Legislature(1999 - 2000)
04/07/1999 01:50 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
April 7, 1999
1:50 P.M.
TAPE HFC 99 - 64, Side 1.
TAPE HFC 99 - 64, Side 2.
TAPE HFC 99 - 65, Side 1.
TAPE HFC 99 - 65, Side 2.
TAPE HFC 99 - 66, Side 1.
TAPE HFC 99 - 66, Side 2.
CALL TO ORDER
Co-Chair Mulder called the House Finance Committee meeting
to order at 1:40 P.M.
PRESENT
Co-Chair Mulder Representative Foster
Co-Chair Therriault Representative Grussendorf
Vice Chair Bunde Representative Kohring
Representative Austerman Representative Moses
Representative J. Davies Representative Williams
Representative G. Davis
ALSO PRESENT
Representative Ethan Berkowitz; Representative Sharon
Cissna; Representative Allen Kemplen; Representative Tom
Brice; Denny De Witt, Staff, Representative Eldon Mulder;
David Teal, Director, Division of Legislative Finance; Karen
Perdue, Commissioner, Department of Health and Social
Services; Janet Clarke, Director, Division of Administrative
Services, Department of Health and Social Services; Ginger
Blaisdell, Fiscal Analysts, Legislative Finance Division;
Sharon Barton, Director, Division of Administrative
Services, Department of Administration; Tom Lawson,
Director, Division of Administrative Services, Department of
Commerce and Economic Development; Nico Bus, Administrative
Services Manager, Division of Support Services, Department
of Natural Resources; Ken Taylor, Director, Division of
Habitat, Department of Natural Resources; Dan Spencer, Chief
Budget Analyst, Office of Management and Budget, Office of
the Governor; Larry Persily, Special Assistant, Office of
the Commissioner, Department of Revenue; Peter Bushre, Chief
Financial Officer, Permanent Fund Corporation, Department of
Revenue; Jim Kelly, Director of Communications, Permanent
Fund Corporation, Department of Revenue; Annalee McConnell,
Director, Office of Management and Budget, Office of the
Governor.
SUMMARY
HB 50 An Act making appropriations for the operating and
loan program expenses of state government, for
certain programs, and to capitalize funds; making
appropriations under art. IX, sec. 17©,
Constitution of the State of Alaska, from the
constitutional budget reserve fund; and providing
for an effective date.
HB 50 was heard and HELD in Committee for further
consideration. Amendments for the following
budgets were considered:
Department of Health and Social Services
Military and Veterans Affairs
Department of Fish and Game
Department of Revenue
Department of Education
Department of Administration
HB 51 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.
HB 51 was heard and HELD in Committee for further
consideration.
HOUSE BILL NO. 50
"An Act making appropriations for the operating and
loan program expenses of state government, for certain
programs, and to capitalize funds; making
appropriations under art. IX, sec. 17©, Constitution of
the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date."
HOUSE BILL NO. 51
"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."
Co-Chair Therriault MOVED to adopt work draft 1-GH1020\G,
Utermohle, 4/5/99, committee substitute for HB 50 and work
draft 1-GH1021\D, Utermohle, 4/5/99, committee substitute
for HB 51, as the working documents before the Committee.
Representative J. Davies OBJECTED for the purpose of
discussion. He inquired if the work draft would fund
municipal assistance and revenue sharing. Co-Chair Mulder
replied that the only deviation from the subcommittee
recommendations to the draft committee substitute was the
exclusion of revenue sharing and municipal assistance.
Representative J. Davies objected to that deletion and
requested that more discussion be heard regarding that
concern. He then proceeded to WITHDRAW his OBJECTION to
adoption of the work drafts.
There being NO further OBJECTION, those versions of the bill
were adopted as the working document.
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
Co-Chair Therriault MOVED to adopt HSS #1. (Copy on File).
The amendment would add $135.0 MHTAAR funds and $123.8
federal funds to the foster care special need component, add
$200.0 MHTAAR funds and $50.0 federal funds to the
subsidized adoptions and guardianship component and would
add $100.0 MHTAAR funds to the residential child care
component. Representative J. Davies OBJECTED for the
purpose of to place on record his concern with the source of
funds being used.
Co-Chair Therriault explained that he had negotiated with
Mental Health Trust representatives. They were willing to
replace general fund cuts with Mental Health Trust funds in
these three areas. Representative J. Davies WITHDREW his
OBJECTION. There being NO further OBJECTION, Amendment #1
was adopted.
Co-Chair Therriault MOVED to adopt HSS #2. [Copy on File].
Representative J. Davies requested a description of the
amendment.
Co-Chair Therriault commented that amendment #2 was a zero
general fund amendment that would supplant $390.4 thousand
general fund dollars in the Project Succeed program and
replace them with $390.4 thousand in MHTA funds. That would
allow for $390.4 thousand dollars to be used to fund an
increment for Village Based Mental Health and Substance
Abuse Services.
There being NO OBJECTION, HSS #2 was adopted.
Co-Chair Therriault WITHDREW amendment HSS #3. [Copy on
File]. There being NO OBJECTION, it was withdrawn.
Representative J. Davies questioned if Committee members
were discussing additional copies of pending committee
substitutes.
DENNY DEWITT, STAFF, REPRESENTATIVE ELDON MULDER, explained
that the committee substitute for HB 51 was a rerun. It
contained an error in the last two pages, which had not been
received when the first copy was made. Inadvertently,
copies from that were made for the public and staff. The
correct work draft date should be dated 4/07/99.
