Legislature(1995 - 1996)

04/12/1995 08:35 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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  HB 100 -  APPROP: FY 96 OPERATING & LOAN BUDGET                              
                                                                               
            Subcommittee  presentations  were  made   for  the                 
            following department budgets:                                      
                                                                               
                     Office of the Governor                                    
               Dept. of Health and Social Services                             
                          Court System                                         
         Dept. of Transportation and Public Facilities                         
                     Dept. of Fish and Game                                    
                                                                               
  OFFICE OF THE GOVERNOR                                                       
                                                                               
  Co-chairman  Frank  directed attention  to  a  handout (copy                 
  appended to these minutes as Attachment A).                                  
                                                                               
  [More detailed subcommittee information on all budgets is on                 
  file in the  original Senate Finance  bill file for HB  100,                 
  available through the Legislative Finance Division.]                         
                                                                               
                                                                               
  The Co-chairman  explained that the  subcommittee philosophy                 
  was to return funding to FY 94 actual and spread the dollars                 
  in a manner as accommodating as possible.  In light of FY 94                 
  actual funding,  the administration  expressed concern  that                 
  movement of the office of  equal opportunity employment into                 
  the Governor's Office would not be taken into consideration.                 
  The subcommittee understood that but  did not acknowledge it                 
  in setting  a budgetary  cap, feeling that  funding for  the                 
  office could be absorbed within the cap.                                     
                                                                               
  Senator Donley voiced concern that the Governor's Office was                 
  sustaining a double cut under the subcommittee proposal, and                 
  he voiced a preference for funding proposed by the House.                    
                                                                               
  Co-chairman  Halford MOVED for  adoption of the subcommittee                 
  budget  for  the Office  of  the Governor  for incorporation                 
  within  HB  100.   Co-chairman Frank  called  for a  show of                 
  hands.   The subcommittee  recommendation was  ADOPTED on  a                 
  vote of 5 to 2.                                                              
                                                                               
  DEPT. OF HEALTH AND SOCIAL SERVICES                                          
                                                                               
  Co-chairman   Halford  directed   attention  to   a  handout                 
  (Attachment B) and  noted that the  budget for the Dept.  of                 
  Health  and  Social  Services  was  particularly  driven  by                 
  Medicaid  increases.  The cap represented a reduction of $32                 
  million  from  the Governor's  proposal.    The subcommittee                 
  budget  "only missed  it by  $17,446.2" in  effecting a  net                 
  reduction of $15,515.0.   The end result is that  "We didn't                 
  go  any  further  down  the   Medicaid  list,"  but  funding                 
  maintains  existing levels  of  service.   The  subcommittee                 
  budget provides flexibility  to do the job  within available                 
  dollars.  While  the Governor's Office  would have liked  to                 
  pick up Medicaid options that were  dropped in the past, the                 
  subcommittee merely avoided going further down the list.                     
                                                                               
  Senator  Zharoff inquired  regarding  reduction of  Medicare                 
  services, particularly for the elderly.  Co-chairman Halford                 
  explained that Medicare operates on a list of one to thirty-                 
  one items.   Positioning on the  list is number ten.   Items                 
  lower than that  in priority have  not been included in  the                 
  proposed budget nor  were they  included in  the budget  for                 
  last year.   The Governor  proposed an increment  to restore                 
  some of  the  services.   That  increment was  not  adopted.                 
  Existing services  will continue under  the proposed budget,                 
  but  previously eliminated  services will  not be  restored.                 
  Co-chairman  Halford added  that  the subcommittee  proposal                 
  "represents a substantial increase over  last year's budget,                 
  although still maintaining a substantial decrease under what                 
  the Governor proposed."  The  Senate budget is approximately                 
  $2 million under the House number.                                           
                                                                               
  Senator Sharp voiced his understanding that the subcommittee                 
                                                                               
                                                                               
  proposal is not a  reduction but an increase of  $17 million                 
  over last year  and a  $30 million increase  over two  years                 
  ago.  The budget for the Dept. of Health and Social Services                 
  has grown more than any  other, to meet massive needs.   Co-                 
  chairman Halford added that the problem is that the Medicaid                 
  growth rate is  approximately 20%.  The  subcommittee budget                 
  proposes to hold it at less than 11%.   The commissioner has                 
  also voiced her  intention that  "this be a  nonsupplemental                 
  budget."                                                                     
                                                                               
