Legislature(1995 - 1996)
01/23/1995 01:35 PM House FIN
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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
JANUARY 23, 1995
1:35 P.M.
TAPE HFC 95 - 2, Side 2, #000 - end.
TAPE HFC 95 - 1, Side 1, #000 - end.
TAPE HFC 95 - 2, Side 2, #000 - end.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 1:35 P.M.
PRESENT
Co-Chair Hanley Representative Kohring
Co-Chair Foster Representative Martin
Representative Mulder Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Kelly
ALSO PRESENT
Mark Boyer, Commissioner, Department of Administration;
Sharon Barton, Director, Division of Administrative
Services; Margaret Pugh, Commissioner, Department of
Corrections; Bob Cole, Director, Division of Administrative
Services; Jerry Covey, Commissioner, Department of
Education; Karen Rehfeld, Director, Division of
Administrative Services; Nancy Slagle, Director, Division of
Budget Review, Office of Management and Budget; Mike Greany,
Director, Legislative Finance Division; Representative Irene
Nicholia; Representative Ivan Ivan; Representative Con
Bunde; Senator Lydia Green; Representative John Davies;
Annalee McConnell, Director, Office of Management and
Budget; Duane Guiley, Director, School Finance, Department
of Education; Joe McCormick, Director, Postsecondary
Education Commission, Department of Education;
Representative Rokeberg; Jack Fargnoli, Policy Analyst,
Office of Management and Budget; Jack Kreinheder, Policy
Analyst, Office of Management and Budget; Brad Pierce,
Policy Analyst, Office of Management and Budget.
SUMMARY
AGENCY OVERVIEWS:
Office of Management and Budget
Department of Administration
Department of Corrections
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Department of Education
(*Copies of log notes, meeting tapes and handouts are on
file with the Legislative Finance Division. Contact #465-
3795).
Log # DISCUSSION
OFFICE OF BUDGET AND MANAGEMENT
Committee meeting to order at 1:35 P.M.
MANAGEMENT AND BUDGET, introduced
herself and provided the Committee with
a brief overview of her experience. Ms.
McConnell introduced staff who would be
working with her through the Office of
Management and Budget.
BUDGET REVIEW, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR,
introduced the budget analysts and
explained their agency assignments.
with a handout which explained the
preliminary draft of the fiscal model
being developed by Office of Management
and Budget (OMB). [Copy on file -
Attachment #1].
reflect decisions made by the Knowles
Administration. The Department would
illustrate the potential fiscal gap in
the absence of budget or revenue
adjustments, and the fiscal effects of
relying on reserve funds to balance the
budget.
deadline for the FY96 budget was
February 14, 1995.
approved last spring plus the estimated
supplementals totaling approximately $80
million dollars. The proposed FY96
operating budget is the Hickel proposed.
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That projection would be updated when
the Knowles Administration amendments
are presented.
budget proposed by the Hickel
administration had included an inflation
percentage and would it be carried
forward into Governor Knowles proposed
budget. Ms. McConnell responded that
the inflation rate would be determined
by the Department of Revenue. She added
that Attachment #1 established a $3.85
inflation rate.
information regarding the proposed FY95
supplementals. Discussion followed
regarding the Executive Budget Act.
Management and Budget was completed.
DEPARTMENT OF ADMINISTRATION
ADMINISTRATION, provided the Committee
with a handout explaining the functional
organization of that Department. [Copy
on file - Attachment #2].
The FY96 major issues facing the
Department of Administration are labor
contract negotiations, citizen's foster
care review sunset, state cash flow,
statewide telecommunications network, 40
hour workweek, Kenai microwave,
participant directed supplemental
benefits system, public employee's
retirement system (PERS), labor
relations staffing level and the RATNet
funding.
organized work force of 20,000
employees.
Department of Administration (DOA) would
support the labor agreements from the
previous Administration and the Early
Retirement Incentive (RIP) program.
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would support the labor agreements. He
added that Governor Knowles would review
the past RIP program to determine if
future consideration would be profitable
to the State.
HFC 3 - I Commissioner Boyer added that a
profitable RIP #000 program would need to be
appropriately managed.
Representative Mulder
advised that such a
program would work if
jobs were eliminated.
was the plan of DOA to implement the 40
hour work week. Commissioner Boyer
advised that the cost would exceed $6
million dollars although the concept was
being reviewed by the Administration.
members regarding labor contracts.
with a copy of the Departmental
Subcommittee Chair assignments. [Copy
on file - Attachment #3].
of Administration was completed.
DEPARTMENT OF CORRECTIONS
OF CORRECTIONS, distributed a handout
providing fiscal facts from the
Department of Corrections. [Copy on
file - Attachment #4]. She added that
current problems in the Department are
occurring nationwide as incarceration
rates and crime rates have soared.
Department has temporarily bought time
with the out-of-state transfers.
decision for out-of-state transfers
would be a temporary or long term
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remedy. Representative Mulder asked the
intent for Operation Hope (Pt.
McKenzie).
of beds at Pt. McKenzie would provide a
stop-gap measure for current
overcrowding.
out-of-state prisoners included coverage
for the operation and debt service.
Commissioner Pugh pointed out that cost
for the out-of-state prisoners would not
include large medical costs. Discussion
followed.
prisoners with major medical problems
have been screened out of the transfer
program.
thousand dollar supplemental proposed by
Governor Hickel for the Department.
Commissioner Pugh stated that the
authorization to spend those funds for
community residential cites had been
approved.
BUDGET REVIEW, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, provided
information regarding past year funding
allocations determined by the Hickel
Administration.
classification policies would be
changed. Commissioner Pugh replied they
would be reviewed and adjusted by the
Department. Representative Parnell
recommended that classification be
liberalized to make adjustments for
overcrowding.
HFC 3 - II Commissioner Pugh responded to Committee
emergency capacity of state prisons.
concern with the aging prison population
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and the costs associated with them.
the FY96 agency overview.
DEPARTMENT OF EDUCATION
EDUCATION, distributed the overview for
the Department of Education (DOE).
[Copy on file - Attachment #5]. He
discussed the significant issues of the
Department.
school districts; funding for school
construction and maintenance projects;
potential liability to pollution at REAA
school sites; development and
implementation of student performance
standards and assessment to coincide
with national Goals 2000 school reform
initiative; non-public pupil
transportation; access to education
through technology; Alaska Youth: School
to work transition; and the "Healthy
Start" for all children entering school.
Committee with information regarding the
non-pupil transportation costs. [Copy
on file - Attachment #6].
to the State for non-pupil
transportation and private versus public
school controversy.
DEPARTMENT OF EDUCATION, spoke to the
reauthorization of the Federal Education
Act, established in federal statute,
October, 1994. Commissioner Covey noted
that reauthorization intent would be to
force states to discontinue federal
funding by narrowing the funding gap.
EDUCATION COMMISSION, DEPARTMENT OF
EDUCATION, explained that the Post
Secondary Division was responsible for
the Alaska Student Loan Program and
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Alaska Post Secondary Program. Both of
the programs are funded through
appropriated receipts.
long term loan program and pointed out
that it is currently suffering from the
past "forgiveness" clause which was
eliminated in 1986.
other states have addressed the problem.
Mr. McCormick replied that most other
states provide student loan funding
through the federal government.
members regarding the liability of the
student loan program.
testimony on the FY96 Agency Overview.
Finance Committee at 3:45 P.M.
ADJOURNMENT
The meeting adjourned at 3:45 P.M.
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