Representative Grussendorf questioned which version had the
Committee just adopted.
Co-Chair Therriault MOVED to adopt the committee substitute
version dated 4/07/99, CS HB 51(FIN). Co-Chair Mulder noted
that HB 50 would be unaffected by the proposed change.
Co-Chair Therriault MOVED to adopt amendment HSS #4. [Copy
on File]. Representative J. Davies OBJECTED for purposes of
discussion.
Co-Chair Therriault commented that the proposed fund source
would delete $5,264.1 general fund receipts, inserting that
amount to the general fund match, Alaska Temporary
Assistance Program component; delete $225.2 general fund
program receipts, inserting that amount for tribal
assistance component; and delete $675.0 general fund program
receipts, inserting that amount for foster care base rate
component.
GINGER BLAISDELL, FISCAL ANALYST, LEGISLATIVE FINANCE
DIVISION, explained the changes proposed with the
implementation of the amendment. She acknowledged that the
relationship between Child Support Enforcement Division
(CSED) and the Alaska Temporary Assistance Program (ATAP)
was confusing. CSED in Department of Revenue collects
program receipts. Portions of those receipts are
transferred to ATAP as fiscal reimbursement for federal
contributions to temporary assistance for needy families,
which becomes a negative gain for CSED.
Ms. Blaisdell added that the amendment would leave the
general fund programs receipts for Department of Revenue for
CSED so that they could spend those receipts and met the
match requirement for the federal portion. The Department
of Health and Social Services would be directly funded with
a general fund match.
Representative J. Davies pointed out that the amendment does
not speak to CSED. He pointed out that the program receipts
which are being deleted are shown are program receipts in
the Department of Health and Social Services. Ms. Blaisdell
agreed, however, historically, it has been a direct general
fund program receipt funding.
There being NO continued OBJECTION to the amendment, HSS #4
was adopted.
Co-Chair Therriault MOVED to adopt HSS #5. [Copy on File].
Representative J. Davies OBJECTED for purposes of
clarification.
Co-Chair Therriault explained that the amendment would
delete $3 million federal receipt dollars and $2 million
general fund dollars from the Medicaid Services component
and insert $2 million general fund dollars to the University
of Alaska for unallocated reductions and additions.
Co-Chair Therriault noted that it appears that there will be
a lapse in the Medicaid expenditures this year. He stated
there is likelihood, given the current year's level of
funding, there will be a general fund lapse and thought that
the Department would have greater success in shifting
services over to the Indian Health Service funding. Co-
Chair Therriault agreed to work with the Department if
supplemental funding was needed resulting from
implementation of the amendment.
KAREN PERDUE, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, agreed that there will be an "upturn" at the
billing at the end of the year on facilities and providers.
No one knows if funds will remain. The projection for this
year budget is for 18 months, and reminded Committee members
that there is room for margin.
Commissioner Perdue appreciated that Co-Chair Therriault had
given his approval that the Department would not be expected
to go to the "Options" list if the funding was not
sufficient. Every year, there are expenses, which are not
budgeted. The Department tries very hard not to request
approval for legislative supplemental funding. The
Department does not want to make service or eligibility
reductions.
Commissioner Perdue acknowledged that the Department would
have more flexibility by combining these two appropriations.
She advised that the Chronic and Acute Medical Assistance
(CAMA) program had been $400 thousand dollars underfunded
and if the full Medicaid amount is not received, the
Department might have to reduce some CAMA services.
Representative Bunde reiterated that the reduction would not
cause a reduction in services. Commissioner Perdue
emphasized the need for the Legislature to work with the
Department to guarantee that balance.
Representative J. Davies questioned if a supplemental was
required, would the Department still be able to capture
federal receipts lost as a result of the amendment.
Commissioner Perdue replied that the Department would
continue to receive those funds, which are entitlement funds
from the federal government.
There being NO further OBJECTION, HSS #5 was adopted.
Co-Chair Therriault MOVED to adopt amendment HSS #6. [Copy
on File]. Representative J. Davies OBJECTED.
Co-Chair Therriault explained that the increase in federal
receipt authority to the Department of Health and Social
Services would utilize federal funds from the Child Care
Development Fund. The federal receipts would then be
transferred to the Department of Community and Regional
Affairs in order to replace general funds for the Day Care
Assistance Program and the Head Start Program, which would
create a net zero general fund increment.
The amendment would insert $4.2 million federal receipts
dollars. Child Care benefits component, delete $2.4 million
general fund dollars, insert $2.4 million I/A receipt
dollars for the Day Care Assistance program. Additionally,
it would delete $1.8 million general fund dollars and insert
$1.8 million I/A receipts dollars. Co-Chair Therriault
continued, the amendment would delete $70 thousand general
fund dollars from the Bureau of Vital Statistics component,
Department of Health and Social Services and would insert
$170 thousand general fund dollars into the Trade and
Development component, Department of Commerce and Economic
Development.
JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, responded to
Representative J. Davies question regarding the federal
receipts. She noted that the federal funding was welfare
dollars which the Department receives as a block grant.
They are available and the Department is allowed to use up
to a maximum of 30% in transfers to various areas. The
proposed amendment will max out the transfers allowed by the
Department. The funds are available now but the concern is
for FY2002, at which time Congress might reauthorize the
Welfare Reform Act. She emphasized that there could be a
shortfall at that time.
Representative J. Davies WITHDREW his OBJECTION. There
being NO further OBJECTION, HSS #6 was adopted.
