Legislature(2019 - 2020)SENATE FINANCE 532

01/29/2019 09:00 AM FINANCE

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Audio Topic
09:02:07 AM Start
09:05:35 AM SB38 || SB39
10:20:46 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Supplemental Budget Legislation:
*+ SB 38 APPROP: SUPP; CAP; DISASTER RELIEF TELECONFERENCED
Heard & Held
*+ SB 39 APPROP:SUPP; REAPPROP; CAP; AMEND; REPEAL TELECONFERENCED
Heard & Held
Donna Arduin, OMB Director
SENATE BILL NO. 38                                                                                                            
                                                                                                                                
     "An  Act making  supplemental  appropriations for  fire                                                                    
     suppression   activities   and   restoration   projects                                                                    
     relating  to earthquake  disaster relief;  capitalizing                                                                    
     funds; and providing for an effective date."                                                                               
                                                                                                                                
SENATE BILL NO. 39                                                                                                            
                                                                                                                                
     "An    Act    making    supplemental    appropriations,                                                                    
     reappropriations,  and  other appropriations;  amending                                                                    
     appropriations; capitalizing  funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
9:05:35 AM                                                                                                                    
                                                                                                                                
DONNA  ARDUIN, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                    
(OMB)  introduced  herself.  She  stated that  that  it  was                                                                    
important  that,  outside  of   the  disaster  response  and                                                                    
recovery, that  there be a  supplemental that did  not spend                                                                    
additional general fund dollars.                                                                                                
                                                                                                                                
Co-Chair Stedman requested a brief work history.                                                                                
                                                                                                                                
9:06:44 AM                                                                                                                    
                                                                                                                                
LACEY  SANDERS, BUDGET  DIRECTOR, OFFICE  OF MANAGEMENT  AND                                                                    
BUDGET, discussed her work background.                                                                                          
                                                                                                                                
Ms. Sanders  discussed the  presentation, "State  of Alaska:                                                                    
Office  of  Management  and Budget;  Supplemental  Overview;                                                                    
Presentation  to  the  Senate Finance  Committee"  (copy  on                                                                    
file).  She  looked  at  slide   2,  "FY  2019  Supplemental                                                                    
Summary":                                                                                                                       
                                                                                                                                
     FY2019 Supplemental Bill                                                                                                   
                                                                                                                                
          ? Reductions in Spending                                                                                              
          ? Formula Program Adjustments                                                                                         
          ? Salary Adjustments Related to Classification of                                                                     
          Trooper Positions                                                                                                     
          ? Operating Adjustments                                                                                               
          ? Capital Projects                                                                                                    
          ? Transfers Back to the General Fund                                                                                  
                                                                                                                                
     FY2019 Disaster Supplemental Bill                                                                                          
                                                                                                                                
          ? 2018 Cook Inlet Earthquake                                                                                          
          ? Disaster Relief Fund Capitalization                                                                                 
         ? Federal Highway Administration Funding                                                                               
          ? State Facilities Costs Not Covered by Insurance                                                                     
          ? FY2019 Fire Suppression Activity                                                                                    
                                                                                                                                
Ms.  Sanders  highlighted  slide 3,  "FY  2019  Supplemental                                                                    
Requests Totals."  She stated that  the slide was  a summary                                                                    
of  the requests,  split between  the two  bills. She  noted                                                                    
that  the presentation  identified the  amount necessary  to                                                                    
fund the two bills.                                                                                                             
                                                                                                                                
Ms.  Sanders  addressed  slide   4,  "FY  2019  Supplemental                                                                    
Requests Totals."                                                                                                               
                                                                                                                                
Ms.  Sanders  looked  at  slide  5,  "FY  2019  Supplemental                                                                    
Requests Totals.                                                                                                                
                                                                                                                                
Ms. Sanders discussed slide 6, "Historical Comparison."                                                                         
                                                                                                                                
Ms. Sanders looked at slide 7, "Historical Comparison."                                                                         
                                                                                                                                
9:10:55 AM                                                                                                                    
                                                                                                                                
Ms. Sanders  pointed to the document,  "FY 2019 Supplemental                                                                    
Requests; Released January 28, 2019" (copy on file).                                                                            
                                                                                                                                
Ms. Sanders looked at item 1:                                                                                                   
                                                                                                                                
     DCCED                                                                                                                      
     National Petroleum Reserve - Alaska Impact Grant                                                                           
     Program Additional Distribution (Language)                                                                                 
                                                                                                                                
Ms. Sanders highlighted item 2:                                                                                                 
                                                                                                                                
     DOC                                                                                                                        
     MH:  Renovation and Relocation of the Women's                                                                              
     Integrated Mental Health Unit at Hiland Mountain                                                                           
     Correctional Facility                                                                                                      
                                                                                                                                
Ms. Sanders looked at item 3:                                                                                                   
                                                                                                                                
     DEC                                                                                                                        
     Statewide Per- and Polyfluoroalkyl Substances (PFAS)                                                                       
     Identification of Sites and Related Costs                                                                                  
                                                                                                                                
