Legislature(1993 - 1994)
03/17/1993 01:32 PM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 17, 1993
1:32 p.m.
TAPE HFC 93-48, Side 1, #000 - end.
TAPE HFC 93-48, Side 2, #000 - end.
TAPE HFC 93-49, Side 1, #000 - #455.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee to order
at 1:32 p.m.
PRESENT
Co-Chair Larson Representative Hoffman
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Foster Representative Therriault
Representative Grussendorf
ALSO PRESENT
Mike Greany, Director, Legislative Finance Division; John A.
Sandor, Commissioner, Department of Environmental
Conservation; Janice Adair, Assistant Commissioner,
Department of Environmental Conservation; Frank Turpin,
Commissioner, Department of Transportation and Public
Facilities; Ron Lind, Director, Plans, Programs and Budget,
Headquarters, Department of Transportation and Public
Facilities; W. Keith Gerken, Deputy Commissioner,
Operations, Department of Transportation and Public
Facilities; Steven A. Torok, Chief, State Operations, United
States Environmental Protection Agency.
SUMMARY INFORMATION
HB 55 "An Act making appropriations for the operating
and loan program expenses of state government and
to capitalize funds; and providing for an
effective date."
SUBCOMMITTEE CLOSEOUTS: ENVIRONMENTAL
CONSERVATION
TRANSPORTATION & PUBLIC
FACILITIES
HOUSE BILL NO. 55
"An Act making appropriations for the operating and
loan program expenses of state government and to
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capitalize funds; and providing for an effective date."
Co-Chair Larson reviewed the full committee close out and
amendment process. Representative Brown stressed the need
for a statewide teleconference on HB 55. She stated that
public comment was not taken during some department
subcommittee meetings she attended. Representative Parnell
and Representative Martin asserted that public testimony was
taken at the meetings they chaired. Representative Navarre
emphasized that not all House Finance Committee members were
able to hear the public testimony provided during
subcommittee meetings.
Members discussed the need for public hearings and comment.
Members considered means of distributing budget information
to the public. Representative Navarre noted that the format
of HB 55 is difficult to understand. He emphasized the need
to summarize subcommittee changes.
Co-Chair Larson decided to hold a meeting on March, 20,
1993, to allow public testimony on HB 55 and proposed
amendments to HB 55.
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
The Department of Environmental Conservation budget
subcommittee consisted of Chair Therriault with members
Representatives Brown, Davis, Finkelstein and Parnell.
Fourteen meetings were held in February and March, and the
budget was closed on March 15th.
Representative Therriault provided members with a
Transaction Summary for Governor to House (Attachment 1).
Representative Therriault explained that the target General
Fund reduction was $1,185 million dollars. The DEC agency
summary shows a reduction of $1,040 million general fund
dollars, a $165.2 thousand dollar reduction in general fund
match, and an increase in program receipt authority of
$444.4 thousand dollars. This is a reduction of $760.8
thousand dollars, or 4 percent, in total general fund
expenditures. The subcommittee recommended reductions in
Response Fund expenditures and Storage Tank Assistance Fund
expenditures.
Representative Therriault observed that the transaction
summary shows the subcommittee's recommendations and the
transactions that were required to return DEC's budget to a
project budget. DEC originally submitted their budget in a
regional format, the budget was returned to the FY 93
format. The subcommittee felt that a regional format
created an accountability problem for the Legislature.
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Representative Therriault observed that there are
adjustments to be made regarding the position count on the
transaction summaries. There are still some positions to
be reconciled with the Department.
Representative Therriault reviewed the transaction
summaries:
1. Commissioner's Office:
There was a $20.0 thousand dollar reduction in
contractual for the John Freshman lobbyist contract.
This contract was previously split between the
Governor's office and DEC. The Subcommittee felt that
as a matter of policy, the contract should be handled
through the Governor's office.
There was a $7.5 thousand dollar reduction in travel.
2. Administrative Services:
There was a $7.5 thousand dollar reduction in travel.
There was a $13.3 thousand dollar reduction in library
services. This eliminates subscription contents
service and a part-time college intern position.
There was a $60.0 thousand dollar reduction in accounts
payable. This eliminates an accounting technician I.