Representative Bunde MOVED to adopt HSS #7. [Copy on File].
Representative J. Davies OBJECTED for the purpose of
discussion.
Co-Chair Therriault explained that the amendment would
delete $197.3 general fund dollars from Public Assistance
Administration; delete $326.4 general fund dollars from the
Medical Assistance Administration; delete $40 general fund
dollars from Family and Youth Services Management; delete
$372.6 general fund dollars from Public Health
Administrative Services; delete $164.2 thousand dollars from
the Mental Health/Developmental Disabilities Administration;
delete $24.0 general funds dollars from the Alaska Mental
Health Board component; delete $5.0 general fund dollars
from the Governor's Council on Disabilities and special
education component; delete $16.8 general fund dollars for
the Advisory Board on Alcoholism and Drug Abuse component
and add $1,146.3 general fund dollars to an Unallocated
Reduction component in the Department of Health and Social
Services.
Co-Chair Therriault commented that the amendment would
undertake distribution of the annualized "belt
tightening/austerity program" for an unallocated decrement
to administrative components within Department of Health and
Social Services.
Commissioner Perdue advised that the Department's priority
has been to focus on preserving formula programs. Each area
cut will have impact to the Department. Representative J.
Davies pointed out that would apply to both HB 50 and HB 51.
Representative J. Davies WITHDREW his OBJECTION. There
being NO further OBJECTIONS, amendment HSS #7 was adopted.
Co-Chair Therriault MOVED to adopt HSS #8. [Copy in File].
Representative J. Davies OBJECTED for the purpose of
discussion.
Co-Chair Therriault explained that the amendment would
delete $177.0 MHTAAR funds, Services for Seriously
Emotionally Disturbed Youth component within the Department
of Health and Social Services. The Alaska Mental Health
Trust Authority reduced the scope and approved the use of
Mental Health Trust Authority receipts for the increment
funding the Children's Care Coordination Pilot Project.
Representative J. Davies WITHDREW his OBJECTION. There
being NO further OBJECTION, amendment HSS #8 was adopted.
Representative J. Davies MOVED to adopt amendment HSS #9.
[Copy on File]. Co-Chair Therriault OBJECTED.
Representative J. Davies explained that the amendment would
add $489.9 thousand GF/MH dollars to the Alcohol and Drug
Abuse Grants Component. He pointed out that Alaska has the
highest fetal alcohol syndrome (FAS) rate in the nation. He
emphasized that FAS and FAE are preventable. Commissioner
Perdue agreed that both FAS and FAE are 100% preventable and
if intervention can happen early, these children can be
successful as adults.
Representative Bunde commented that currently, there are
programs available, which discourage pregnant women from
using alcohol. Commissioner Perdue acknowledged that there
are some programs in place, however, the State needs to
address the time before the pregnancy begins and then again
when the child is born.
A roll call vote was taken on the motion to adopt HSS #9.
IN FAVOR: Moses, J. Davies, Grussendorf
OPPOSED: Kohring, Williams, Austerman, Bunde, G.
Davis, Foster, Mulder, Therriault
The MOTION FAILED (3-8).
Representative J. Davies MOVED to adopt amendment HSS #10.
[Copy on File]. Co-Chair Therriault OBJECTED.
Representative J. Davies MOVED an amendment to HSS #10,
which would use only general funds in the amount of $850.0
thousand dollars for Substance Abuse Treatment for Women.
There being NO OBJECTION to the change to the amendment, it
was made.
Representative J. Davies spoke to the amended HSS #10. He
commented that the amendment would fund additional
residential care for women who are either pregnant or who
already have children and have an alcohol abuse problem.
The main intent would allow these women to maintain custody
of their children.
(Tape Change HFC 99 - 64, Side 2).
Commissioner Perdue pointed out that this intention is the
#1 recommendation of the Alcohol Board to the Mental Health
Trust.
Co-Chair Therriault noted that there had been a $706
thousand dollar funding increase over last year's budget
from federal funds received. He stated that it was his
intent to work with trustees of the Mental Health Board in
order to better respond to this need. Ms. Clarke responded
that federal funding was available without a match.
Commissioner Perdue noted that currently there is a waiting
list. Once a person makes the decision to have treatment,
the funding needs to be available immediately. It is proven
that women will not leave dangerous situations without their
children and that is why this treatment is so popular.
Ms. Clarke commented that the federal funding was received
as a competitive grant, which the State secured. General
funds were to be used to expand the program to Bethel and
some of the rural areas.
A roll call vote was taken on the motion.
IN FAVOR: Moses, J. Davies, Grussendorf
OPPOSED: Williams, Austerman, Bunde, G. Davis, Foster,
Kohring, Therriault, Mulder
The MOTION FAILED (3-8).
Representative J. Davies WITHDREW amendment HSS #11. [Copy
on File].
Representative J. Davies MOVED to adopt amendment HSS #12.
[Copy on File]. Co-Chair Therriault OBJECTED.
Representative J. Davies explained that the amendment would
add $868.9 thousand general fund dollars to the foster care
base rate caseload growth in the Department of Health and
Social Services.
Co-Chair Therriault commented that the Subcommittee had
allowed a 6% increase to that component. Representative J.
Davies replied that 6% was a conservative number, which
would only address the low-end expected caseload growth
rate.
A roll call vote was taken on the motion.
IN FAVOR: J. Davies, Grussendorf, Moses
OPPOSED: Williams, Austerman, Bunde, G. Davis, Foster,
Kohring, Mulder, Therriault
The MOTION FAILED (3-8).