  Senator Zharoff asked if all  available federal dollars have                 
  been captured.  Co-chairman  Halford acknowledged that under                 
  the  existing  Medicaid program,  the  answer was  "probably                 
  not."  He  said that states can add to Medicaid and AFDC and                 
  receive  a   one-to-one  match.     Given   the  fact   that                 
  Congressional cuts are likely to be made, the state probably                 
  could not add.                                                               
                                                                               
  Co-chairman Halford  MOVED for adoption of  the subcommittee                 
  budget  for the  Dept.  of Health  and  Social Services  for                 
  incorporation  within  HB  100.    OBJECTION was  raised  by                 
  Senator  Zharoff.   Co-chairman Frank called  for a  show of                 
  hands.  The  motion CARRIED  on a vote  of 5 to  2, and  the                 
  subcommittee budget was ADOPTED.                                             
                                                                               
  ALASKA COURT SYSTEM                                                          
                                                                               
  Co-chairman Halford distributed a handout (Attachment C) and                 
  advised  that  the Court  System budget  met  its cap.   The                 
  subcommittee attempted to minimize changes  to meet the cap,                 
  particularly for trial courts which do not control their own                 
  case load and must  respond.  Maintaining funding for  trial                 
  courts and appellate courts focused cuts in judicial conduct                 
  and the Alaska  Judicial Council.  While  it is was not  the                 
  desire to cut  those areas,  they are a  much more  optional                 
  function.    The  trial  court  budget  is  still  a  slight                 
  reduction.                                                                   
                                                                               
  Senator Zharoff asked if the budget reflects  the opening of                 
  the  new   building  in  Anchorage.     Co-chairman  Halford                 
  responded negatively.  He acknowledged  that an increase was                 
  requested for the building,  but it would not fit  under the                 
  cap.  Senator Zharoff noted that  when the building is ready                 
  for occupancy, someone  will move in.  He then  asked if the                 
  committee would be  faced with  a supplemental request  next                 
  session.    Co-chairman  Halford  said   that  was  not  his                 
  intention.                                                                   
                                                                               
  Co-chairman Halford further noted that  trial courts respond                 
  to  oil  tax cases  "that  we  pursue in  order  to generate                 
  revenue  for  the  constitutional budget  reserve  account."                 
  Trial  courts  "came  back  with  a recommendation,  and  we                 
  adopted it  after  I  requested  an analysis  of  what  they                 
  thought was legitimate."   In addition to the  general fund,                 
                                                                               
                                                                               
  it takes $400.0  from the constitutional budget  reserve for                 
  dealing with those cases.   The legislature funds legal fees                 
  for those cases from the CBR.                                                
                                                                               
  Senator  Randy Phillips  voiced his  understanding that  the                 
  building in Anchorage would not  be completed until the fall                 
  of 1996.  Co-chairman Halford advised  that the Court System                 
  requested a $2 million increase for  the facility.  It would                 
  not fit under the cap.                                                       
                                                                               
  Senator Zharoff advised that he would be offering amendments                 
  relating to trial court funding.  He further asked if use of                 
  the  $400  from the  CBR  would necessitate  a three-quarter                 
  vote.    Co-chairman  Frank  responded affirmatively.    Co-                 
  chairman Halford  noted that  in the subcommittee  breakout,                 
  the $400.0 is shown under the  new court building.  However,                 
  the Court System has control over  where it moves funding in                 
  trial courts.  There remains a significant reduction in this                 
  area.                                                                        
                                                                               
  Senator Rieger  inquired concerning program  receipts within                 
  the court system.   Co-chairman Halford responded  that they                 
  all go to the  general fund.  Senator Rieger  suggested that                 
  users of  the court  system might  be willing  to fund  some                 
  activities.      Co-chairman   Halford   advised  that   the                 
  subcommittee proposal  represents a  2% reduction  from last                 
  year.    He voiced  his  belief  that the  court  system has                 
  "management ability  to save  a little  bit of  money."   He                 
  acknowledged that because of mandates  to deal with criminal                 
  cases,  the waiting list  in civil court  becomes longer and                 
  longer.  Questions arise regarding whether "We can push  the                 
  number  down  slightly  and maintain  an  adequate  level of                 
  service within the  size of that budget?"   The subcommittee                 
  felt that could  be done.   There was  not much  flexibility                 
  under the cap.                                                               
                                                                               