Slowdowns in payments to vendors may result.
There was a $34.4 thousand dollar reduction. This
changes an administrative personnel position from PFT
to PPT.
Environmental Quality
Representative Therriault noted that the rest of the
transactions on page 1 (lines 3 and 5) are the result of
reformatting the Department of Environmental Conservation,
budget back to a program format. He observed that SERO is
the Southeast Regional Office, SCRO is the Southcentral
Regional Office, NRO in the Northern Regional Office, PCRO
is the Pipeline Corridor Regional Office.
6. Environmental Quality Director:
There is an unidentified general fund reduction of
$400,000 thousand dollars to the Environmental Quality
Director component. The Governor has submitted an
amendment to reduce this to $200,000 thousand dollars.
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There is a $30.0 thousand dollar reduction in the
Director's Office, for the Freshman contract. This is
the only transaction under the Environmental Quality
Director's component that was a recommendation of the
subcommittee.
7. Monitoring and Lab Support
This component was restructured by the Subcommittee.
9. Drinking water:
There is a $ $7.1 thousand dollar reduction in the
Drinking Water Program. This was offered as part of
the 1 percent reduction scenario, reductions will be in
travel and equipment.
4
10. Waste Water and Water treatment:
There is a $158.0 thousand dollar general fund
reduction in Domestic Waste Water with a $144.4
thousand dollar increase in program receipt authority.
The Department will maintain its certified installer
program, the program receipts will be realized by
raising fees from $250 dollars to $320 dollars for
septic system certification. The Department will
continue to work with lending institutions and private
engineers to privatize this program. The Subcommittee
Chair recommends that this program be turned over to
the private sector in FY 95.
There is a $300.8 thousand dollar general fund
reduction in Industrial Waste Water, with an increase
of $300.0 thousand dollars in program receipt
authority. The Department feels their program receipt
authority was underestimated for FY 94.
11. Solid and Hazardous Waste Management:
There is a $10.1 thousand dollar reduction in the Solid
and Hazardous Waste component to be taken in travel and
equipment. This was offered in the 1 percent reduction
scenario from the Department.
The $80.0 thousand dollar reduction in Solid Waste is
for "Dump Day". This $80.0 thousand dollars was
allocated to Solid Waste from the Hazardous Waste
program, but was the lowest priority for the
reallocation of Hazardous Waste funds.
12. Air Quality Management:
This component was part of the budget structure change.
13. Water Quality Management:
The $22.4 thousand dollar reduction in Water Quality
Management, was proposed in the Department's 1 percent
reduction scenario and will be taken in travel and
equipment.
Lines 15-19:
These components are budget structure transactions.
Spill Prevention and Response
5
20. Director's office:
There is a $8.6 thousand dollar reduction in Response
Funds for travel.
There is a $189.3 thousand dollar reduction in the
Response Fund for Geographic Information System (GIS).
The GIS program will be implemented in phases.
23. Contaminated Sites:
There is a $285.0 thousand dollar Response Fund
reduction for contaminated site work. The Director of
SPAR indicated this reduction could be managed in the
Contaminated Sites Section.
There is a $3.6 thousand dollar Response Fund reduction
in Legal Services. New procedures have been instituted
to reduce Legal Services costs. A full-time position
was approved to assist the Department's paralegal.
There is a $1.0 thousand dollar Response Fund reduction
for Environmental Crimes. The Department believes
small reductions in Environmental Crimes are
manageable.
There is a $2.2 thousand dollar Response Fund reduction
in State and Regional Planning and Training. Training
may be delayed for future fiscal years.
There is a $22.0 thousand dollar Response Fund
reduction in lab sampling and analysis. Preliminary
investigation and assessment costs may be charged to
projects or the Spill Reserve. This may cause delays
in sampling through the Department of Environmental
Conservation's lab.
There is a $834.6 Response Fund reduction in state lead
site cleanup. This leaves $800.0 thousand dollars.
There is a $3.9 reduction in travel.
There is a $32.0 thousand dollar reduction in general
fund match for Contaminated Sites. The match can be
made with Response Fund expenditures without an
increase to the Governor's request.
