Legislature(2003 - 2004)
03/03/2003 01:49 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
March 03, 2003
1:49 PM
TAPE HFC 03 - 29, Side A
TAPE HFC 03 - 29, Side B
CALL TO ORDER
Co-Chair Harris called the House Finance Committee meeting
to order at 1:49 PM.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Mike Chenault
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Reggie Joule
Representative Carl Moses
Representative Bill Stoltze
MEMBERS ABSENT
Representative Jim Whitaker
ALSO PRESENT
Cheryl Frasca, Director, Division of Management & Budget,
Office of the Governor
PRESENT VIA TELECONFERENCE
None
SUMMARY
HB 100 "An Act making supplemental and other
appropriations; amending appropriations; and
providing for an effective date."
HB 110 was REPORTED out of Committee with a "do
pass" recommendation.
HB 110 "An Act making supplemental and other
appropriations; amending appropriations; making
appropriations to capitalize funds; and providing
for an effective date."
HB 110 was HELD in Committee.
HOUSE BILL NO. 100
"An Act making supplemental and other appropriations;
amending appropriations; and providing for an effective
date."
HOUSE BILL NO. 110
"An Act making supplemental and other appropriations;
amending appropriations; making appropriations to
capitalize funds; and providing for an effective date."
Co-Chair Williams MOVED to ADOPT Committee substitute for
House Bill 100, Work Draft 23-GH1061/I (Utermohle, 3/3/03),
be ADOPTED.
Co-Chair Harris explained that the committee substitute
combined House Bill 100 and House Bill 110, thereby
containing both the regular and fast track supplemental in
one bill. He provided members with a spreadsheet by the
Legislative Finance Division, which detailed the changed
made by the committee substitute (copy on file).
AMANDA RYDER, FISCAL ANALYST, LEGISLATIVE FINANCE, reviewed
changed made in the committee substitute. She pointed out
the differences between the Governor's supplemental request
and the committee substitute, as illustrated in the
worksheet (copy on file). She explained that n/a was used
on the worksheet (without a corresponding section number)
for sections that were deleted.
Ms. Ryder then went on to discuss the worksheet, item by
item, as follows:
Section 1(a)
DEPARTMENT OF ADMINISTRATION, OFFICE OF PUBLIC ADVOCACY
The Governor's request included $3.3 million in general
funds, including $1.1 million for caseload growth, and $2.2
million for short funding. The CS recommends funding only
$2.2 million.
DIVISION OF FINANCE
Ms. Ryder explained that $400 thousand for additional data
processing charges was not recommended in the committee
substitute.
Section 1(d)
DEPARTMENT OF ADMINISTRATION, FINANCE
The Governor's bill requested $1.157 million, which was not
included in the Committee Substitute.
DEPARTMENT OF ADMINISTRATION, SENIOR SERVICES
The governor's bill included a $300 thousand decrement from
over funding. The decrement is not included in the CS. She
pointed out that the funding would lapse into the General
Fund at the end of the fiscal year.
DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT, ASTF
A fund source change of $10.5 million of the Alaska Science
and Technology Foundation endowment earnings, not including
decrement was included in the CS.
Section 2d, (DCED)
Ms. Ryder explained that 5% of profit from grants is
returned to the endowment according to statute. The bill
appropriates into the endowment an estimated $130 thousand.
Section 3c
DEPARTMENT OF CORRECTIONS, INMATE HEALTH CARE
The Governor's supplemental requested $187.7; $100 thousand
is recommended in the CS.
Section 18
DEPARTMENT OF CORRECTIONS
Ms. Ryder observed that $3.4 thousand was included in the
committee substitute to cover miscellaneous claims and
services, the same as the Governor's supplemental.
DEPARTMENT OF EDUCATION, FOUNDATION FORMULA
While a decrement appeared in the Governor's supplemental
for unneeded funds, information available in October
reflected a lower student count, and therefore the $6.7
million will lapse into the General Fund. The Committee
Substitute does not reappropriate the funds.
Section 4
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Ms. Ryder noted that $100 thousand for legal services
regarding the Red Dog Mine air quality dispute was added, as
an amendment to the Governor's supplemental and is included
in the committee substitute.
Section 8c
DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
The committee substitute is funding $2 million of a
requested $2.8 million for program short funding.
YOUTH FACILITIES
The Kenai Peninsula Youth Facility is not funded in CS; the
McLaughlin Youth Facility increase of $25 thousand is also
not included in CS. $20 thousand for medical costs at the
Fairbanks Youth Facility is not included in the CS.