  Co-chairman  Halford MOVED for  adoption of the subcommittee                 
  budget for the Alaska Court  System for incorporation within                 
  HB 100.  OBJECTION was raised.  Co-chairman Frank called for                 
  a show of hands.   The motion CARRIED on a  vote of 5 to  2,                 
  and the budget was ADOPTED.                                                  
                                                                               
  DEPT. OF TRANSPORTATION AND PUBLIC FACILITIES                                
                                                                               
  Senator  Rieger explained that  the budget for  the Dept. of                 
  Transportation and Public Facilities consists of two  parts.                 
  One part is the recommendation of  the subcommittee.  At the                 
  time  the   subcommittee   closed   out,   the   chair   was                 
  reconsidering the cap.  The unallocated reduction number was                 
  thus left open.  Senator Rieger  said he would first explain                 
  the subcommittee recommendation  per his handout (Attachment                 
  D) and then  move to  amend the budget  for the  unallocated                 
  reduction.                                                                   
                                                                               
                                                                               
  The  basic approach was to  deny all general fund increments                 
  and   transfer  $200.0  in   general  funds  from  statewide                 
  engineering  to  statewide  maintenance  and  operations  to                 
  reflect the changing  nature of  DOTPF activities from  less                 
  new  construction  to  more maintenance.    Program  receipt                 
  increments  were  not denied,  but  changes in  the proposed                 
  amendment would "take  the DOT budget, inclusive  of program                 
  receipts as if  they were general  funds, down to the  FY 94                 
  actual level.  That number is $128,025.0.                                    
                                                                               
  The  handout  (Attachment  D)  would  be  amended  with  two                 
  components:                                                                  
                                                                               
       1.   An unallocated reduction of $1,384.9 to be spread                  
            at the  discretion of  the commissioner among  all                 
            components of  the department,  except the  marine                 
            highway system.                                                    
                                                                               
       2.   An unallocated  reduction of $390.6 to  the marine                 
  highway        stabilization fund.                                           
                                                                               
  Those  percentage  reductions  are intended  to  be "exactly                 
  prorata  to  the amount  of the  cut and  the size  of their                 
  respective budgets."                                                         
                                                                               
  Senator  Rieger  next  directed attention  to  two  items of                 
  intent:                                                                      
                                                                               
       1.   Requiring the allocation to  statewide maintenance                 
  and       operations, highways,  and aviation to  lapse into                 
            the general fund on August 31. 1996.                               
                                                                               
       2.   Asking   that   the  department   continue  winter                 
  maintenance         for   the   Klondike    Road   (Skagway-                 
                      Whitehorse) and encouraging the Canadian                 
                      government to increase support.                          
                                                                               
  Senator Rieger further  attested to provisions in  the front                 
  section of the  budget relating  to the Sitka  Airport.   He                 
  explained that the department is  in negotiations to realize                 
  program receipts for continued operation  since the City and                 
  Borough of  Sitka has announced  that it will  terminate its                 
  lease.  The provision will appropriate program receipts back                 
  to the department for necessary operations.                                  
                                                                               
  Senator  Zharoff  inquired  concerning  the  impact  of  the                 
  unallocated  reductions   and  advised  that  he   would  be                 
  preparing amendments in an attempt to reinstate them.                        
                                                                               
  Senator Rieger MOVED for adoption of the subcommittee budget                 
  and  intent  for  the  Dept.  of Transportation  and  Public                 
  Facilities.     No   objection  having   been  raised,   the                 
  subcommittee budget and intent were ADOPTED.  Senator Rieger                 
  then  MOVED for adoption of the amendment (See Amendment No.                 
                                                                               