24. Storage Tank Assistance Program:
There is a $133.2 reduction in general fund match for
the Storage Tank Assistance Fund. The match can be
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made with proposed Storage Tank Assistance Fund
expenditures.
There is a $200 hundred dollar Response Fund reduction
in the Environmental Crimes component.
There is a $5.0 thousand dollar Response Fund reduction
for lab sampling and analysis.
There is a $21.0 thousand dollar reduction to Claims
Processing. The Department hopes to develop internal
efficiencies. The $16.0 thousand dollar reduction is
from the Storage Tank Assistance Fund (STAF), $5.0
thousand dollars is from the Response Fund.
The $42.0 thousand dollar reduction eliminates the
toll-free hotline. There is a $24.2 thousand dollar
reduction in STAF, and a $17.8 thousand dollar
reduction in the Response Fund.
There is a $4.1 thousand dollar Response Fund reduction
in Impact Analysis. The Department of Environmental
Conservation is looking into the impact of receiving
state delegation (primacy) of the Underground Storage
Tank program. This reduction leaves $20.9 thousand
dollars of federal funds for the project.
There is a $110.8 thousand dollar reduction in STAF.
This eliminates funding for the Board. The Legislative
Budget and Audit Committee has proposed legislation
that would sunset the Board in 1994. House Bill 110
could be amended to sunset the Board immediately, and
allow LUST appeals to be handled by the Commissioner's
office. The Department does not object to this
proposal.
There is a $2,000.0 million dollar reduction in STAF
for Grants. This will leave $4,000.0 million dollars
for grants. Since the federal deadline for compliance
has been pushed back to 1998, there is not the
immediate need to continue funding at the $6,000.0
million dollar level. Administratively, the Department
cannot process any more than $6,000.0 million dollars
in grants per year.
Industry Preparedness
There is a $7.8 thousand dollar Response Fund reduction
in Legal Services. Internal efficiencies are reducing
legal costs.
There is a $6.5 thousand dollar Response Fund reduction
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in Environmental Crimes. The Department believes small
reductions in Environmental Crimes are manageable.
There is a $5.0 thousand dollar Response Fund reduction
in State and Regional Planning and Training.
There is a $1.0 thousand dollar Response Fund reduction
in Laboratory, Sampling and Analysis. Preliminary
investigation and assessment costs may be charged to
projects or the Spill Reserve. Delays in sampling
through the Department of Environmental Conservation
lab may occur.
There is a $186.0 thousand dollar Response Fund
reduction in structural integrity. The Subcommittee
recommended owners and operators fund regular
inspections by contractors. The Subcommittee proposes
that the Department of Natural Resources be required to
include inspections in their leases. The Subcommittee
requests that the Department of Natural Resources
notify the Department of Environmental Conservation of
potential problem areas. Normal inspections under the
Industry Preparedness Program should reduce any safety
threat.
There is a $11.6 thousand dollar Response Fund
reduction in travel. The Department believes the
reductions in travel are manageable.
Government Preparedness
There is a $5.9 thousand dollar Response Fund reduction
in Legal Services.
There is a $3.8 thousand dollar Response Fund reduction
in Environmental Crimes.
There is a $5.5 thousand dollar Response Fund reduction
in State and Regional Planning and Training.
There is a $51.0 thousand dollar Response Fund
reduction in Hazards Analysis. This leaves $41.5 for
identifying hazards in areas without Local
Environmental Planning Commissions (LEPC). Information
regarding hazards identified by LEPC's would not be
able to be consolidated by the Department of
Environmental Conservation.
There is a $7.0 thousand dollar Response Fund reduction
for Lab Sampling and Analysis.
There is a $13.5 thousand dollar Response Fund
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reduction in the Remote Sensing Workshop. Technical
review and evaluation could be continued through the
University of Alaska.
There is a $500.0 thousand dollar Response Fund
reduction in the Near Shore Demonstration Project.
There is a $800.0 thousand dollar proposal in the
Department of Military and Veterans Affairs' budget to
provide Depots and Corps.
There is a $60.3 thousand dollar Response Fund
reduction for the Spill Technology Review Council.