Senator  Hoffman  queried  the   past  work  for  PFAS,  and                                                                    
wondered why it was important to include in the request.                                                                        
                                                                                                                                
Ms. Sanders replied  that it was identified  as an increased                                                                    
health risk. The department was  beginning to identify spots                                                                    
that needed addressing.                                                                                                         
                                                                                                                                
Co-Chair  Stedman wondered  about the  timing sequence,  and                                                                    
the need for the project in the supplemental budget.                                                                            
                                                                                                                                
Ms.   Arduin  replied   that  the   request  was   for  fire                                                                    
suppression activity  at numerous airports. She  stated that                                                                    
the  department   was  identifying  the   necessary  cleanup                                                                    
locations, and would like that  activity to begin as soon as                                                                    
possible.                                                                                                                       
                                                                                                                                
Senator Hoffman  queried the locales  of where  the activity                                                                    
would occur.                                                                                                                    
                                                                                                                                
Ms. Sanders agreed to provide that information.                                                                                 
                                                                                                                                
9:15:06 AM                                                                                                                    
                                                                                                                                
Senator  Olson remarked  that his  district had  hundreds of                                                                    
airports, but  fire suppression was not  an important factor                                                                    
to  those airports.  He assumed  that  the fire  suppression                                                                    
activity  was  location-specific.  He queried  the  list  of                                                                    
those areas.                                                                                                                    
                                                                                                                                
Ms. Sanders replied that she  did not currently have a list,                                                                    
and  furthered that  that  she believed  that  the fund  was                                                                    
previously used  for test practice  with the foam  to ensure                                                                    
preparedness  in  the   event  of  a  need   for  the  fire-                                                                    
suppression.                                                                                                                    
                                                                                                                                
Senator  Olson  wondered  why   the  funding  was  currently                                                                    
necessary, because it was the middle of the winter.                                                                             
                                                                                                                                
Ms. Arduin agreed to provide that information.                                                                                  
                                                                                                                                
Senator Bishop  noted that there  were numerous  states that                                                                    
were  looking  into  entering a  class-action  lawsuit,  and                                                                    
wondered  whether Alaska  was looking  into that  lawsuit to                                                                    
help recoup some of the money.                                                                                                  
                                                                                                                                
Ms. Sanders was not aware of that information.                                                                                  
                                                                                                                                
                                                                                                                                
Co-Chair Stedman  remarked that  the inquiry could  be given                                                                    
to the Department of Law (LAW).                                                                                                 
                                                                                                                                
Senator Wilson wondered whether the  money would be for only                                                                    
state  airports,  or would  there  be  an inclusion  of  the                                                                    
municipal airports.                                                                                                             
                                                                                                                                
Ms. Sanders agreed to provide that information.                                                                                 
                                                                                                                                
Co-Chair   Stedman  felt   that  there   may  be   a  future                                                                    
presentation on the specific issue.                                                                                             
                                                                                                                                
Ms. Sanders discussed item 4:                                                                                                   
                                                                                                                                
     DMVA                                                                                                                       
     Transfer Termed Projects Unobligated Balances back to                                                                      
    the General Fund Estimated to be $817.2 (Language)                                                                          
                                                                                                                                
Ms. Sanders highlighted item 5:                                                                                                 
                                                                                                                                
     DNR                                                                                                                        
     Upgrade and Repair of Critical Volcano Monitoring                                                                          
     Instruments                                                                                                                
                                                                                                                                
Ms. Sanders looked at item 6:                                                                                                   
                                                                                                                                
     DPS                                                                                                                        
     Reappropriation     of      Capital     Projects     to                                                                    
     Maintenance/Renovation of Rural Trooper Housing -                                                                          
     Estimated to be $1,059.0 (Language)                                                                                        
                                                                                                                                
Co-Chair Stedman queried the time sensitivity of the issue.                                                                     
                                                                                                                                
Ms.  Sanders replied  that the  department identified  items                                                                    
such as  mold and broken  flooring in the housing  that must                                                                    
be quickly addressed to meet the needs.                                                                                         
                                                                                                                                
Senator  Olson remarked  that  much of  the  housing was  on                                                                    
contact and rented by the  state. He wondered whether it was                                                                    
the state's responsibility to maintain those facilities.                                                                        
                                                                                                                                
Ms. Sanders agreed to provide that information.                                                                                 
                                                                                                                                
Ms. Sanders discussed item 7:                                                                                                   
                                                                                                                                
     DPS                                                                                                                        
     Consolidate Multiple Capital Appropriations for Public                                                                     
    Safety Equipment Replacement - Net Zero (Language)                                                                          
                                                                                                                                
Senator Micciche noted that item 7 was a zero.                                                                                  
                                                                                                                                
Ms. Sanders agreed that both items 6 and 7 were net zero.                                                                       
                                                                                                                                
9:20:11 AM                                                                                                                    
                                                                                                                                
Ms. Sanders looked at item 8:                                                                                                   
                                                                                                                                
     DOT/PF                                                                                                                     
     Alaska Marine Highway System Vessel Overhaul, Annual                                                                       
     Certification and Shoreside Facilities Rehabilitation                                                                      
                                                                                                                                
