resources
for inspection work, policing work in parks, and various
other critical travel needs that had not been properly
accounted for in the travel reductions made the previous
year.
Senator Wielechowski asked Mr. Steininger to discuss the
$178,100 for the Citizen's Advisory Commission on Federal
Areas.
Mr. Steininger detailed that the $178,100 would fund a
position to oversee the commission as well as a small
amount of money for travel and some other related
commodities necessary to support the position.
9:44:16 AM
Mr. Steininger considered slide 16, "Governor's Amended:
Department of Natural Resources (2 of 2)":
? Fire Suppression, Land and Water Resources; Forest
Management and Development
Support for Increased Timber Sales: $27.9 UGF
? Fire Suppression, Land and Water Resources; Mining,
Land and Water
Support for Mine Inspections and Fieldwork: $44.4
UGF, $65.8 DGF
? Fire Suppression, Land and Water Resources;
Geological and Geophysical Surveys
Support for Response to Geologic Hazards and
Coordination of Development of Alaska's
Resources: $25.0 UGF, $8.0 DGF
Mr. Steininger explained that most of the items on the
slide were related to the travel costs he had previously
mentioned.
Senator Wielechowski asked about the second bullet point on
slide 16 and asked if any of the funds for mine inspection
and field work would be used for the Pebble Mine.
Mr. Steininger did not know the specific mines that the
funding would be related to, but he would get back to the
committee with further information.
Senator Wielechowski asked out the $17,800 on the previous
slide for "execution of the governor's policy." He asked
which specific policies were being referenced.
Mr. Steininger stated that the slide did not reference
specific policies, but rather all the policies supported by
the commissioner's office of the Department of Natural
Resources.
Senator Wielechowski asked if the funds would be used for
travel or discussion of the oil tax initiative.
Mr. Steininger stated that the $17,800 would be used for
general travel within the commissioner's office.
Senator Bishop thought there was a theme present that
indicated that travel funds were being added that had been
removed the year before. He would opine more on the matter
at a later time.
9:47:11 AM
Senator Hoffman referenced Senator Wielechowski's concern
about the Pebble Mine. He thought most of Mr. Steininger's
answers were to get back to the committee at a later time.
He was interested if any of the supplemental funds
requested be used for the Pebble Mine. He wondered what
funds in the operating budget were for the Pebble Mine,
which he acknowledged was beyond the scope of the
presentation. He asked for Mr. Steininger to provide the
additional information.
Co-Chair Stedman asked Mr. Steininger to provide the
additional information.
Mr. Steininger displayed slide 17, "Governor's Amended:
Department of Public Safety":
Operating Total: $160.0 Other
? Statewide Support; Training Academy MH Trust: Crisis
Intervention Team Training Course: $80.0 Other
? Alaska Police Standards Council MH Trust: Crisis
Intervention Team Training Course: $80.0 Other
Senator Olson asked how much of the funds would be used for
recruitment and retention of Village Public Safety Officers
(VPSOs).
Mr. Steininger understood that the Crisis Intervention Team
Training Course was targeted to the training academy and
the Alaska State Troopers.
Senator Olson asked if VPSOs were being put on the back
burner.
Mr. Steininger stated that the recommendation was being
made by Alaska Mental Health Trust Authority (AMHTA).
Mr. Steininger highlighted slide 18, "Governor's Amended:
Department of Revenue":
Operating Total: $346.6 UGF, $150.0 DGF
? Taxation and Treasury; Tax Division Restore
efficiency savings, long term support for Tax Revenue
Management System: $346.6 UGF
? Taxation and Treasury; Unclaimed Property Unclaimed
Property Inventory and Claims Backlog: $150.0 DGF
Mr. Steininger explained that the Department of Revenue
believed it would continue to need the authority related to
position reductions. The $150,000 was related to a backlog
of property inventory and claims.
Co-Chair Stedman asked about the restoration of efficiency
savings; and wondered if it pertained to budget reductions
that could not be met and were being added back.
Mr. Steininger stated that the reductions that were
proposed to generate efficiencies could be met, but as the
department looked at the cost of bringing in the tax
revenue management system and transitioning the system from
the capital budget to the operating budget, the cost had
ended up being higher than anticipated. The department was
requesting that the savings through the reduction of
positions be reallocated to the management of the tax
revenue management system.
9:51:03 AM
Mr. Steininger looked at slide 19, "Governor's Amended:
Dept. of Transportation and Public Facilities
Operating Total: $55.0 UGF, $126.9 DGF
? Administration and Support; Measurement Standards
and Commercial Vehicle Compliance
Measurement Standards' Equipment Calibration and
Certification: $55.0 UGF
? Marine Highway System; Marine Engineering
Vessel Construction Manager I/II for IFA Annual
Overhaul and Construction Projects: $126.9 DGF
Co-Chair Stedman asked for further explanation of the
Inter-Island Ferry Authority position.