Representative J. Davies MOVED to adopt amendment HSS #13.
[Copy on File]. Co-Chair Therriault OBJECTED.
Representative J. Davies explained that the amendment would
add $432.6 thousand general fund dollars for foster care
special needs case growth within the Department of Health
and Social Services.
Co-Chair Therriault pointed out that the Governor's
requested increment had been funded at 50%. He offered to
continue working with the Mental Health Trustees.
REPRESENTATIVE SHARON CISSNA spoke to concerns addressed in
amendment HSS #13 and the high turnover of foster care
parents. People loose much when taking care of special
needs foster children and without adequate funding, the
State will not be able to retain foster parents.
Representative Cissna emphasized the financial importance of
adequately funding foster care needs in the State.
Representative Bunde suggested that many people make the
choice to take on the added burdens associated with foster
care parenting. He stated that this could not be a profit
center for people.
Representative J. Davies argued that this would not create a
profit center. He stressed that the situation is for
"special needs" children who seriously need attention. He
stressed that these are "extra ordinary" burdens placed on
being foster parents. He reiterated that there is a high
turnover rate.
Co-Chair Mulder asked the number of special needs foster
children in the State. Commissioner Perdue discussed that
there are about 2,000 children in custody, some of who
receive, a special needs allowance.
A roll call vote was taken on the motion.
IN FAVOR: J. Davies, Grussendorf
OPPOSED: Austerman, Bunde, G. Davis, Foster, Kohring,
Williams, Therriault, Mulder
Representative Moses was not present for the vote.
The MOTION FAILED (2-8).
Representative J. Davies MOVED to adopt HSS #14. [Copy on
File]. Co-Chair Therriault OBJECTED.
Representative J. Davies explained that the amendment would
add $1.769 million general fund dollars and $387.1 thousand
federal dollars for front line social workers to the
Department of Health and Social Services. The money would
support an additional 28 social workers.
Commissioner Perdue stressed that there is not enough staff
to check on children in foster care homes. There was a
murder in foster care home in Anchorage last year. She
expressed her concern and advised that the State add
resources to this area.
A roll call vote was taken on the motion.
IN FAVOR: J. Davies, Grussendorf
OPPOSED: G. Davis, Foster, Kohring, Williams,
Austerman, Therriualt
Representative Bunde, Representative Moses and Co-Chair
Mulder were not present for the vote.
The MOTION FAILED (2-6).
Representative J. Davies MOVED to adopt amendment HSS #15.
[Copy on File]. Co-Chair Therriault OBJECTED.
Representative J. Davies explained that the amendment would
add $361 thousand general fund dollars to the community DD
grants for the Department of Health and Social Services.
Co-Chair Therriault commented that the Governor had
requested $965 thousand dollars and that the Subcommittee
recommended $604, a 3% increase. He advised that in the
past, the Mental Health Trust has funded the amount
requested.
Commissioner Perdue pointed out that wages for those people
that provide the care has not increased in many years.
Sometimes, the staff experiences up to 133% turnover rate.
This is the first request for a pay raise for those
employees caring for people with disabilities.
A roll call vote was taken on the motion.
IN FAVOR: J. Davies, Grussendorf, Moses
OPPOSED: G. Davis, Foster, Kohring, Austerman, Bunde,
Mulder, Therriault
The MOTION FAILED (3-8).
Representative J. Davies MOVED to adopt amendment HSS #16.
[Copy on File]. Co-Chair Therriault OBJECTED.
Representative J. Davies explained that the amendment would
add $3 million general fund dollars to the tobacco
prevention and control component.
Representative Bunde spoke in support of the amendment. He
inquired where the funds would originate. Representative J.
Davies reiterated that the State anticipates receiving $27
million dollars from the tobacco settlement.
Co-Chair Therriault advised that the Governor had counted
that money as a non-general fund source and that all of it
had been spent in the Department of Health and Social
Services budget.
REPRESENTATIVE ALLEN KEMPLEN testified that money spent on
public education is money spent on prevention. He stressed
that spending zero money on such an important issue would be
"short sighted" by the Legislature.
Representative Grussendorf reiterated his support of the
proposed use for the funds. Co-Chair Therriault interjected
that the State does not have the allocation resources to
begin new programs. Representative J. Davies reminded
Committee members that tobacco represents the single largest
preventative cause of death in the United States. It kills
one Alaskan per day. He strongly urged the State to
appropriate $3 million dollars to this war.
Commissioner Perdue agreed that none of those funds had gone
into tobacco control programs. She acknowledged that
currently there exists a $695 million dollar settlement over
the next twenty-five years. She stated that the Governor is
committed to helping this program and emphasized that
tobacco usage is a serious health problem. Commissioner
Perdue requested that some vehicle be used to get
information out to the schools and community organizations.
A roll call vote was taken on the motion.
IN FAVOR: Grussendorf, Moses, Bunde, J. Davies
OPPOSED: G. Davis, Foster, Kohring, Williams,
Austerman, Therriault, Mulder
The MOTION FAILED (4-7).
ALASKA COURT SYSTEM
Co-Chair Mulder pointed out that there were no amendments to
the Court System proposed budget.
(Tape Change, HFC 99 - 65, Side 1)
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
Representative J. Davies MOVED to ADOPT MVA #1 (copy on
file). Co-Chair Mulder OBJECTED. Amendment MVA #1 would
switch the fund source on an appropriation of $630.2
thousand dollars in Disaster Planning and Control from
interagency receipts to general funds. Representative J.