Supplemental funding for the Johnson Youth Facility ($11.5
thousand) and Bethel Youth Facility ($66.1 thousand) are not
included in CS.
Section 8h
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
The Governor's request for $195 thousand of receipt-
supported services for operating costs is recommended at
$100 thousand in the Committee Substitute.
Section 8i
DEPARTMENT OF HEALTH AND SOCIAL SERVICES MEDICAID, SERVICES
Ms. Ryder explained that the request was for $28,055 in
general funds, with a decrement of $16,064 and $1 million in
program receipts, for a total funding of $10.9 million. The
committee substitute only funds $23 million of the general
fund request, which is the federal match rate and does not
include growth in claims.
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, COMMISIONER'S
OFFICE
The suicide follow back study is not included in the CS.
With several months remaining in the fiscal year, there
remains opportunity to pursue the study.
DEPARTMENT OF LAW
Ms. Ryder observed that the $95 thousand requested for
unexpected move and lease costs were not funded in the CS.
JOINT SALMON TASK FORCE
The extended lapse date to June 30, 2004, was not included
in the CS.
Section 12 (d), MILITARY AND VETERANS AFFAIRS
Ms. Ryder noted that $830 thousand was included in the
committee substitute to cover emergency services, but had
not been included in Governor's budget. The funds had
originally been requested to be deposited into the disaster
relief fund.
Section 5
MILITARY AND VETERANS AFFAIRS, DISASTER RELIEF FUND
Ms. Ryder explained that $11.6 million general funds and $31
million federal funds were requested. The difference
between the Governor's request and the Committee Substitute
is $830 less general funds.
Section 14a
DEPARTMENT OF PUBLIC SAFETY, FISH AND WILD LIFE PROTECTION
The Governor's request was for $229.3 thousand in general
funds; $171.1 thousand was included in the CS.
DEPARTMENT OF PUBLIC SAFETY, FISH AND GAME FUND
Revised language appropriating criminal fines, penalties and
forfeitures into the Fund was not included in the CS.
Section 14b
DEPARTMENT OF PUBLIC SAFETY, CRIMINAL RECORDS
The request reflects a decrement corresponding to an
increment in DCED, Division of Insurance, which occurred due
to a pass through of Federal monies. She noted that to
decrement a full $200 thousand would result in short
funding, therefore a decrement of only $100 thousand was
recommended in the Committee Substitute.
Section 17f
STATE DEBT
The request would cover debt service, for school debt
reimbursement. Since less was needed than anticipated, as
well as a higher level of cigarette tax income than
projected, the Governor's budget included a $6.4 million
decrement in general funds. However, the committee
substitute does not remove the $6.4 million.
Section 16 (o)
DEPARTMENT OF TRANSPORTATION
Language added to the Governor's request was changed in the
committee substitute to indicate an amount equal to the
amount remaining from FY 02, which can then be appropriated
from the General Fund for the purposes of the Whittier
Tunnel toll facility.
Section 16Q and 20
DEPARTMENT OF TRANSPORTATION
The request reflects increased costs for negotiated contract
with the Confidential Employees Association. In order to
spend FY03 funding, Section 6 from the FY03 Operating Budget
had to be repealed. Section 20 of the committee substitute
repeals Section 6 in the operating budget, and enables the
department to expend $25.7 thousand general funds already in
their budget. Therefore, only the $46.9 thousand of program
funds is included in the committee substitute.
RATIFICATION
The request for the ASTF endowment of $267 thousand was
included in the committee substitute, which appropriates
grant repayments to the Fund.
CHERYL FRASCA, DIRECTOR, DIVISION OF MANAGEMENT & BUDGET,
OFFICE OF THE GOVERNOR, spoke to departmental examination of
the Governor's proposed budget. She stated that further
efficiencies would be reported as they are discovered.
Vice-Chair Meyer MOVED to ADOPT Amendment #1 (copy on file).
Representative Croft OBJECTED.
Co-Chair Harris explained that Amendment #1 referred to
Section 14, DEPARTMENT OF PUBLIC SAFETY. The Amendment
changes the amount of $171,100 thousand to $189,111, in
order to cover fuel cost increases. He noted that the
department had requested an $18 thousand increase.
Representative Stoltze stressed that not much flexibility
was available in regards to fuel costs, and that the
amendment was not unreasonable.