Co-Chair Stedman requested the time sensitivity of the                                                                          
appropriation.                                                                                                                  
                                                                                                                                
Ms. Sanders discussed item 9:                                                                                                   
                                                                                                                                
     DOT/PF                                                                                                                     
     Klondike - Industrial Use Highway Funding                                                                                  
                                                                                                                                
Senator Shower looked at item 2. He wondered why the item                                                                       
was in the Supplemental Budget.                                                                                                 
                                                                                                                                
Co-Chair Stedman stated that the request would be included                                                                      
in the information provided at a later date.                                                                                    
                                                                                                                                
Senator Hoffman looked at item  3, and noted the request for                                                                    
$7.645  million  for  phase  1. He  queried  the  number  of                                                                    
phases,  the timeframe,  and the  amounts  of the  remaining                                                                    
phases in the program.                                                                                                          
                                                                                                                                
Ms. Sanders agreed to provide that information.                                                                                 
                                                                                                                                
Ms. Sanders highlighted item 10:                                                                                                
                                                                                                                                
     DOA                                                                                                                        
     Extension of a Lapse Date: Labor Contract Negotiations                                                                     
     and Arbitration Support from FY2019 to FY2022                                                                              
     (Language)                                                                                                                 
                                                                                                                                
Ms. Sanders discussed item 11:                                                                                                  
                                                                                                                                
     DOA                                                                                                                        
     Centralized Office of Information  Technology -                                                                            
     Information Services Fund Alignment with Anticipate                                                                        
     Expenditures                                                                                                               
                                                                                                                                
Co-Chair von Imhof  assumed that the "other"  was a transfer                                                                    
from  all the  other agencies  that formerly  had their  own                                                                    
individual  IT  employees,  and  was  a  transfer  of  money                                                                    
between accounts.                                                                                                               
                                                                                                                                
Ms. Sanders agreed.                                                                                                             
                                                                                                                                
Co-Chair von Imhof wondered how  much of the request was new                                                                    
money. She  asked whether  it was  completely a  transfer of                                                                    
funds.                                                                                                                          
                                                                                                                                
Ms. Sanders  replied that  it was not  new money,  rather it                                                                    
was bringing their budget in line with their needs.                                                                             
                                                                                                                                
Ms. Sanders addressed item 12:                                                                                                  
                                                                                                                                
     DEED                                                                                                                       
     Repeal FY2019 State Aid to School Districts - One-Time                                                                     
    Funding Appropriated Outside the Formula (Language)                                                                         
                                                                                                                                
9:25:00 AM                                                                                                                    
                                                                                                                                
Senator  Olson  felt  that  the item  had  caused  the  most                                                                    
concern.  He recalled  one-time funding  to help  the school                                                                    
districts. He stated that OMB  had announced that they would                                                                    
work collaboratively  with the school district,  and queried                                                                    
the status of that activity.                                                                                                    
                                                                                                                                
Ms. Arduin replied that there  was work with the agencies to                                                                    
identify areas  where there was cash  available, because the                                                                    
prioritization of  the fiscal situation was  important along                                                                    
side the need for disaster response and recovery.                                                                               
                                                                                                                                
Senator  Olson surmised  that the  school districts  had not                                                                    
been  contacted  by  OMB  as related  to  the  specific  $20                                                                    
million.                                                                                                                        
                                                                                                                                
Ms. Arduin  replied that  her office  had not  contacted the                                                                    
school districts.                                                                                                               
                                                                                                                                
Co-Chair  Stedman  requested  history on  the  timeline.  He                                                                    
remarked that the money was appropriated the year prior.                                                                        
                                                                                                                                
                                                                                                                                
Ms. Arduin replied in the affirmative.                                                                                          
                                                                                                                                
Ms.  Sanders furthered  that it  was standard  practice that                                                                    
the funds were distributed.                                                                                                     
                                                                                                                                
Senator  Olson   surmised  that,   before  the   funds  were                                                                    
dispersed, the department offered the $20 million.                                                                              
                                                                                                                                
Ms. Arduin replied that there  was work with the agencies to                                                                    
identify areas where  money had not been  dispersed, and the                                                                    
money was in that area of non-dispersal.                                                                                        
                                                                                                                                
Senator Hoffman  remarked that there  was an  additional $30                                                                    
million for FY 20 in HB  287. He wondered whether it was the                                                                    
administration's  position  that  the $30  million  one-time                                                                    
appropriation would be left alone.                                                                                              
                                                                                                                                
Ms. Arduin  replied that it  would be addressed  on February                                                                    
13 with the remaining FY 20 recommendations.                                                                                    
                                                                                                                                
Senator Bishop felt  that the school districts  needed to be                                                                    
contacted about  the need  for the money,  and then  talk to                                                                    
the agencies.                                                                                                                   
                                                                                                                                
9:30:23 AM                                                                                                                    
                                                                                                                                
Senator Micciche wondered whether  the districts had planned                                                                    
to the  dollars, and  whether the  districts were  caught by                                                                    
surprise.                                                                                                                       
                                                                                                                                