Davies noted that these activities have been previously
funded through the Disaster Relief Fund. The Disaster Relief
Fund's balance is currently zero.
NICO BUS, ADMINISTRATIVE SERVICES MANAGER, DIVISION OF
SUPPORT SERVICES, DEPARTMENT OF NATURAL RESOURCES explained
that the request would maintain the status quo. This
appropriation had been funded through the Disaster Relief
Fund or through a supplemental.
Co-Chair Mulder asked if the Administration offered an
amendment. Mr. Bus stated that the Administration was
considering an amendment, but did not offer one. Co-Chair
Mulder pointed out that the request is in excess to the
Governor's request.
Mr. Bus clarified that during the past several years the
Division of Emergency Services has been funded through
interagency receipts from the Disaster Relief Fund. This is
no longer an option.
Co-Chair Mulder spoke against the amendment. He stressed
the need to work in the framework of FY99. He acknowledged
that it would be a difficult task for the department, but
noted that there is $489 thousand general fund dollars, $1.5
million dollars in federal receipts and more than $500
thousand dollars in 470 funds remaining in the Disaster
Planning component.
Representative J. Davies pointed out that the request does
not bring the total beyond the FY99 level. The funding would
bring the amount to the FY99 level. Mr. Bus noted that
general funds were appropriated in FY99 to support this
function. Some of the federal funds are dependent on
matching state funds. He stated that there would be a loss
of approximately $1 million dollars due to the additional
loss of federal funds.
Co-Chair Mulder questioned if the $489 thousand dollar
general fund match would be sufficient to receive the
federal funds. Mr. Bus observed that that there are other
programs being matched with $400 thousand dollars of the
funds.
Co-Chair Mulder maintained his opposition. He stated that he
would work with the Administration.
Representative J. Davies observed that the Administration
thought that there would be funding through the Disaster
Relief Fund.
Representative J. Davies Withdrew Amendment 1.
DEPARTMENT OF FISH AND GAME
Vice-Chair Bunde MOVED to ADOPT Amendment FG-1 (copy on
file). Representative J. Davies OBJECTED for the purpose of
discussion. The amendment changes $269.6 thousand dollars
from federal funds to the Fish and Game Fund. Vice-Chair
Bunde explained that the amendment was at the request of the
department with the concurrence of the Division of the
Wildlife Conservation. The amendment would allow greater
flexibility.
Co-Chair Mulder stated that the department indicated that it
would be an appropriate use of the Fish and Game Fund.
There being NO OBJECTION, Amendment FG-1 was adopted.
Representative Grussendorf MOVED to ADOPT Amendment FG-2.
Representative Grussendorf explained that the amendment
would add $75 thousand permanent fund receipt dollars to the
Division of Habitat. He explained that the funding would
support oil development permitting. There are seven areas
that need permitting. The amendment uses a different funding
source to get fish and game permits in place so that there
are no delays.
Vice-Chair Bunde acknowledged that the increment was
deleted. He agreed that the money would be used for permits
in the National Petroleum Reserve-Alaska (NPRA). He stated
that the connection between the NPRA and permanent fund
might be tenuous. Representative Grussendorf noted that $42
million dollars in permanent fund receipts have been used in
the Department of Law, Department of Revenue and Department
of Natural Resources. He maintained that it is an
appropriate fund source.
Co-Chair Mulder argued against the amendment. He did not
support the funding source. Representative Kohring echoed
the previous remarks. He added that there needs to be
further budget reductions.
KEN TAYLOR, DIRECTOR, DIVISION OF HABITAT, DEPARTMENT OF
NATURAL RESOURCES explained that there are statutory
designated program receipts from some of the oil companies
on the North Slope. These funds are not used directly in the
permitting process.
In response to a question by Representative J. Davies, Mr.
Taylor stated that they anticipate that participation in
North Slope activities will increase. He anticipated that
NPRA and North Star would increase the workload.
A roll call vote was taken on the motion.
IN FAVOR: Grussendorf, Moses, Davies
OPPOSED: Foster, Kohring, Williams, Austerman, Bunde,
Mulder
Representatives Therriault and Davis were absent from the
vote.
The MOTION FAILED (3-6).
Representative Grussendorf MOVED to ADOPT Amendment FG-3
(copy on file). Vice-Chair Bunde OBJECTED. Representative
Grussendorf explained that the amendment would add the
funding:
Southeast Region Fisheries $68.9 general funds
Central Region Fisheries $83.0 general funds
AYK Region Fisheries $65.8 general funds
Westward Region Fisheries $90.4 general funds
Headquarters Fisheries $64.1 general funds
Fisheries Development $39.8 general funds
He noted that reductions in the Division of Commercial
Fisheries occurred in the herring fisheries.
Vice-Chair Bunde spoke against the amendment. He stressed
that the amendment would exceed the budgetary allocation.
A roll call vote was taken on the motion.
IN FAVOR: Grussendorf, Moses, Williams, Austerman, Davies
OPPOSED: Kohring, Bunde, Foster, Mulder
Representatives Therriault and Davis were absent from the
vote.
The MOTION PASSED (5-4).
Representative Kohring Moved to rescind the committee's
action in adopting Amendment FG-3. Representative J. Davies
OBJECTED.
Representative Grussendorf spoke in support of Amendment 3.
Co-Chair Mulder noted that the intent is to hold the
Division at the FY99 level in order to respond to budgetary
concerns.
A roll call vote was taken on the motion to rescind
Amendment FG-3.