This eliminates staff support and associated costs for
the Review Council. This will eliminate maintenance of
technology databases and consistent representation on
the American Society for Testing and Materials
coordination.
There is a $1,200.0 million dollar reduction in
Response funds. This eliminates all funding for the
LEPCs. The State is not under legal requirement to
fund the LEPCs.
Representative Therriault asserted that LEPCs have not
coordinated their efforts with local governments. He
pointed out that the Department recommended appropriations
be reduced to $600.0 thousand dollars. He stated that he
received information that the LEPCs could sustain a fifty
percent reduction.
(Tape Change, HFC 93-48, Side 2)
There is a $36.6 thousand dollar reduction in travel.
International Spill Prevention and Response
There is a $117.0 thousand dollar reduction in
International Spill Prevention and Response. The
appropriation was to provide funding for the
Department's participation in fostering cooperative
international efforts addressing spill prevention and
response. There may be a federal grant to fund this
component.
Environmental Health
28. Environmental Health Director:
There is a $5.0 thousand dollar general fund reduction
for the Freshman contract (DC Lobbyist).
There is a $2.1 thousand dollar general fund reduction
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to Library Services. This is a department wide
library.
29. Animal Health and Dairy Industry:
There is a $1.6 thousand dollar general fund reduction
for Library Support Services.
10
31. Seafood Industry
There is a $16.0 thousand dollar general fund
reduction. This necessitates a lower level of
technical assistance to industry. This reduction
leaves $1,702.7 million dollars in the Seafood
component. This is still an increase over FY 93
authorized, which was $1,681.2 million dollars. There
is a supplemental request of $351.2 thousand dollars.)
32. Sanitation
There is a $15.7 thousand dollar general fund
reduction. This reduces technical assistance and
inspections.
The $53.9 thousand dollar reduction eliminates the
general fund increment, from Hazardous Waste to Alaska
Food Product Inspections.
The total reduction to Sanitation is $69.6 thousand
dollars. This leaves $1,502.5 million dollars in the
Sanitation component. This represents a reduction of
$260.6 thousand dollars from FY 93 Authorized. There
was a $244.9 thousand dollar reduction of excess
program receipt authority. This is an increase over FY
92 Actual of $62.3 thousand dollars.
33. Palmer Lab
There is a $8.0 thousand dollar general fund reduction
for lab supplies.
There is a $100.0 thousand dollar increment reduction
from Hazardous Waste for paralytic shellfish poison
(PSP) and domoic acid testing. The Subcommittee
believed that a $200.0 thousand dollar increment was
sufficient.
Reductions leave $1,043.9 million dollars for the
Palmer Lab. The FY 93 authorized was $909.2 thousand
dollars, with a supplemental request of $109.9 thousand
dollars. The proposed reductions would still leave the
lab with an increase of $24.8 over FY 93 with the
supplemental amount. Governor request for FY 94 was
$1,151.9 million dollars.
Facilities Construction and Operations
There is a $26.0 thousand dollar reduction in
contractual audits. This contract was not issued in FY
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93. The Department offered this reduction in their 5
percent scenario.
There is a $10.0 thousand dollar reduction in Research
and Development Seminar. The University of Alaska will
have to pick up entire cost of the seminar.
There is a $15.0 thousand dollar misc. contractual
reduction. (5.0 thousand dollar reduced for DC lobbyist
contract)
There is a $35.9 thousand dollar reduction which
deletes the graduate intern position. This is a
seasonal position.
Representative Martin expressed concern that the Legislature
has an obligation to capitalize the 470 Fund at $50 million
dollars. He asked if the Fund will be capitalized or if it
will be continue to be spent on questionable projects.
Representative Therriault replied that it will be difficult
to stop expenditures from the 470 Fund without a change in
statutes. He observed that industry understood that there
would be a portion of the 470 Fund spent yearly on the
Department of Environmental Conservation's operational
budget.
Representative Martin asked the status of the interest
generated by the 470 Fund.
JOHN A. SANDOR, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION clarified that the interest is deposited in the
General Fund.
Co-Chair MacLean asked for a list of contaminated sites in
Alaska and applications for Storage Tank Assistance Grants.