Ms. Arduin  replied that it  was her contention  that school                                                                    
districts and  other entities that  expected money  from the                                                                    
state  should not  be anticipating  spending money  that had                                                                    
not been allocated to them.                                                                                                     
                                                                                                                                
Co-Chair Stedman  queried an  explanation of  the difference                                                                    
between appropriation and allocation.                                                                                           
                                                                                                                                
Ms.  Arduin replied  that money  was appropriated  to school                                                                    
districts through  the funding formula  for FY 19,  and that                                                                    
money would be distributed. The  proposal was money that was                                                                    
appropriated  outside  of  the  formula, and  had  not  been                                                                    
distributed to  districts, so it  had not been  allocated to                                                                    
them.                                                                                                                           
                                                                                                                                
Co-Chair  von Imhof  stressed that  there  were 17  agencies                                                                    
that  had  planned  their budget  accordingly  whatever  the                                                                    
timing  was  allocated for  the  cash  for the  full  twelve                                                                    
months. She  noted that  the budget was  set in  the summer,                                                                    
and there was already program  planning. She asked what made                                                                    
education different from other  agencies, and whether or not                                                                    
that  should be  done  to any  agency.  She understood  that                                                                    
there was a need to save  money for the 2019 year, and noted                                                                    
that education  had been examined.  She stressed  that there                                                                    
were other agencies  that could be examined in  the same way                                                                    
as education.                                                                                                                   
                                                                                                                                
Senator Hoffman recalled  two bills that were  passed in the                                                                    
previous session, that were made  into law. He felt that the                                                                    
administration's  position   was  that  the  law   would  be                                                                    
followed.  He recalled  that the  governor had  specifically                                                                    
focused  on the  law  when  it came  to  the Permanent  Fund                                                                    
Dividends  (PFDs). He  queried  the  difference between  the                                                                    
requirement of  the law on dividends  and the law on  SB 142                                                                    
and HB 287 from the previous session.                                                                                           
                                                                                                                                
Ms. Arduin  replied that appropriations were  the law, until                                                                    
there  was a  request to  change them.  She stated  that the                                                                    
administration was requesting a  change in the appropriation                                                                    
to the department.                                                                                                              
                                                                                                                                
Senator  Hoffman  wondered  whether  the  request  would  be                                                                    
implemented by  the administration,  if the  legislature did                                                                    
not change the law.                                                                                                             
                                                                                                                                
Ms. Arduin replied in the affirmative.                                                                                          
                                                                                                                                
Co-Chair Stedman  queried the timeframe of  the execution of                                                                    
the appropriation.                                                                                                              
                                                                                                                                
Ms. Arduin replied that OMB  would wait for feedback through                                                                    
the legislature's actions on the proposal.                                                                                      
                                                                                                                                
9:35:07 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski  noted that  in  the  year prior,  the                                                                    
legislature  had appropriated  tens of  millions of  dollars                                                                    
more for refundable oil tax  credits than was owed under the                                                                    
statute.  He wondered  whether there  was an  examination of                                                                    
cutting  those extra  funds that  were appropriated  for oil                                                                    
tax credits instead of education.                                                                                               
                                                                                                                                
                                                                                                                                
Ms. Arduin  replied that the statutory  required tax credits                                                                    
were not met  in the FY 19 budget, and  only $100 million of                                                                    
those were in the appropriation.                                                                                                
                                                                                                                                
Senator Wielechowski disagreed with that interpretation.                                                                        
                                                                                                                                
Senator Wilson wondered whether  the Department of Education                                                                    
and  Early  Development  (DEED)  was  expecting  the  school                                                                    
districts to use  their savings budget of  a collective $130                                                                    
million to help pay for some of the shortfalls.                                                                                 
                                                                                                                                
Ms. Arduin  replied that the money  was appropriated outside                                                                    
of the formula. The formula  was fully funded for the school                                                                    
year.                                                                                                                           
                                                                                                                                
Ms. Sanders looked at item 13:                                                                                                  
                                                                                                                                
     DEED                                                                                                                       
     School Broadband Access Grant Reduction                                                                                    
                                                                                                                                
Senator   Olson  stressed   that  broadband   was  extremely                                                                    
important for students  in the outlying areas.  He noted the                                                                    
low  graduation rate.  He wondered  whether  there were  not                                                                    
enough  applications for  the allocated  money, and  queried                                                                    
the reason for the low application rate.                                                                                        
                                                                                                                                
Ms. Sanders replied  that based on the  applications, it was                                                                    
in excess  of that.  The applications received  the eligible                                                                    
amount.                                                                                                                         
                                                                                                                                
Senator Olson  requested the  reason that  more applications                                                                    
were not received.                                                                                                              
                                                                                                                                
Ms. Sanders agreed to provide that information.                                                                                 
                                                                                                                                
Co-Chair  von  Imhof wondered  whether  the  removal of  the                                                                    
money would be forfeiting some federal match dollars.                                                                           
                                                                                                                                
Ms. Sanders agreed to provide that information.                                                                                 
                                                                                                                                