Representative Croft referred to Amendment #8 (copy on
file), and recalled that the Department of Public Safety had
previously requested an increment of $154,600 during the
FY03 budget process. He pointed out that the legislature
had denied the request. Representative Croft emphasized his
belief that departments should adhere to legislative budget
decisions.
Representative Croft WITHDREW his OBJECTION. There being NO
OBJECTION, Amendment #1 was adopted.
Co-Chair Williams MOVED to ADOPT Amendment #2 (copy on
file.) Representative Croft OBJECTED.
Co-Chair Harris noted that Amendment #2 deleted Section
2(c), pertaining to $115 thousand for the Korean USA
economic conference, noting that the request would be funded
in the Capital Budget.
He further explained that the amendment also deleted Section
12(d), pertaining to the Department of Military and
Veteran's Affairs, stating that the item was actually
intended for the FY04 budget, and could be removed from the
supplemental.
Representative Croft clarified that emergency funding would
be forward-funded.
Co-Chair Harris further noted that the amendment went on to
eliminate the language stating "and for core emergency
preparedness and operations costs".
He also referred to Section 18, line 17, pertaining to the
Department of Corrections, amending the amount from $3,385
to $5,829.
Representative Croft WITHDREW his OBJECTION. There being NO
OBJECTION, Amendment #2 was ADOPTED.
Representative Croft MOVED to ADOPT Amendment #3. Co-Chair
Harris OBJECTED
Representative Croft explained that the amendment added $1,1
million to the Office of Public Advocacy (OPA), Department
of Administration. He discussed the need to cover caseload
growth in Children in Need of Aid cases. He maintained that
the current bill would penalize OPA for caseload growth over
which they had no control, and speculated that abused young
children may also be adversely affected by denying this
request. He questioned what message the legislature would
send by not funding this request, and suggested that
systemic changes be investigated to more effectively handle
caseload growth in this area.
Co-Chair Harris expressed his sympathy with the amendment.
He concurred that there was little control over caseload.
He however speculated that such a request would again
surface in a supplemental, and maintained that every
department was being asked to "scrub" their budget. He
stated his commitment to move forward with the Committee's
recommendation, with the likelihood that the request would
be reconsidered at a later time.
A roll call vote was taken on the motion.
IN FAVOR: Croft, Joule, Moses
OPPOSED: Foster, Hawker, Meyer, Stoltze, Chenault,
Williams, Harris
Representative Whitaker was not present for the vote.
The MOTION FAILED (3-7).
Representative Croft MOVED to ADOPT Amendment #4 (copy on
file.) Co-Chair Harris OBJECTED.
Representative Croft explained that the amendment added
$1.157 million to the Office of Public Defender's Office.
He noted that the amount would cover the FY03 caseload
growth. He discussed the issue of historically short
funding the Public Defender's Office, and questioned the
possible negative outcome if the office was not subsequently
funded.
Co-Chair Harris maintained his belief that this request
would resurface in the future.
A roll call vote was taken on the motion.
IN FAVOR: Croft, Joule, Moses
OPPOSED: Foster, Hawker, Meyer, Stoltze, Chenault,
Williams, Harris
Representative Whitaker was not present for the vote.
The MOTION FAILED (3-7).
Representative Joule MOVED Amendment #5 (copy on file). Co-
Chair Harris OBJECTED.
Representative Joule explained that the Amendment changed
the amount (on Page 3, line 28) from $2 million to $2.833
million to cover the cost of adoption programs for special
needs children, as follows.
"The subsidized adoption program helps children with
special needs obtain permanent homes by providing the
adopting family a monetary subsidy. It enables families
to overcome the financial hurdle so that they can make
the commitment to adopt a special needs child. This is
a cost effective alternative to foster care and places
children in permanent, stable families. The additional
money is needed to cover caseload growth and an
increase in the subsidy. In FY 2003, the program was
intentionally short funded and did not account for the
anticipated caseload growth. This is a wonderful
program that provides stable, permanent homes for
children while providing a cost savings to the state.
It makes more sense to provide this funding then to pay
for increased foster care costs while allowing children
to languish in nonpermanent homes."
Representative Joule asked about the true cost of the
adoption process and the effects on these children of short
funding the program.
JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES responded that the
goal of program, in addition to locating permanent homes for
these children under federal mandate, was to monitor
caseload growth, and complete a thorough projection of
foster care costs. She speculated that if, after an
investigation of all budget costs, adequate funding for the
was not available, the Department may once again approach
the Governor's office. She speculated that a lack of
funding would not mean that children would not find
permanent homes.