IN FAVOR: Kohring, Bunde, Davis, Foster, Mulder, Therriault
OPPOSED: Davies, Grussendorf, Moses, Austerman, Williams
The MOTION PASSED (6-5).
Amendment FG-3 was again before the committee. A roll call
vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses, Austerman, Williams
OPPOSED: Kohring, Bunde, Davis, Foster, Mulder, Therriault
The MOTION FAILED (5-6).
DEPARTMENT OF REVENUE
Vice Chair Bunde MOVED to ADOPT Amendment Replacement REV-1:
(copy on file).
Child Support Enforcement
DELETE $2,331.0 1004 General Fund
INSERT $2,331.0 1005 General Fund / Program Receipts
DELETE Lines 15 and 16 Intent Language
Comment:
This fund change will correct an inadvertent fund code
classification from General Fund .to General Fund /
Program Receipts. There is no difference in the total
amount of general funds available to the Department of
Revenue.
Co-Chair Mulder noted that Amendment REV 1 would reclassify
general funds to general fund program receipts. There being
NO OBJECTION, Amendment REV 1A was adopted.
Vice-Chair Bunde MOVED to ADOPT Amendment REV-1B.
Insert on Page 37, following line 15
"The funds appropriated by this appropriation include
so much, and no more, of the program receipts received
during the fiscal year ending June 30, 2000, by the
child support enforcement division as is necessary to
provide the minimum match of state funds necessary to
secure federal funding appropriated for the child
support enforcement program in this section."
GINGER BLAISDELL, FISCAL ANALYST, LEGISLATIVE FINANCE
DIVISION explained that legislative legal counsel
recommended that Amendment REV-1B be placed in the back
(appropriation) section. The amendment would allow the
department to utilize general fund program receipts to fill
in shortfalls of federal incentive payments for indirect
costs not received as cash.
DAN SPENCER, CHIEF BUDGET ANALYST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR explained that the intent is
to make sure that the Child Support Enforcement Division can
collect all of their federal receipts.
Co-Chair Therriault noted that general fund spending would
go up but that overall spending would not increase.
In response to a question by Representative J. Davies, Ms.
Blaisdell clarified that the match of state funds secures
federal funds.
Representative J. Davies MOVED to Amend the Amendment by
changing "match" to "amount". There being NO OBJECTION, it
was so ordered.
There being NO OBJECTION, Amendment REV-1B was adopted as
amended.
Vice Chair Bunde MOVED to ADOPT Amendment REV-2 as amended
(by the sponsor) to $233.4 thousand dollars. The amendment
would change $233.4 thousand dollars in the Division of Oil
and Gas Audit from general funds to permanent fund corporate
receipts.
LARRY PERSILY, SPECIAL ASSISTANT, DEPARTMENT OF REVENUE
explained that this is the amount needed to run the royalty
audit program.
Representative Kohring stated that he did not feel
comfortable with the use of permanent fund dollars.
A roll call vote was taken on the motion.
IN FAVOR: Williams, Bunde, Davies, Foster, Grussendorf,
Moses, Mulder, Therriault
OPPOSED: Kohring
Representatives Davis and Austerman were absent from the
vote.
The MOTION FAILED (1-8).
Representative Grussendorf MOVED to ADOPT Amendment REV-3.
Vice-Chair Bunde OBJECTED. Representative Grussendorf noted
that Amendment REV-3 would add $800 thousand dollars in
corporate receipts to the Permanent Fund Corporation. He
spoke in support of the amendment.
JIM KELLY, DIRECTOR OF COMMUNICATIONS, PERMANENT FUND
CORPORATION, DEPARTMENT OF REVENUE spoke in support of the
amendment. He maintained that a $800 thousand dollar
reduction would impact the Corporation's ability to produce
profit.
(Tape Change, HFC 99 - 65, Side 2)
Vice-Chair Bunde was not convinced that a reduction in
office expenditures would result in less income to the fund.
He stressed that the Corporation has a large travel budget
despite high quality teleconference equipment. He stressed
that all aspects of state government are being requested to
tighten their belts. He acknowledged that it is not general
funds, but stressed that the people's money is being spent.
Co-Chair Mulder asked how many people are working for the
Corporation.
PETER BUSHRE, CHIEF FINANCIAL OFFICER, PERMANENT FUND
CORPORATION, DEPARTMENT OF REVENUE replied that 31 persons
work for the Corporation.
Co-Chair Mulder questioned how the reduction would be
absorbed. Mr. Bushre stated that the Corporation has
identified 29 ways that they could be more efficient. He
acknowledged that travel could be reduced through
videoconferences. He noted that their video conference
budget was reduced. He stressed that the 29 measures for
efficiencies would not add up to $800 thousand dollars. He
maintained that the reduction would result in lower income
on investments.
Co-Chair Therriault clarified that as the fund increases
their budget increases. Mr. Bushre observed that there are
added costs as the fund grows. He pointed out that addition
computer systems might be needed.
Co-Chair Therriault noted that their budget was reduced in
1998. Mr. Bushre explained that the reductions were a
result of consolidations.
Co-Chair Therriault Moved to Amend Amendment REV-3, delete
"$800" and insert "$500" thousand dollars. There being NO
OBJECTION, it was so ordered.
Co-Chair Mulder clarified that the net decrement is $300
thousand dollars. Mr. Bushre stated that the Corporation
could live with a reduction of $300 thousand dollars.
Representative Kohring OBJECTED to any use of the Permanent
Fund.
A roll call vote was taken on the motion.