Senator  Wielechowski  requested   any  impacts  to  federal                                                                    
funding on the requests.                                                                                                        
                                                                                                                                
Co-Chair Stedman  surmised that the  request was for  OMB to                                                                    
provide  the committee  with  a list  of  potential loss  of                                                                    
federal funds, because of lack of a match.                                                                                      
                                                                                                                                
Senator Wielechowski replied in the affirmative.                                                                                
                                                                                                                                
Ms. Sanders highlighted item 14:                                                                                                
                                                                                                                                
     DFG                                                                                                                        
     Information Technology Systems Upgrade and Maintenance                                                                     
                                                                                                                                
Senator  Wilson  looked at  item  11,  and wondered  whether                                                                    
there were  other departments that  had lower  initial rates                                                                    
that would  be seen  in the upcoming  budget. He  also asked                                                                    
whether  there  would  be  additional  requests  from  those                                                                    
agencies.                                                                                                                       
                                                                                                                                
Ms. Sanders  replied that as  there was a transition  of the                                                                    
Centralized  Office  of  Information Technology,  there  was                                                                    
work with  departments to identify  needs, and  would return                                                                    
to the committee on February 13.                                                                                                
                                                                                                                                
9:40:49 AM                                                                                                                    
                                                                                                                                
Ms. Sanders discussed item 15:                                                                                                  
                                                                                                                                
     DHSS                                                                                                                       
     Medicaid Federal Funding - Implementation of Tribal                                                                        
     Health Community Aid/Behavioral Health Aid Program                                                                         
     (Language)                                                                                                                 
                                                                                                                                
Ms. Sanders looked at item 16:                                                                                                  
                                                                                                                                
     DHSS                                                                                                                       
     Medicaid Funding - FY2018 Medicaid Claims Paid in                                                                          
     FY2019                                                                                                                     
                                                                                                                                
Co-Chair von Imhof wondered whether  the supplemental of $15                                                                    
million would  fully fund  FY 19, so  the payments  were not                                                                    
intended to push forward to FY 20.                                                                                              
                                                                                                                                
Ms. Sanders replied in the affirmative.                                                                                         
                                                                                                                                
Co-Chair von Imhof looked at  the $31 million of anticipated                                                                    
FY 19 costs  available due to the  delayed implementation of                                                                    
Medicaid managed  care. She felt that  sometimes not funding                                                                    
programs caused spending  money in order to  save money. She                                                                    
wondered whether  the delay would  result in  the department                                                                    
examining the item,  and would learn more about  the item in                                                                    
2020.                                                                                                                           
                                                                                                                                
Ms. Sanders replied in the affirmative.                                                                                         
                                                                                                                                
Ms. Sanders highlighted item 17:                                                                                                
                                                                                                                                
     DPS                                                                                                                        
     Funding for Salary Adjustments due to Classification                                                                       
     Action for State Troopers to Retain and Recruit                                                                            
                                                                                                                                
Senator Micciche  assumed the second  step might be  seen on                                                                    
February 13.                                                                                                                    
                                                                                                                                
Co-Chair  Stedman requested  further history  on the  issue,                                                                    
and the upcoming FY 20 budget.                                                                                                  
                                                                                                                                
Ms. Sanders stated that there  had been conversations in the                                                                    
previous session about the ability  of the state to fill and                                                                    
recruit the  trooper positions. She noted  that the contract                                                                    
for those positions was closed,  so the prior administration                                                                    
worked  with the  union to  complete a  classification study                                                                    
outside  of the  normal  process.  The classification  study                                                                    
resulted in  a one-range  increase for those  positions, and                                                                    
would have  additional salary increases  in FY 20  under the                                                                    
agreement.                                                                                                                      
                                                                                                                                
Ms. Sanders looked at item 18:                                                                                                  
                                                                                                                                
     DPS                                                                                                                        
     Align Village Public Safety Officer (VPSO) Program                                                                         
     Funding (Based on Anticipated Lapse)                                                                                       
                                                                                                                                
9:44:59 AM                                                                                                                    
                                                                                                                                
Senator Hoffman  stated that  item 17  and 18  were directly                                                                    
related.  He   recalled  that  when  the   unfilled  trooper                                                                    
positions were  addressed, the  department stated  that they                                                                    
were  unable to  fill  those positions  because  of the  pay                                                                    
scale. He  shared that  the salary  structure for  the VPSOs                                                                    
needed  to  also  be  readdressed.   He  stressed  that  the                                                                    
recruitment of the positions needed to be upscaled.                                                                             
                                                                                                                                
Co-Chair Stedman requested more detail about the concern.                                                                       
                                                                                                                                
Ms. Arduin  replied that the  administration was  working on                                                                    
recruitment and retention for troopers and VPSOs.                                                                               
                                                                                                                                
9:50:06 AM                                                                                                                    
                                                                                                                                
Senator Bishop agreed with Senator  Hoffman. He offered help                                                                    
with those concerns.                                                                                                            
                                                                                                                                