                                                                               
  15  within  Attachment  D)   relating  to  the   unallocated                 
  reductions.  No objection having  been raised, the AMENDMENT                 
  was ADOPTED.  Senator Rieger MOVED for  incorporation of the                 
  subcommittee  budget,  as  amended, into  HB  100.   Senator                 
  Zharoff OBJECTED.   Co-chairman Frank  called for a  show of                 
  hands.   The motion  CARRIED on  a vote of  5 to  2, and the                 
  budget for the Dept. of Transportation and Public Facilities                 
  was incorporated within HB 100.                                              
                                                                               
  DEPT. OF FISH AND GAME                                                       
                                                                               
  Senator Sharp directed attention to a handout (Attachment E)                 
  and explained that the subcommittee recommendation meets the                 
  cap which required  a $5,321.4  reduction in general  funds.                 
  Changes include:                                                             
                                                                               
  Commercial Fisheries                                                         
       Fisheries Projects  -  Commercial  Fisheries was broken                 
  into two       separate   appropriations   and  allocations.                 
  Fisheries           projects  were  approved  at   the  full                 
                      general fund request of $14,784.2.                       
       Regional and  S.W. Admin.- The five regional commercial                 
            fisheries management programs were  added together                 
            for proposed  funding of $12,233.0.   That funding                 
            was reduced by  $1,789.5 for an adjusted  total of                 
            $10,444.0 for this separate appropriation.                         
                                                                               
  Sport Fisheries -  was increased by  $200.0 for the  Crystal                 
  Lake           Hatchery  per  a   recommendation  from   the                 
                 administration.         The    administration                 
                 recommended  removal  of   the  $200.0   from                 
                 habitat.                                                      
                                                                               
  Wildlife  Conservation  - The  $667.9  in general  funds was                 
  deleted as          proposed by the administration.                          
                                                                               
  Commissioner's   Office   -   A  miscellaneous   unallocated                 
  reduction of        $137.7 was  taken.    The  House  budget                 
                      allocates  the  reduction   to  specific                 
                      positions.   That caused  a problem  for                 
                      the   department   since   one  of   the                 
                      positions was critical  to international                 
                      treaty  work.     The  Senate   approach                 
                      provides flexibility.                                    
                                                                               
  Administrative Services  - Reduced general  funds $330.5 and                 
  replaced       some  of  the   reduction  with   interagency                 
                 receipts.                                                     
                                                                               
  Board of Fish  and Game - was held at the  status quo, FY 95                 
  level.                                                                       
                                                                               
  Advisory Regional Boards  - was held  harmless at the FY  95                 
  level.                                                                       
                                                                               
                                                                               
  Subsistence  -  All  general  funds  for   subsistence  were                 
  deleted.            Approximately  $900.0  in   other  funds                 
                      remain.                                                  
                                                                               
  Habitat - was reduced by  $711.2, and $200.0 was transferred                 
  to        sport fisheries.                                                   
                                                                               
  Habitat Permitting - was held harmless at $1,511.3, the same                 
  level          as FY 95.                                                     
                                                                               
  The  total  subcommittee  recommendation  for  general  fund                 
  expenditures is $30,366.9, a reduction of $5,321.4.                          
                                                                               
  Senator  Sharp   next  advised  that  general  fund  program                 
  receipts for Commercial Fisheries, Sport Fisheries, Wildlife                 
  Conservation,  Office  of  the  Commissioner,  Division   of                 
  Administration,  Subsistence,  Habitat,  and the  Commercial                 
  Fisheries   Entry   Commission  were   held   harmless  from                 
  reductions    and    funded,   per    the   administration's                 
  recommendation, at a total of $6,861.4.  That is an increase                 
  of $1,032.2 over FY 95.                                                      
                                                                               
  Senator Sharp referenced  the final page of  his spreadsheet                 
  and explained that it presents a  breakdown of the component                 
  for   Wildlife   Conservation,   showing   various   project                 
  allocations.  He further advised that he would be submitting                 
  an amendment to  increase bison  management from the  Senate                 
  number   of   $163.8   to  the   $332.3   proposed   by  the                 
  administration.                                                              
                                                                               
  Total FY 95 funding for the Dept. of Fish and Game, from all                 
  sources, was  $91,800.0.   The proposed  subcommittee budget                 
  for FY 96  totals $87,700.0;  a net  reduction of  $4,100.0,                 
  approximately 4.5%.                                                          
                                                                               