IN FAVOR: Austerman, Bunde, J. Davies, Davis, Foster,
Grussendorf, Moses, Williams, Therriault, Mulder
OPPOSED: Kohring
The MOTION PASSED (10-1).
DEPARTMENT OF EDUCATION
Representative J. Davies MOVED to ADOPT Amendment ED-1 (copy
on file). Co-Chair Mulder OBJECTED. Representative J. Davies
explained that the amendment would add $100 thousand dollars
to the Community Schools Program.
Co-Chair Mulder stated that he supports the program, but
that the reduction was necessary.
Representative Grussendorf pointed out that there are
millions if not billions of dollars tied up in school
buildings. He stressed that the facilities are only used for
9 months but need to be maintained all year. He maintained
that the investment is well spent.
Co-Chair Therriault pointed out that the state has paid for
the majority of construction, maintenance, and utility
costs. He stressed that users can support their program in
the schools. He noted that K-12 education is being supported
at full level.
Representative J. Davies recommended that the request be
transferred to general fund program receipts. He noted that
the cost could be supported for a .10 to .50 cent fee.
Representative G. Davis maintained that users are willing to
pay for the use of the schools. He expressed support for the
program. Co-Chair Mulder noted that the state only pays a
fraction of its overall cost. Local school districts pay the
majority of the program.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: G. Davis, Foster, Kohring, Williams, Therriault,
Mulder
Representatives Kohring and Austerman were absent from the
vote.
The MOTION FAILED (3-6).
DEPARTMENT OF ADMINISTRATION
Representative G. Davis MOVED to ADOPT Amendment AD-A (copy
on file). Representative Grussendorf OBJECTED for the
purpose of discussion.
Delete:
Department of Administration
Public Communications
Satellite Infrastructure $444.0 GF
Delete:
Commerce and Economic Development
Executive Administration and Development
Trade and Development $200.0 GF
Japan and Korea Trade Offices
Department of Administration
Public Communication
Public Broadcasting -TV $644.0 GF
Explanation
This provides funding for government supported TV and
reduces insurance funding that has been determined
unnecessary in the satellite infrastructure.
It also puts the Korean trade office contract at $151.0
and the Japan trade office at a level of $400.0 (150.0
trade/250 tourism)
Representative G. Davis noted the concerns by testifiers
during the Committee's public hearings. The amendment would
transfer $444 thousand dollars from the satellite
infrastructure to the public broadcasting component.
Representative Grussendorf asked for more information.
SHARON BARTON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF ADMINISTRATION explained that
funding would utilize money that had been earmarked for
insurance coverage.
Co-Chair Mulder emphasized that the amendment recognizes the
priority of providing a state match to federal funding. He
noted that the resulting reduction would be $200 thousand
dollars. Ms. Barton clarified that there would be a $400
thousand dollar corresponding reduction of federal funds.
TOM LAWSON, DIRECTOR, DIVISION OF ADMINISTRATION, DEPARTMENT
OF COMMERCE AND ECONOMIC DEVELOPMENT clarified that there is
no pending reduction to the oversea office. The amendment
would represent a 40 percent reduction in the Korea office.
Staff would be reduced from three to one positions. It may
require a move to a smaller office. Market intelligence
would be reduced. The leasing cost of the Tokyo office is
$100 thousand dollars. That Tokyo office might need to be
closed.
Co-Chair Therriault stated that there was discussion on the
subcommittee level on how to coordinate the two offices.
In response to a question by Vice-Chair Bunde, Mr. Lawson
noted that contracts are up for renewal this fiscal year.
Mr. Lawson noted that the offices might need to be closed.
Co-Chair Therriault stated that it would be his intent to
maintain a $400 thousand dollar marketing effort through a
fiscal note in other legislation. Mr. Lawson noted the
difficulty of "marrying the money" between the tourism
international effort and the trade effort.
Representative J. Davies Moved to Amend Amendment AD-A by
increasing the deletion from the Trade and Development
component to $350 thousand dollars and adding an additional
$150 thousand dollars to the Public Broadcasting component
(total of $794 thousand dollars). He noted that the intent
is to capture an addition $300 thousand dollars in federal
funds.
Co-Chair Therriault noted that there is language in the
statutes requiring a Alaskan presence in Korea and Japan.
Representative J. Davies stated that if the budget is going
to be reduced that he would prefer that public broadcasting
in the state be supported before the oversees marketing
effort.
Vice-Chair Bunde agreed that the cuts should fall furthest
from "our front steps". Vice-Chair Bunde maintained that the
trade offices are not very productive and emphasized the
positive affect of public broadcasting.
Representative Grussendorf spoke in support of the
amendment. He noted that public broadcasting is federally
funded. He stressed that the University of Alaska uses the
service for outreach classes.
Representative Austerman emphasized that there needs to be a
prioritization of the budget. He spoke in support of the
amendment. He noted that public broadcasting reaches the
majority of Alaskans.
A roll call vote was taken on the motion to amend Amendment
AD-A.
IN FAVOR: J. Davies, Foster, Grussendorf, Moses, Austerman,
Bunde
OPPOSED: G. Davis, Kohring, Williams, Mulder, Therriault
The MOTION PASSED (6-5).
Representative G. Davis noted that the match could be
provided through contributions.
Vice Chair Bunde added that public support needs to grow.
(Tape Change, HFC 99 -66, Side 1)
Representative Kohring OBJECTED. He was not convinced that
public television is an essential service. He stated that if
it is the intent of the Legislature to delete the component
it should be done all at once.
