Legislature(2019 - 2020)SENATE FINANCE 532

02/27/2020 09:00 AM FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

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

Document Name Date/Time Subjects
022720 FY21 Gov Amend SFIN Presentation 2-27-20.pdf SFIN 2/27/2020 9:00:00 AM
SB 152/ SB 174
022729 OMB Response to SFIN Questions.pdf SFIN 2/27/2020 9:00:00 AM