Mr. Steininger stated that the Inter-Island Ferry Authority
(IFA) operated some smaller ferry runs in the state and had
received federal monies in order to do some annual overhaul
and construction projects. The removal of a previous
position at the Alaska Marine Highway System (AMHS) that
had helped to manage projects and manage collecting federal
revenues had resulted in a larger burden. The position had
been added back at a cost of $127,000.
Co-Chair Stedman thought the position had not only helped
with IFA but also with the AMHS and its federal issues. He
reminded that if IFA collapsed, the responsibility would
shift back to AMHS, which would cost the state
significantly more. He thought the state subsidized IFA for
about $250,000 per year. He was pleased that IFA was
operating.
Mr. Steininger addressed slide 20, "Governor's Amended:
Judiciary (1 of 2)":
Operating Total: $761.1 UGF
? Alaska Court System; Administration and Support
FY2021 Budget AmendmentAdditional Costs for the
Conversion to Bi-weekly Payroll: $34.0 UGF
? Alaska Court System; Trial Courts
FY2021 Budget AmendmentAdditional Costs for the
Conversion to Bi-weekly Payroll: $251.2 UGF
? Therapeutic Courts
FY2021 Budget AmendmentAdditional Costs for the
Conversion to Bi-weekly Payroll: $11.7 UGF
Alaska Court System; Appellate Courts
FY2021 Budget AmendmentAdditional Costs for the
Conversion to Bi-weekly Payroll: $24.8 UGF
? Commission on Judicial Conduct
FY2021 Budget AmendmentAdditional Costs for the
Conversion to Bi-weekly Payroll: $1.2 UGF
Judicial Council
FY2021 Budget AmendmentAdditional Costs for the
Conversion to Bi-weekly Payroll: $3.6 UGF
Mr. Steininger explained that many of the amendments on the
slide related to the conversion to bi-weekly payroll. There
had been additional costs relating to the way the paychecks
interfaced with the accounting system.
Senator Wilson asked if the costs were one-time costs.
Mr. Steininger stated that there was related supplemental
costs for FY 20. The amount on the slide would be added to
the base and should not need to be adjusted in the future.
Senator Wilson asked why the state did not go back to the
original system if the change would cost roughly $400,000
more per year.
Mr. Steininger informed that payroll was paid out in two
different ways (bi-weekly and semi-monthly) and managing
both methods created additional work and effort within the
Department of Administration (DOA). Transitioning to one
system of bi-weekly payroll would make the system operate
more efficiently.
Senator Wilson questioned if the efficiency was costing the
state more money than managing the two systems.
Mr. Steininger informed that the Alaska Court System had
requested the additional authority. Other areas that moved
over to bi-weekly payroll had flexibility to accommodate
slight changes in the payroll cost. He thought the net
effect of moving to bi-weekly payroll was of benefit to the
state.
9:55:47 AM
Co-Chair von Imhof built upon Senator Wilson's question.
She thought it appeared from the slide that it was about
$200 thousand or $300 thousand more to convert to bi-weekly
payroll. She thought it made sense to have one payroll
system, but it appeared that the change would cost the
state more. She thought a follow-up with the Department of
Administration to consider whether the cost of the change
would be a net gain or loss.
Senator Wielechowski stated that the Senate Finance
Subcommittee on the Judiciary had discussed the matter. He
did not think there was clarity on the subject. He was
concerned that there were similar costs in other agencies
and would cost the state millions of dollars over years. He
understood that based upon the way things were calculated,
there would be additional costs in five out of every seven
years.
Mr. Steininger stated that some years had 260 workdays,
some had 261, and some had 262. The amendment on the slide
reflected the cost to the court system in a year that had
261 workdays. Subsequent years would not require an
amendment. He relayed that generally speaking, Senator
Wielechowski's statement was correct.
Co-Chair Stedman suggested that the subcommittee do more
work on the matter and bring the information to the
committee. He thought it was interesting to consider the
state trying to save money with an increase in cost.
Senator Wielechowski thought the change was built into the
base cost, which would increase by a few hundred thousand
dollars. He asked if the same increase would be seen in
every other department in the state.
Mr. Steininger stated that not all the bargaining units had
moved to a bi-weekly payroll system. The other departments
that had employees that moved to the bi-weekly payroll
system were absorbing the costs through management of
existing budgets. The Alaska Court System put forward a
request related to adjusting its budget for biweekly
payroll.