A roll call vote was taken on the motion.
IN FAVOR: Austerman, Bunde, J. Davies, Davis, Foster,
Grussendorf, Moses, Williams, Therriault, Mulder
OPPOSED: Kohring
The MOTION PASSED (10-1).
Representative J. Davies MOVED to ADOPT Amendment AD-1 (copy
on file). Representative G. Davis OBJECTED. Amendment AD-1
would add $9 hundred dollars in general funds, $111.1 in
general fund program receipts and $563.9 thousand dollars in
interagency receipts for the Alaska Professional Development
Institute. Representative J. Davies explained that the
amendment would provide training and help the department be
more efficient and avoid mistakes. He emphasized that most
of the funding is interagency receipts.
Ms. Barton stressed that it is hard to imagine an agency
with 14,000 employees without a training arm. She stated
that being promoted into jobs that require them to obtain
additional training awards good performance by employees.
She stressed that it is an essential component of state
government. She maintained that the state would spend more
money without the component.
Representative G. Davis stated that the reduction would not
eliminate training. He pointed out that the reduction is in
interagency receipts. He stressed that the intent was to
look at components that could be taken off the table.
Representative Grussendorf stressed that the centralization
of training allows a standardized approach.
Representative J. Davies maintained that it is cost
effective to have centralized training. He maintained that
decentralization would result in greater costs.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Foster, Kohring, Williams, Austerman, G. Davis,
Mulder, Therriault
Representative Bunde was absent from the vote.
The MOTION FAILED (3-7).
Representative J. Davies MOVED to ADOPT Amendment AD-2 (copy
on file). Representative G. Davis OBJECTED. Amendment AD-2
would restore a reduction of $50 thousand general fund
dollars to the Alaska Public Offices Commission (APOC).
Representative J. Davies maintained that APOC could barely
keep up with the present workload. The reduction would
result in a staff loss of 10 to 15 percent.
Representative G. Davis spoke against the amendment. He
maintained that efficiencies could be accomplished.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses, Austerman
OPPOSED: Kohring, Williams, G. Davis, Foster, Therriault,
Mulder
Representative Bunde was absent from the vote.
The MOTION FAILED (4-6).
Representative Grussendorf MOVED to ADOPT Amendment AD-3
(copy on file). Co-Chair Mulder OBJECTED. Representative
Grussendorf explained that the amendment would restore a
$514 thousand dollar reduction in pioneer home receipts. He
stressed that the facilities operate 24-hours a day, every
day of the year.
Co-Chair Mulder spoke against the amendment. He pointed out
that general fund program receipts count the same as general
funds.
Representative Grussendorf stressed that the mission of the
pioneer homes has changed over the last 5-6 years. He noted
that the residents have aged and there is a greater need for
supervision and care.
Representative J. Davies observed that the receipts come
from the residents and their families. He emphasized that
the receipts are earmarked as a fee for services. He
questioned why it would not fit within the category of
statutory designated program receipts.
Co-Chair Mulder noted that the receipts do not fall into the
statutory designated program receipts category.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf
OPPOSED: Bunde, G. Davis, Foster, Kohring, Williams,
Austerman, Therriault, Mulder
Representative Moses was absent from the vote.
The MOTION FAILED (2-8).
Representative Grussendorf MOVED to ADOPT Amendment AD-4
(copy on file). Representative G. Davis OBJECTED.
Representative Grussendorf explained that the amendment
would restore $2.4 million general fund dollars in the
Longevity Bonus grants component.
Co-Chair Mulder noted that it is not the intent of the
Committee to short-fund longevity bonus grants. He stated
that he would entertain a supplemental request.
Representative G. Davis agreed that the intent would be to
seek supplemental funding if needed.
Co-Chair Mulder stressed that he would anticipate a
supplemental if there is short funding.
Representative Grussendorf Withdrew the amendment.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR explained that a statutory
change is needed before the program can be made based on
income.
Representative J. Davies MOVED to ADOPT Amendment AD-5 (copy
on file). Amendment AD-5 would restore a reduction of $296.8
thousand general fund dollars and $123.8 thousand dollars in
interagency receipts for the Citizens Foster Care Review
Panel.
Representative G. Davis spoke against the amendment. He
reiterated that the intent was to identify whole components
that could be eliminated. He maintained that the state could
live without the component.
Vice-Chair Bunde observed that he was the author of the
legislation that created the Citizens Foster Review Board.
Representative Grussendorf spoke in support of the
amendment. Co-Chair Therriault believed that there could
be a way to get the review at a lower cost. Representative
J. Davies emphasized that it is a citizen's review panel.
Volunteers spend time to address complaints.
Ms. Barton spoke in support of the amendment.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Bunde
OPPOSED: Davis, Foster, Kohring, Williams, Austerman,
Mulder, Therriault
Representative Moses was absent from the vote.
The MOTION FAILED (3-7).
Representative Grussendorf WITHDREW Amendment AD-6.
Representative Williams WITHDRW Amendment AD-7.
(Tape Change, HFC 99 -66, Side 2)
Co-Chair Mulder
Vice-Chair Bunde MOVED to authorize the Division of
Legislative Finance to make needed technical changes.
Representative J. Davies OBJECTED for purpose of discussion.
Mr. Teal noted that the Division could not make fund source
or substantive changes. There being NO OBJECTION, the
motion was adopted.
HB 50 and HB 51 were HELD in Committee.
ADJOURNMENT
The meeting adjourned at 6:15 P.M.
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