  Senator Sharp reiterated  that the FY  96 budget contains  a                 
  different appropriation structure than the budget for FY 95.                 
  He  referenced two  components  in Commercial  Fisheries and                 
  four  separate  appropriations  for  Wildlife  Conservation.                 
  Several  areas   have   been   combined   into   one   under                 
  Administrative  Support.   Last  year's budget  contained an                 
  appropriation  for  Office   of  the  Commissioner,   Public                 
  Communication and Administrative Services.  The subcommittee                 
  budget  adds  Boards  of  Fisheries  and Game  and  Regional                 
  Council Advisory Commissions.  Combination of these three is                 
  to provide greater  flexibility in  use of available  funds.                 
  Habitat  has  been  split into  two  appropriations  to hold                 
  harmless Habitat Permitting.  That  was done deliberately to                 
  prevent retaliation for budget cuts.                                         
                                                                               
  Co-chairman Halford noted a reduction of $3 million in other                 
  funds  and  asked  what  they  consist  of.   Senator  Sharp                 
  explained that  they are  fish and  game funds.   The  total                 
                                                                               
                                                                               
  amount was not spent  and remains in the fish and  game fund                 
  for further appropriation this year or next year.                            
                                                                               
  Senator  Sharp  next  MOVED  for   adoption  of  a  proposed                 
  amendment (See Amendment No. 6 within Attachment E) which he                 
  explained would increase  the Wildlife Conservation  BRU for                 
  species  management  by $163.8  in  fish and  game  funds to                 
  support a wood bison management  and transplant program from                 
  Canada into Alaska.  That would  raise funding to the $332.3                 
  requested by the administration.                                             
                                                                               
  FRANK RUE, Commissioner, Dept. of Fish and Game, came before                 
  committee in  response to  a question  from Senator  Donley.                 
  The Commissioner explained that the program would transplant                 
  wood  bison  from   Canada  into  Alaska  where   they  were                 
  traditionally found.    The department  believes Alaska  can                 
  support 4,000 to  5,000 bison in the Yukon Flats  area.  The                 
  bison were traditional in that area 400 to 500 years ago.                    
                                                                               
  Co-chairman  Frank called  for objections to  the amendment.                 
  No  objection  having  been  raised,  Amendment  No.  6  was                 
  ADOPTED.                                                                     
                                                                               
  Senator  Zharoff noted  that while  the subcommittee  budget                 
  presents an appearance of  a 4% reduction, when  one reviews                 
  general funds the  reduction is  approximately 13% in  those                 
  areas.   He voiced particular concern regarding Subsistence,                 
  Habitat, and Commercial  Fisheries.   Senator Sharp  advised                 
  that while Commercial Fisheries contains  75% of the general                 
  funds  in the department  budget, the  subcommittee effected                 
  only a 1.7% reduction for the BRU.                                           
                                                                               
  End:      SFC-95, #29, Side 2                                                
  Begin:    SFC-95, #31, Side 1                                                
                                                                               
  Senator Sharp MOVED for adoption  of the subcommittee report                 
  for the Dept. of  Fish and Game for incorporation  within HB                 
  100.  OBJECTION was voiced.   Co-chairman Frank called for a                 
  show of hands.  The motion CARRIED on a vote  of 5 to 2, and                 
  the subcommittee budget was incorporated within HB 100.                      
                                                                               
  OPEN AREAS                                                                   
                                                                               
  Co-chairman Frank noted that remaining budget areas open for                 
  committee discussion and action  include:  Amendments, Dept.                 
  of Labor,  Formula Programs (Senior  Citizens and  Veterans'                 
  Tax Relief),  Municipal Assistance,  Revenue Sharing,  ASMI,                 
  ATMC, AFDC, APA, and the Front Section.                                      
                                                                               
  SPENDING PLAN                                                                
                                                                               
  Senator  Zharoff  inquired   regarding  availability  of   a                 
  spending plan detailing  how the committee proposes  to meet                 
  the FY 96 budget.  Co-chairman Frank advised that it had not                 
                                                                               
                                                                               
  yet been discussed.   He acknowledged "some  open questions"                 
  regrading the source of some funding.                                        
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 9:45 p.m.                         
                                                                               

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