Senator  Shower recalled  that in  the previous  five years,                                                                    
the VPSO program had not  spent more than $10.5 million, but                                                                    
was funded at  close to $13 million. There  was an amendment                                                                    
to cut the  $1 million. He queried the  process in examining                                                                    
the history of the use of the funds within the programs.                                                                        
                                                                                                                                
Co-Chair Stedman  further wondered  why the  specific number                                                                    
was chosen.                                                                                                                     
                                                                                                                                
Ms. Arduin replied that the  current year had an examination                                                                    
of what money would not  be spent, despite the agency's best                                                                    
efforts.  She  also stated  that  there  was a  lookback  to                                                                    
examine the areas that  were consistently underutilizing the                                                                    
appropriations.                                                                                                                 
                                                                                                                                
Senator Shower requested data that  showed that the troopers                                                                    
were leaving due to the pay.                                                                                                    
                                                                                                                                
Co-Chair  Stedman   asked  for   more  background   for  the                                                                    
appropriation request.                                                                                                          
                                                                                                                                
Co-Chair von Imhof  noted the "use it or  lose it" potential                                                                    
behavior. She pointed  out that if money was  not being used                                                                    
was  pulled   from  different   agencies,  there   could  be                                                                    
potential ramifications  of behavior by  particular agencies                                                                    
to spend the money to the allowable degree.                                                                                     
                                                                                                                                
Ms.  Arduin shared  that the  agencies had  been working  to                                                                    
identify money  that they would  not be using, and  to offer                                                                    
the money to  support the disaster response  and recovery in                                                                    
the supplemental budget.                                                                                                        
                                                                                                                                
Senator Olson  felt it was  troubling that the  governor had                                                                    
stated that his  number one priority was  public safety, but                                                                    
there were budget  reductions. He recalled a  tragedy in his                                                                    
district with the death of  Ashley Barr Johnson. He remarked                                                                    
that VPSO  also had trouble with  recruitment and retention.                                                                    
He  recalled that  the nonprofits'  hands were  tied by  the                                                                    
state in  order to  use their funds.  He queried  the reason                                                                    
for the  lack of  coordination for  those nonprofits  to use                                                                    
the extra money.                                                                                                                
                                                                                                                                
9:56:23 AM                                                                                                                    
                                                                                                                                
Ms.  Arduin deferred  to  the agency,  and  stated that  her                                                                    
office  did not  communicate directly  with those  grantees.                                                                    
She  stated that  her office  had been  told that  the money                                                                    
would not be spent in the agency.                                                                                               
                                                                                                                                
Senator Olson  wanted to know  why the nonprofits  could not                                                                    
use the money, even with legislative intent for that issue.                                                                     
                                                                                                                                
Ms.  Arduin  replied  that the  agency  would  provide  that                                                                    
information.                                                                                                                    
                                                                                                                                
Senator  Wielechowski queried  the analysis  regarding other                                                                    
funds that were expected to lapse.                                                                                              
                                                                                                                                
Ms.  Arduin  replied  that  the  analysis  was  to  ask  the                                                                    
agencies  which  monies were  not  being  used and/or  would                                                                    
lapse.                                                                                                                          
                                                                                                                                
Senator Wielechowski  surmised that  this was the  only item                                                                    
in the entire budget that would lapse.                                                                                          
                                                                                                                                
Ms. Arduin  responded in  the negative.  She stated  that it                                                                    
was the best information provided by the agency to OMB.                                                                         
                                                                                                                                
Senator  Shower queried  the  operational  model within  the                                                                    
Department  of Public  Safety (DPS)  to determine  the split                                                                    
with the VPSO.                                                                                                                  
                                                                                                                                
Ms. Arduin replied that the  department would follow up with                                                                    
the information.                                                                                                                
                                                                                                                                
Ms. Sanders discussed item 19:                                                                                                  
                                                                                                                                
     DPS                                                                                                                        
     Training Academy Receipt Authority to Fully Collect                                                                        
     Revenue from Municipalities                                                                                                
     DGF: $150,000                                                                                                              
     Total: $150,000                                                                                                            
                                                                                                                                
Senator Micciche recalled that the  state was paying for the                                                                    
academy  training  for  the  municipalities,  and  then  the                                                                    
municipalities would hire the  state troopers. He noted some                                                                    
cost shift as part of  the effort. He wondered whether there                                                                    
was  an expectation  of  a higher  number,  and whether  the                                                                    
$150,000  was  simply  a  difference  of  the  16  hours  of                                                                    
increased sexual assault training.                                                                                              
                                                                                                                                
10:00:00 AM                                                                                                                   
                                                                                                                                
Ms. Sanders highlighted item 20:                                                                                                
                                                                                                                                
     DPS                                                                                                                        
     Align Fund Sources for the Management of Funds to                                                                          
     Reflect Allocation Plans                                                                                                   
     UGF: ($148,200)                                                                                                            
     Other: $148,200                                                                                                            
                                                                                                                                
Ms. Sanders discussed item 21:                                                                                                  
                                                                                                                                
     DOT/PF                                                                                                                     
     Projected Motor Fuel Tax Revenue Shortfall - Estimated                                                                     
     to be $884.9 (Language)                                                                                                    
     UGF: $884,900                                                                                                              
     DGF: ($884,900)                                                                                                            
                                                                                                                                