Representative Grussendorf expressed concern with reductions
to rural maintenance workers. He felt that emergency
situations would result if rural maintenance workers are not
sufficiently funded. Representative Therriault clarified
that the Department recommended a $13.9 thousand dollar
reduction under the Subcommittee's 1 - 5 percent reduction
scenario. He explained that the Subcommittee wanted to know
if areas of the State could be removed from the program.
The Subcommittee did not reduce this component.
Representative Brown observed that the Department of
Environmental Conservation's budget is being reduced by 7
percent. She noted that in some cases program receipts
which will be used to offset reductions are dependent on
adoption of regulations. She emphasized that the
Subcommittee further reduced funding for the Department
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through reductions in the Response Fund and the Storage Tank
Fund. She asserted that over all reductions will have a
"very detrimental effect" on the Department. She referred
to the Seafood Inspection Program which will be reduced by
$153.9 thousand dollars. She maintained that the whole live
crab industry is being jeopardized. She noted that the
Environmental Protection Agency (EPA) has indicated that
there will be problems with the reductions.
STEVEN A. TOROK, CHIEF, STATE OPERATIONS SECTION, UNITED
STATES ENVIRONMENTAL PROTECTION AGENCY provided members with
written testimony (Attachment 2). He stressed that
reductions to the Storage Tank program "will severely reduce
Department of Environmental Conservation's ability to obtain
EPA delegation of the Underground Storage Tank (UST)
program." He added that the Department of Environmental
Conservation's ability to maintain state control of Public
Drinking Water and Solid Waste programs will be indirectly
affected. He emphasized that reductions in the Hazardous
Waste program will "leave Alaska one of only four states
nationally not to have state authorization for the
management of hazardous waste." He observed that,
"reductions in the Industrial Waste Water program will
severely inhibit any meaningful consideration on the part of
the state for assuming the BPDES program in addition to
delaying federal action on individual permits."
JOHN Sandor, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION reviewed the subcommittee process and expressed
appreciation for the work of the Subcommittee (Attachment
3). He emphasized that the Department of Environmental
Conservation receives less than one percent of general fund
appropriations. He stressed that the State's primacy in
Drinking Water and Solid Waste will be jeopardized by the
Subcommittee's reduction. He observed that the EPA is not
able to manage problems on a state by state basis. He
referred to the Healy project. He stressed that the EPA
model would not have allowed the permit for the project to
be issued.
Commissioner Sandor noted that the public has expressed
dissatisfaction with user fees. He maintained that the
Department supports the user fees initiated in FY 93. He
asked the Committee to include intent language to emphasize
the purpose of the user fees and encourage local governments
to administer programs whenever possible. He assured
members that the Department of Environmental Conservation is
"implementing a partnership with federal government agencies
to bring safe water, sanitation and solid waste facilities
to all Alaskans." He pointed out that the United States
Coast Guard has issued notice to 75 -100 communities that
the discharge of fuels into substandard tanks will not be
13
permitted. He added that there are approximately 400 tanks
that need to be addressed at a cost of $150 - $200 million
dollars. This does not include clean up of sites.
Commissioner Sandor informed members that the Department is
asking the federal government to match state funding for
water/sanitation. He addressed the Remote Maintenance
program. He clarified that the Department did not recommend
a reduction to the program. He stated that the Department
has requested an additional position. He noted that the
Department indicated that the federal government should
provide the position and 4 to 5 more positions to aid the
Remote Maintenance program.
Commissioner Sandor provided members with back-up
information regarding the impact of the House proposed FY 94
budget reductions for the Department of Environmental
Conservation (Attachment 4).
Representative Navarre asked the State's liability in not
cleaning contaminated sites. He expressed concern with
reductions for contaminated site cleanup. He emphasized
that the issue is basic public protection. He did not feel
that funding from the 470 Fund should be limited. He argued
that the intent was not to build a Fund of $50 million
dollars. He stressed that there was an intent to capitalize
the Oil and Hazardous Response Fund. He maintained that a
reduction of the Contaminated Site program does an injustice
to residents of the State of Alaska.
Commissioner Sandor added that the ultimate liability is the
damage to the environment and spread of the contamination.