9:59:34 AM
Senator Hoffman asked about information that would be
submitted to the committee regarding payroll. He asked how
the committee would decipher the information that would be
presented because the 26-week pay period provided full
information on the cost to the state, but there would not
be a complete picture of the bi-weekly system. He was
concerned about the ability to see the true cost of the
payroll change. He could envision the committee reviewing
information that did not truly reflect the total cost to
the state.
Co-Chair Stedman asked Mr. Steininger to elaborate on how
the committee could have budget clarity and transparency on
the matter.
Mr. Steininger affirmed that the Office of Management and
budget (OMB) would continue to provide reports that showed
the cost of each individual position, and the total annual
cost of to the state budget as various bargaining units
moved to bi-weekly payroll. The information would include
all different terms of bargaining units, inclusive of
salary and benefits.
10:02:31 AM
Senator Hoffman assumed the committee would get information
on the total cost to the state for individual employees as
well as budget information. He thought the two figures
would not match over the years. He thought the proposed
conversion to bi-weekly payroll would cost more money in
the long run and generate disinformation. He thought it
would cause a lot of work for the committee to be able to
see the issue clearly.
Co-Chair Stedman hoped to have discussions on the matter to
provide clarity on the issue and ensure a good
understanding.
Senator Wielechowski understood that all departments were
moving to the bi-weekly payroll system in the next year. He
anticipated a supplemental budget the following year for
millions of dollars as a result of the conversion. He
wanted OMB to provide projections for the next seven years,
indicating how much the payroll conversion would cost the
state.
Co-Chair Stedman asked for Mr. Steininger to provide the
information.
10:05:04 AM
Mr. Steininger advanced to slide 21, "Governor's Amended:
Judiciary (2 of 2)":
? Alaska Court System; Trial Courts
FY2021 Budget AmendmentFunding for Additional
IRIS Costs: $30.7 UGF
FY2021 Budget Amendment--Funding for Sitka
Courthouse Expenses: $78.3 UGF
? Alaska Court System; Appellate Courts Restoration of
Full Funding for the Appellate Court Budget: $334.7
UGF
? Alaska Court System; Trial Courts Reverse a Portion
of Additional Costs for Executive Branch Services: -
$9.1 UGF
Co-Chair Stedman stated that historically the three
branches of government had stayed out of the other
branches' budgetary issues. There had been changes made in
the legislative branch and the court system. He saw there
was an adjustment to the courts. He asked why there was not
an amendment to add back to the legislative budget and to
continue to abide by the unwritten rule of not going in to
another branch's budget.
Mr. Steininger stated that OMB had received a request from
the Judiciary for the amendments and there had been an
agreement between the administration and the Judicial
branch to restore the changes made to its budget in the
administration's budget submission in December. He could
not speak to lack of changes in the legislative budget.
Co-Chair Stedman stated that the situation did not go
unnoticed. He referenced the governor's ability to veto and
pointed out that the governor would not be able to veto
items that were not in the budget. He emphasized that the
legislature was an equal branch of government and he
recommended that the executive branch respect the
legislative branch, or there would be a bigger budget mess.
He hoped the matter would not be a recurring issue.
Mr. Steininger looked at slide 22, "Governor's Amended:
Office of the Governor":
Operating Total: $296.5 UGF
? Executive Operations; Lieutenant Governor
Provide the Alaska Administrative Code to Local
Governments: $60.0 UGF
? Elections Election Worker Pay Increase: $236.5 UGF
Mr. Steininger spoke to slide 23, "Governor's Amended:
University of Alaska":
Operating Total: $605.9 DGF
? Systemwide Reduction/Additions Alaska Technical and
Vocational Education Funding: $605.9 DGF
Mr. Steininger showed slide 24, "FY2020 Supplemental
Amendments
Co-Chair von Imhof asked to go back to slide 22. She asked
if the election worker pay increase would be an annual
increase or if the increase was for a specific reason.
Mr. Steininger explained that the increase was for workers
tasked with running the statewide general election and
other elections, whose pay had not been adjusted in some
time. Additionally, adjustments had been paid to comply
with changes to the state minimum wage.
Senator Olson understood that there was a step program for
classified employees and wondered how there had not been
increases in the past.
Mr. Steininger informed that the election workers were not
classified employees and were not subject the same salary
schedules.
Senator Olson asked if the election workers were
independent contractors.
Mr. Steininger did not know the election workers' exact
employment designation.
10:10:42 AM
Co-Chair Stedman informed that the forthcoming slides would
be addressing budget adjustments for the current year
through June.