Co-Chair Stedman wondered  whether the reason was  due to an                                                                    
overestimate of the  amount of burnt fuel,  or an exuberance                                                                    
of the number used in the budget.                                                                                               
                                                                                                                                
Ms.  Arduin  replied that  it  was  an overestimate  of  the                                                                    
amount spent, including depending upon the price of fuel.                                                                       
                                                                                                                                
Senator Micciche  noted that  the price  was 8.95  cents per                                                                    
gallon,  so he  wondered whether  it was  the actual  amount                                                                    
purchased.                                                                                                                      
                                                                                                                                
Ms. Arduin replied in the  affirmative, and remarked that it                                                                    
was  difficult to  determine the  exact amount  of collected                                                                    
fuel tax.                                                                                                                       
                                                                                                                                
Co-Chair Stedman  wondered whether there were  any budgetary                                                                    
issues between the DGF and UGF categories.                                                                                      
                                                                                                                                
Ms. Sanders  replied in the affirmative,  and furthered that                                                                    
it  was  difficult  to  budget   when  there  were  one-year                                                                    
projected receipts.                                                                                                             
                                                                                                                                
Co-Chair Stedman queried the use of the money.                                                                                  
                                                                                                                                
Ms. Sanders responded  that the funds were  for the highways                                                                    
in the state.                                                                                                                   
                                                                                                                                
Co-Chair Stedman wondered whether  the money was for general                                                                    
repair, such as pothole repair.                                                                                                 
                                                                                                                                
Ms. Sanders agreed.                                                                                                             
                                                                                                                                
Ms. Sanders looked at item 22:                                                                                                  
                                                                                                                                
     DOT/PF                                                                                                                     
     Whittier Tunnel Project Loan Payoff                                                                                        
                                                                                                                                
Ms. Sanders highlighted item 23:                                                                                                
                                                                                                                                
     Debt                                                                                                                       
     Updated Estimate for School Debt Reimbursement                                                                             
     (Language)                                                                                                                 
                                                                                                                                
Senator Olson  wondered how the communities  were chosen for                                                                    
the line item.                                                                                                                  
                                                                                                                                
Ms.  Sanders recalled  that anticipated  debt sales  came in                                                                    
below target, and there were  larger federal subsidy amounts                                                                    
available.                                                                                                                      
                                                                                                                                
Co-Chair  Stedman requested  further  information about  the                                                                    
specific communities.                                                                                                           
                                                                                                                                
Senator  Wielechowski noted  that  there was  a request  for                                                                    
departments to  provide a  list of funds  that would  not be                                                                    
expended.  He requested  a list  of the  responses from  the                                                                    
departments about the  funds that were expected  to lapse in                                                                    
the budget.                                                                                                                     
                                                                                                                                
Ms.  Arduin replied  that the  budget  represented the  list                                                                    
that was received from the departments.                                                                                         
                                                                                                                                
10:04:12 AM                                                                                                                   
                                                                                                                                
Ms. Sanders addressed item 24:                                                                                                  
                                                                                                                                
     Retirement                                                                                                                 
     Updated Amount for the Elected Public Officers                                                                             
     Retirement System Benefits (Language)                                                                                      
                                                                                                                                
Ms. Sanders looked at item 25:                                                                                                  
                                                                                                                                
     Fund Transfer                                                                                                              
     Transfer  Balance  Large  Passenger Vessel  Gaming  and                                                                    
     Gambling  Tax   Account  to  AK  Capital   Income  Fund                                                                    
     (Previously transferred  to the AMHS Fund)  - Estimated                                                                    
     to be $10.1 million (Language)-                                                                                            
                                                                                                                                
Ms. Sanders highlighted item 26:                                                                                                
                                                                                                                                
     Fund Transfer                                                                                                              
     Transfer $3 million from AMHS Fund to Information                                                                          
     Services Fund (Language)                                                                                                   
                                                                                                                                
Co-Chair  Stedman  queried  the definition  of  the  Capital                                                                    
Income Fund.                                                                                                                    
                                                                                                                                
Ms.  Sanders  replied  that  it   was  a  fund  set  up  and                                                                    
designated for deferred maintenance needs.                                                                                      
                                                                                                                                
Senator  Bishop   stressed  that  there  would   be  another                                                                    
supplemental request to repair the other vessels.                                                                               
                                                                                                                                
Senator Micciche wondered  why $3 million was  chosen out of                                                                    
the $13 million total.                                                                                                          
                                                                                                                                
Ms.  Sanders  stated  that  item  25  was  a  $10.1  million                                                                    
appropriation.                                                                                                                  
                                                                                                                                
Senator  Micciche looked  at the  component totals  of $13.1                                                                    
million.                                                                                                                        
                                                                                                                                
Ms. Sanders  stated that Senator Micciche  was combining the                                                                    
two items. She  explained the transfer. She  stated that all                                                                    
the agencies provided funding available  to meet the state's                                                                    
needs,  and there  was $13.1  million  available to  address                                                                    
deferred   maintenance  and   the   Office  of   Information                                                                    
Technology.                                                                                                                     
                                                                                                                                