He noted that the balance in the 470 Fund was:
1991 - $6 million dollars
1992 - $12 million dollars
1993 - $24 million dollars
Representative Hoffman spoke in support of an increase in
the Remote Maintenance Workers program. He observed that
there is $1.2 -$1.4 billion dollars of work to be performed
in rural Alaska to bring water and sewer facilities up to
date. He asked how the Department will address the fuel
storage tank problem.
Commissioner Sandor stressed that the Alaska Energy
Authority, the Department of Environmental Conservation and
the Department of Community and Regional Affairs will work
with the Coast Guard for short and long term solutions. He
noted that bladders may be used in existing tanks. He
relayed that the one year moratorium will be extended.
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Representative Hoffman noted that the Legislature approved
$5 million dollars for below ground storage tanks in urban
areas and $2 million dollars for above ground storage tanks
in rural areas. He emphasized the need to address the
problems of fuel storage tanks. He observed that additional
spillage will be more costly.
Representative Martin asked if there is a procedure that
state agencies must follow to determine if purchased land is
contaminated. Commissioner Sandor observed that finanacial
institutions require that property be inspected prior to
conveyance. Hidden contamination remains the responsibility
of the seller. He noted that the Department has agreements
with other agencies to inspect possible land conveyances for
contaminated sites.
Representative Grussendorf referred to the reductions for
PSP/domoic acid testing in the crab industry. Commissioner
Sandor clarified that the Department did not recommend a
reduction in this component. Representative Grussendorf
felt that the crab industry would be in jeopardy by the
reduction.
Representative Therriault clarified that the Department did
propose a small reduction in the Remote Worker component as
part of the 1 - 5 percent reduction scenario. He added that
the Subcommittee deleted the general fund match from the
Storage Tank Assistance component. The Department was given
the discretion to offset additional program receipts in
Industrial Waste Water or in the Solid Waste component. The
Department elected to put the funds into Solid Waste. The
only reduction to the Solid Waste component is $80.0 for
dump days and $10.1 for travel and equipment. He noted that
the Subcommittee approved $200.0 of a $300.0 request for
PSP.
(Tape Change, HFC 93-49, Side 1)
Representative Therriault MOVED to INCORPORATE the House
Finance Subcommittee's recommendations for the Department of
Environmental Conservation. Representative Brown OBJECTED.
Representative Brown stressed that reductions to the
Department of Environmental Conservation's budget will
dramatically impact industry, economic development, rural
health and sanitation. She emphasized that the State's
ability to control regulatory programs and resources are in
question. She suggested that the Subcommittee reprioritize
reductions with a reasonable cap in line with reductions
made to other departments.
Co-Chair Larson stated that deliberations by the full
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committee will not be restricted to caps. He noted that,
"you don't know if its fat or bone until you try to seek it
out." He stressed that, "if we have dug too deep into the
bone, I'm sure we can correct it."
A roll call vote was taken on the motion.
IN FAVOR: Foster, Grussendorf, Hanley, Hoffman, Parnell,
Therriault, Larson, MacLean.
OPPOSED: Brown, Navarre
The MOTION PASSED (9-2).
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES
The House Transportation Budget Subcommittee was composed of
Chair Foster with members Representatives Sanders, Williams,
Phillips, Mulder, Menard, Mackie and Navarre.
Representative Foster observed that the target amount given
to the subcommittee was $1.921 million dollars below the
governor's proposed FY 94 Budget. He stressed that
committee members were concerned that maintenance on roads
and airports not be reduced. He pointed out that since 1986
the Department of Transportation and Public Facilities has
been reduced by 501 persons. The administrative components
have been reduced by 278 persons. Of those 118 were range
18 or above, Managerial, and 160 were blue collar positions.
There has been a reduction of 142 construction
administration positions, 5 A/P safety officers, 5
miscellaneous positions and 71 maintenance positions. Of
the maintenance positions lost, 24 reflect the cuts that
were made in the FY 93 Budget.
Representative Foster stressed that the Department has been
reduced 24 percent in the Highways and Aviation Component
during the last ten years after adjustments have been made
for inflation and funding changes. During that time, the
scope of its responsibility has increased because of
increased facilities, improved roadways, and improved
airports all of which take more maintenance.