Co-Chair Harris reiterated his belief that the amount would
be revisited prior to the end of the legislative session.
A roll call vote was taken on the motion.
IN FAVOR: Croft, Joule, Moses
OPPOSED: Foster, Hawker, Meyer, Stoltze, Chenault,
Williams, Harris
Representative Whitaker was not present for the vote.
The MOTION FAILED (3-7).
Representative Joule WITHDREW Amendment #6
Representative Joule then MOVED Amendment #7(copy on file.)
Co-Chair Harris OBJECTED.
Representative Joule explained that Amendment #7 would add
$3.4 million for erosion of beachfront in Shishmaref. He
noted that the total cost of erecting a barrier was $4.5
million, and that a community non-profit had raised over
$1.1 million on its own. The community had been declared a
federal disaster area; since November of 2002, a total of 18
homes had been relocated. He went on to state that the
community had voted to relocate, a process that could take
up to seven years. He stated that Senator Stevens had
created two separate appropriations: one for $1 million for
communities with erosions problems, and another for $1
million for the relocation and development of the community
of Shishmaref. He explained that before relocating, a
barrier must be built to protect them from the ocean.
Representative Joule referred to an article in People
Magazine and other news publications. He suggested that
placing funding in the supplemental made it accessible in
the time for needed construction, before further damage was
done. He urged favorable consideration of the amendment.
Representative Joule referred to discussions with
Congressman Young about the need to create the barrier.
Co-Chair Harris explained his objection, after expressing
his support of the project. He maintained that he hoped for
concurrence with the Administration, but had not received it
yet. He stated plans to work with the appropriation on the
House Floor, assuming that the Administration concurred by
that time.
A roll call vote was taken on the motion.
IN FAVOR: Joule, Moses, Croft, Foster
OPPOSED: Meyer, Stoltze, Chenault, Hawker
Representative Whitaker was not present for the vote.
The MOTION FAILED (4-6).
Representative Croft MOVED Amendment #8 (copy on file.) Co-
Chair Harris OBJECTED.
TAPE HFC 03 - 29, Side B
Representative Croft observed that in four different
departments, such as the Department of Law and the
Department of Public Safety, after experiencing budget cuts,
the departments then presented a supplemental request. He
also referenced Committee discussions with the Department of
Transportation, regarding maintenance stations that were
closed and then opened at the request of the new
Administration. He suggested that the issue at hand was the
true meaning and impact of budget decisions, and the sole
power of legislative appropriation. He referred to a list
of proposed increments from FY03 that were rejected by the
legislature.
Representative Croft suggested that the amendment not only
presented cost savings, but also upheld the budgetary
process. He observed that a great deal of deliberation went
into the legislative decisions, and maintained that the
decisions ought to be upheld. He suggested that departments
ought to pay more attention to proposed
decrements/increments.
Co-Chair Harris maintained his objection, and stated that
some accountability was asked of departments in responding
to decrements. He suggested that the legislature needed to
decide whether or not to insist that departments absorb
budget reductions, and observed that the new Administration
chose not to insist on this. He stated that, although he
did not disagree with Representative Croft, the current
Administration had only been dealing with such policy issues
for less than six months. He expressed his belief that the
Committee should uphold the Governor's actions.
A roll call vote was taken on the motion.
IN FAVOR: Moses, Croft
OPPOSED: Meyer, Stoltze, Chenault, Foster, Hawker, Joule
Representative Whitaker was not present for the vote.
The MOTION FAILED (2-8).
After a brief AT EASE, Co-Chair Harris MOVED Amendment #9
(copy on file.)
Co-Chair Harris explained that the Amendment added $400
thousand previously reduced from the Department of
Administration, Division of Finance.
There being NO OBJECTION, Amendment 9 was adopted.
Co-Chair Williams MOVED to report CSHB 100 (FIN) out of
Committee.
Representative Joule OBJECTED. He expressed his appreciation
that Co-Chair Harris stated a willingness to address issues
contained in the amendments at a later time.
Representative Joule WITHDREW his OBJECTION.
There being no further objection, the MOTION was PASSED.
HB 110 was REPORTED out of Committee with a "do pass"
recommendation.
HB 110 was HELD in Committee.
ADJOURNMENT
The meeting was adjourned at 2:49 PM.
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