Senator Micciche  wondered whether  there was  an evaluation                                                                    
on the split.                                                                                                                   
                                                                                                                                
Ms. Sanders  replied that  it was  the amount  necessary for                                                                    
the  Information  Services  Fund  to  allow  for  the  stair                                                                    
stepping.                                                                                                                       
                                                                                                                                
10:10:21 AM                                                                                                                   
                                                                                                                                
Co-Chair  von  Imhof  wondered  whether  the  accounts  were                                                                    
strict on how the money could be utilized.                                                                                      
                                                                                                                                
Ms. Sanders remarked that there was work with the agencies                                                                      
to determine their individual needs.                                                                                            
                                                                                                                                
Ms. Sanders looked at item 27:                                                                                                  
                                                                                                                                
     Fund Cap                                                                                                                   
     Alaska Gasline Development Corporation  - Transfer $5                                                                      
     million back to the General Fund (Language                                                                                 
                                                                                                                                
Senator Hoffman wondered what would occur at the end of the                                                                     
fiscal year, if the $5 million was not spent.                                                                                   
                                                                                                                                
Ms. Sanders replied that the funds would remain in the                                                                          
fund.                                                                                                                           
                                                                                                                                
Co-Chair von Imhof noted that there was approximately $25                                                                       
million in reductions, but noted that it had not yet                                                                            
addressed the full shortfall of over a billion dollars.                                                                         
                                                                                                                                
Co-Chair Stedman remarked that the items would be                                                                               
readdressed in later meetings.                                                                                                  
                                                                                                                                
Ms. Sanders discussed item 28:                                                                                                  
                                                                                                                                
     DNR                                                                                                                        
     Fire Suppression Activity (Language                                                                                        
                                                                                                                                
Ms. Sanders addressed item 29:                                                                                                  
                                                                                                                                
     DOT/PF                                                                                                                     
     Earthquake Response, Repair and Rebuild for State                                                                          
     Facilities (Language                                                                                                       
                                                                                                                                
Ms. Sanders pointed to item 30:                                                                                                 
                                                                                                                                
     DOT/PF                                                                                                                     
     Earthquake Response, Repair and Rebuild Multi-Year                                                                         
     FY19-FY20 - $65 million estimate with $6.5 million                                                                         
     match requirement - FHWA (Language)                                                                                        
                                                                                                                                
Ms. Sanders addressed item 31:                                                                                                  
                                                                                                                                
     Fund Cap                                                                                                                   
     Capitalization of the Disaster Relief Fund (Language)                                                                      
                                                                                                                                
10:15:16 AM                                                                                                                   
                                                                                                                                
Senator Wilson  requested a list from  the administration on                                                                    
the use of the funds.                                                                                                           
                                                                                                                                
Co-Chair Stedman asked that the  request be submitted to the                                                                    
Department   of   Transportation   and   Public   Facilities                                                                    
(DOT/PF).                                                                                                                       
                                                                                                                                
Ms. Arduin  agreed to provide  that information.  She stated                                                                    
that the information would be updated throughout the year.                                                                      
                                                                                                                                
Senator  Micciche   looked  at  the   wildland  firefighting                                                                    
appropriation.  He   wondered  whether  the   request  would                                                                    
provide money without an emergency declaration.                                                                                 
                                                                                                                                
Ms.  Sanders shared  that  there was  work  to identify  the                                                                    
average  low for  the fire  suppression. The  amount in  the                                                                    
operating  budget  had  historically been  underfunded.  The                                                                    
intent was to move forward with the amount necessary.                                                                           
                                                                                                                                
Co-Chair  Stedman  requested  a   layout  of  the  budgetary                                                                    
request in  FY 19 to address  oil tax credits, and  what had                                                                    
been and would be appropriated in FY 19.                                                                                        
                                                                                                                                
Ms. Arduin  replied that  the statutory  minimum requirement                                                                    
for  FY 19  was approximately  $184 million,  of which  only                                                                    
$100 million was appropriated.                                                                                                  
                                                                                                                                
Co-Chair Stedman requested a written response.                                                                                  
                                                                                                                                
SB  38  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SB  39  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
012919 FY19_Supplemental_Summary_1-28-19.pdf SFIN 1/29/2019 9:00:00 AM
SB 38, SB 39
012919 FY2019 Supplemental Overview for SFC.pdf SFIN 1/29/2019 9:00:00 AM
SB 38, SB 39
013119 Letter to Sen Finance CoChairs re companion services 012919.pdf SFIN 1/29/2019 9:00:00 AM
Medicaid Services
012919 to accomany response letter - FY19 Supplemental Summary.pdf SFIN 1/29/2019 9:00:00 AM
Supplemental FY19
012919 OMB Response to SFC.pdf SFIN 1/29/2019 9:00:00 AM
Supplemental FY19
012919 to accompany OMB response - Recruitment-Retention-Plan-Overview-2018-2023.pdf SFIN 1/29/2019 9:00:00 AM
Supplemental FY19