Mr. Steininger turned to slide 25, "FY2020 Supplemental
Amendments: Judiciary (1 of 2)":
Operating Total: $489.9 UGF
? Alaska Court System; Trial Courts FY2020
Supplemental Budget RequestsFunding for Additional
IRIS Costs: $30.7 UGF
? Commission on Judicial Conduct Additional Costs for
the Conversion to Bi-weekly Payroll: $1.3 UGF
? Alaska Court System; Appellate Courts Additional
Costs for the Conversion to Bi-weekly Payroll: $29.6
UGF
? Alaska Court System; Trial Courts Additional Costs
for the Conversion to Bi-weekly Payroll: $300.8 UGF ?
Judicial Council Additional Costs for the Conversion
to Bi-weekly Payroll: $4.2 UGF
? Alaska Court System; Administration and Support
Additional Costs for the Conversion to Bi-weekly
Payroll $42.2 UGF
Mr. Steininger considered slide 26, "FY2020 Supplemental
Amendments: Judiciary (2 of 2)":
? Therapeutic Courts
Additional Costs for the Conversion to Bi-weekly
Payroll: $5.3 UGF
? Alaska Court System; Trial Courts Additional Costs
for Executive Branch Services: $75.8 UGF
Mr. Steininger detailed that the additional costs for
executive branch services were primarily related to cost
increases in risk management rates that the judicial branch
had to pay for insurance of assets and individuals.
Co-Chair von Imhof asked about Mr. Steininger's mention of
risk management rates and if it pertained to insurance of
individuals.
Mr. Steininger stated that a portion of the risk management
rates was applied based upon the number of employees within
each department. Some of the $75,800 UGF listed on the
slide was related to the risk management rates that applied
to employees.
Co-Chair von Imhof asked what insurance was being
referenced.
Mr. Steininger stated that the insurance was worker's
compensation.
Mr. Steininger displayed slide 27, "FY2020 Supplemental
Amendments: Operating Language Section":
Operating Total: $5,755.9 UGF
? Special Appropriations; Judgments, Claims, and
Settlements
FY2020 Judgments, Settlements, and Claims:
$5,755.9 UGF increase New total is $5,887.6 UGF
? Special Appropriations; Bonds for Tax Credit
Purchases
Lapse Extension: Alaska Tax Credit Certificate
Bond Proceeds Capital Total: $24,293.4 UGF
? Department of Military and Veterans Affairs; Capital
Alaska Land Mobile Radio (ALMR) Site Refresh:
$24,000.0 UGF
? Department of Public Safety; Capital Automatic
Dependent Surveillance Broadcast System for DPS
Aircraft: $293.4 UGF increase New total is $398.4 UGF
Mr. Steininger informed that the funds for the ALMR system
was to replace equipment on towers that were required to
make the system run. He added that the funds for the
Department of Public Safety aircraft were requested after a
realization that more aircraft needed the equipment than
was considered in the original request.
10:14:27 AM
Co-Chair von Imhof asked if the $24 million for ALMR was in
addition to the $7.6 million in the proposed capital budget
put out by the governor in December.
Mr. Steininger noted that there was an amendment to reduce
the $7.6 million to $5 million. He informed that the $24
million was in addition to the $5 million, which was
related to maintenance of the system. The proposed funding
on the slide related to legacy equipment that needed to be
replaced.
Co-Chair von Imhof asked for a brief summary of what ALMR
was and why it was needed.
Mr. Steininger stated that ALMR system was used for
communications by the Alaska State Troopers as well as
other law enforcement and first responders throughout the
state. The system was also used by the United States
Department of Defense. He noted that the reason for the
equipment update was that some other non-state partners
could pull out of the system if the state did not update
its portion.
Co-Chair Stedman reminded that Co-Chair von Imhof was in
charge of the capital budget and would be working on some
of the items being discussed.
Senator Olson asked about the Automatic Dependent
Surveillance Broadcast System and Federal Aviation
Association (FAA) requirements.
Mr. Steininger understood that there had been a change in
FAA requirements and that the aircraft covered under the
roughly $400,000 appropriation did not have the equipment
required by the FAA to fly in the airspace that the
department intended.
Senator Hoffman referenced the $24 million for ALMR and
asked if the total would be spent or encumbered in the
remaining four months of the fiscal year.
Mr. Steininger stated that the funds would not all be spent
in the current fiscal year, however the project had to
start within the current fiscal year to ensure that the
other users of the system did not pull out.
Senator Hoffman asked how much would be encumbered in the
next four months.
Mr. Steininger did not know how much would be expended in
the next four months. He knew the department would begin
work on the project as soon as the money was available.