Representative Foster noted that this year, for the first
time in at least five years, the increased cost of new
facilities was not considered before the governor's proposed
budget was developed. Those new facilities represent an
added cost to the Department's maintenance and operations
budget which is general fund monies. The estimated cost of
maintaining those facilities is $1,179,600. This is in fact
an additional 1.1 million reduction to the Department's
budget that has not been recognized elsewhere.
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Representative Foster stressed that the Alaska Marine
Highway has developed a financial plan that is working.
Over the past three years revenues have increased from $36
million to $43 million per year. The General Fund
contribution in 1990 was $32 million; $30.8 million dollars
in 1992, $30.0 million dollars in 1993 and the Governor
proposes $29 million dollars in FY 94. The system could
operate the their proposed schedule with $29 million dollars
in general funds and $43 million dollars in revenues. He
stated that there may be service reductions to Southeast and
Southwest Alaska.
Representative Foster pointed out that over the past two
years the Alaska Marine Highway System has absorbed pay
increases and fuel increases as well as other inflation
costs.
Representative Foster referred to page 5 of the Component
Summary - Operating Budget. He noted that general fund
reductions total $1,922.8 million dollars; plus a $1,275
million dollar reduction from other funding sources. He
added that of the $1,275 million dollars, $1,100 million
dollars in funds can be recaptured from federal highway and
airport funds by the Indirect Cost Allocation Plan (ICAP).
He observed that if these funds are not recaptured $1,100
million dollars or some portion of it will become an
unallocated cut to the portions of the budget affected.
He asserted that while these fund transfers will reduce the
amount of money available for capital construction, it will
better reflect the true cost of construction by moving those
costs to the capital budget where they properly belong.
Representative Foster stressed that the remaining $175
thousand dollars are a fund transfer from the Marine Highway
Fund to cover the cost of Administrative Services provided
to the Marine Highway System. This transfer is in keeping
with the fund transfer that is currently made from the
international Airports to Administrative Services.
Representative Foster noted that the subcommittee
unanimously approved the recommendations.
Representative Foster MOVED to INCORPORATE the House Finance
Subcommittee's recommendations for the Department of
Transportation and Public Facilities into HB 55.
Representative Brown stated that the real savings in the
Department of Transportation and Public Facilities' budget
is approximately $500.0 thousand dollars. She asserted that
the majority of savings are transferred to the capital
budget. She noted that other subcommittees were instructed
not to make such transfers. She reiterated that the
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Department of Environmental Conservation's budget was not
treated as other departments.
Co-Chair Larson reiterated the motion to INCORPORATE the
House Finance Subcommittee's recommendation for the
Department of Transportation and Public Facilities into HB
55. There being NO OBJECTION, it was so ordered.
Representative Foster noted that the committee as a whole
has no recommended legislation to offer. He suggested that
limited gaming, similar to that which occurs on the British
Columbia Ferry System, again be considered. This was
introduced in the Sixteenth Legislature as SB 146. Revenue
from gaming could become part of the Marine Highway Fund and
be used to supplement revenue in the fund.
FRANK TURPIN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES added that the indirect cost allocation is
common to departments that have a cross over between capital
and operating budget. He observed that $200.0 thousand
dollars additional revenues will be cut from the Marine
Highway budget. He pointed out that some ships may be laid
up a week or two longer before they are returned from winter
service.
Representative Martin asked if "ghost" positions exist in
the Department of Transportation and Public Facilities's
budget. Commissioner Turpin assured him that there are no
"ghost positions" in the department's operating budget.
Representative Grussendorf noted that the Governor reduced
the Alaska Marine Highway's budget by $1,000 million dollars
prior to the additional $200.0 thousand dollar reduction.
He expressed his concern that program receipts will not be
sufficient to counter reductions. Commissioner Turpin
stated that the Department can handle the reductions without
a loss in program receipts.
Representative Hoffman asked the anticipated program
receipts for FY 94. Commissioner Turpin stated that program
receipts are estimated at $43 million dollars.
ADJOURNMENT
The meeting adjourned at 3:39 p.m.
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