Co-Chair Stedman asked Mr. Steininger to get back to the
committee with the details on the ALMR funding so that Co-
Chair von Imhof could have the information when
contemplating the capital budget.
10:18:21 AM
Senator Wilson understood that ALMR was used for public
safety communications. He inquired about a project for a
consolidated Anchorage command center being considered by
DPS.
Mr. Steininger was not familiar with the project that
Senator Wilson was referencing.
Senator Olson thought that the command center project had
to do with an enhanced 911 system.
Co-Chair Stedman stated that the command center was a
budgetary item that had caught the attention of some
members of the committee. He asked Mr. Steininger to
investigate the issue and provide more information to the
committee. He stated the committee would be working on the
issue through the operating budget process as well.
Senator Wielechowski asked for an explanation of the lapse
extension as listed on slide 27.
Mr. Steininger stated that there was authority in the prior
budget to expend the proceeds of a bond sale for the
purchase of tax credits. The amount was approximately $800
million. The lapse extension would allow the state to
utilize the authority in future years once the outcome of
the associated litigation was decided, and if it was
decided in the state's favor. With the authority, the state
could sell bonds and use the proceeds of the bonds to
purchase the tax credits. The authority was considered
duplicated authority in the state budget, but it was
necessary to in order to utilize proceeds of bond sales for
the actual purchase of tax credits.
Co-Chair Stedman stated that when LFD came before the
committee, there were some areas that were reduced (such as
the AMHS and the University of Alaska). The bigger areas
would be itemized. When dealing with statewide items such
as the Community Assistance Program and dealing with the
tax credit payment issue, he had asked LFD to line item
things for clarity as the committee considered year-to-year
changes. He thought that the public should take note that
although there were reductions made, overall spending was
up. He would be asking staff to line item major items to
see more detail of bigger reductions. He thought the
clearer the view of the budget, the higher probability a
solution would be found.
10:22:31 AM
Senator Hoffman stated that in reviewing the supplemental
request in the presentation, he thought it was clear there
was no change or request in funds for the implementation of
the Real I.D. He recalled that Senator Olson had asked
United States Senator Lisa Murkowski if she saw a need for
the implementation of the Real I.D. and about its public
safety implications for Alaskans. Her response had been
that the State of Alaska needed to present the resources to
get the Real I.D. implemented. He found it alarming that
neither funds for FY 20 nor FY 21 had been requested, since
it was a health/life/safety issue. He thought it was of
particular importance to ensure the needs of the rural
elderly were met. He asked if Mr. Steininger believed
Senator Murkowski's statement to be true.
Mr. Steininger was not familiar with the comments made by
Senator Murkowski. He continued that the Department of
Administration had not requested any additional funding
related to implementation of the Real I.D. Act.
Senator Hoffman was not concerned with what was requested
by DOA. He emphasized that his question regarded the
governor's budget request and the health/life/safety of
Alaskans regarding the Real I.D. and the comments by
Senator Murkowski. He assumed that the administration
agreed with the position of the commissioner, because there
were no funds requested.
Senator Hoffman emphasized that it was critical to ask the
question of the administration. He asked for a response to
be given by the administration on the issue, which was
critical to the health/life/safety of Alaskan citizens.
Mr. Steininger deferred the question to the DOA and the
governor's office.
10:26:51 AM
Senator Olson thought Mr. Steininger was in a difficult
position, but more so were the people that would not have a
Real I.D. after October 1st. He did not see anything in the
operating budget or capital budget to ensure that the
people in rural areas would have the opportunity to buy the
equipment necessary to furnish Real I.D.s. He thought there
seemed to be complacency on the part of the commissioner.
He thought the effort on the part of DOA was lacking and
referenced department asking the public for funds, which he
found offensive. He was very concerned about the situation.
Co-Chair Stedman thought the concern of members had been
made clear. He hoped to have dialog with the administration
regarding the matter over the following two months to
rectify the issue.
Co-Chair Stedman praised Mr. Steininger on his ability to
answer questions without lifelines and commented on the
number of items on which further information had been
requested.
Mr. Steininger showed slide 28, "Questions." He noted that
he would respond back to the committee with written answers
to the member's questions. He commented on the size of the
state's deficit.
Co-Chair Stedman thought Mr. Steininger had done well in
presenting a difficult topic. He expressed his
appreciation. He discussed the agenda for the following
day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 022720 FY21 Gov Amend SFIN Presentation 2-27-20.pdf |
SFIN 2/27/2020 9:00:00 AM |
SB 152/ SB 174 |
| 022729 OMB Response to SFIN Questions.pdf |
SFIN 2/27/2020 9:00:00 AM |