Legislature(1993 - 1994)
01/27/1993 01:30 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 27, 1993
1:30 P.M.
TAPE HFC 93 - 11, Side 1, #000 - end.
TAPE HFC 93 - 11, Side 2, #000 - end.
TAPE HFC 93 - 12, Side 1, #000 - #600.
CALL TO ORDER
Co-Chair Ron Larson called the meeting of the House Finance
Committee to order at 1:30 P.M.
PRESENT
Co-Chair Larson Representative Brown
Co-Chair MacLean Representative Foster
Vice-Chair Hanley Representative
Grussendorf
Representative Hoffman Representative
Navarre Representative Parnell
Representative Therriault
Representative Martin was not present for the meeting.
ALSO PRESENT
Representative Olberg; Major General Hugh L. Cox III, The
Adjutant General, Commissioner, Department of Military and
Veterans Affairs; Jeff Morrison, Director, Administrative
and Support Services Division, Department of Military and
Veterans Affairs; Thomas A. Mala, MD, MHP, Commissioner,
Department of Health and Social Services; Janet Clarke,
Director, Division of Administrative Services, Department of
Health and Social Services; Deborah Wing, Director, Family
and Youth Services, Department of Health and Social
Services; Edgar Blatchford, Commissioner, Department of
Community & Regional Affairs; Remond Henderson, Director,
Division of Administrative Services, Department of Community
and Regional Affairs; Bruce Geraghty, Deputy Commissioner,
Department of Community and Regional Affairs; Michael
Cushing, Research Analyst, Municipal and Regional Division,
Department of Community and Regional Affairs; John Walsh,
Deputy Director, Rural Development Division, Department of
Community and Regional Affairs; Representative Ed Willis.
SUMMARY INFORMATION
HB 55 FY 94 OPERATING BUDGET & LOAN PROGRAMS
HB 56 APPROP: FORMULA/MANDATED PROGRAMS; LEASES
OVERVIEWS: Military & Veterans Affairs
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Health & Social Services
Community & Regional Affairs
HB 55 FY 94 OPERATING BUDGET & LOAN PROGRAMS
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS
MAJOR GENERAL HUGH L. COX, ADJUTANT GENERAL, COMMISSIONER,
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS, provided the
Committee with a handout addressing the Department of
Military and Veterans Affairs (DMVA) proposed budget.
[Attachment #1 -on file].
He pointed out that the Alaska Statutes list
responsibilities of the Department.
* To provide trained and equipped military units to
respond to federal or state emergencies.
* To develop emergency response plans and assist
individuals and local governments to respond to
and recover from disasters - Division of Emergency
Services.
* To expand and improve the status of Alaska
veterans and coordinate veterans programs and
issues - Division of Veterans Affairs.
Commissioner Cox told the Committee that the key challenges
facing the Department are associated with philosophical
factors. A major element of the DMVA general fund budget is
the maintenance of National Guard facilities. The Division
of Emergency Services is challenged to sustain its current
level of public protection, disaster relief assistance, and
emergency response services in the face of recent budget
reductions. The Division of Veterans Affairs is faced with
a growing and aging population of Alaskan veterans, who will
be needing increased assistance in order to receive their
federal entitlement.
The Department has established a priority budget setting
process:
* A key feature has been to keep the State's
contribution to the Alaska National Guard
approximately the same level as it was in FY 93.
* Any reduction in the level of State funded support
would jeopardize the very existence of some Alaska
National Guard units spread throughout the State
in 109 communities.
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* Any reductions to the DMVA's budget, therefore,
need to come from other department BRU's.
General Cox continued page by page discussion of document
Co-Chair MacLean questioned the increase to the Hazardous
Substance Release Fund from the 470 Fund. Commissioner Cox
explained the increase to the 470 Fund would establish
response depots, appropriately equipped so that first
responders to all hazardous materials be contained.
Co-Chair MacLean asked if the State should contract for
maintenance to the facilities.
JEFF MORRISON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS,
stated that janitorial and custodial services are contracted
out although the Army Guard has a program for preventive
maintenance funding that it is more efficient and cost
effective to operate.
Co-Chair MacLean asked how much has been spent on the
Disaster Relief Fund to date. Mr. Morrison stated that from
the $2.9 million dollars, $1.3 million dollars has been
obligated for disasters in this fiscal year. The current
balance in that fund is $1.6 million dollars. Co-Chair
MacLean asked if DMVA plans to ask for a supplemental
appropriation. Commissioner Cox stated it would depend on
what happens this winter given the heavy snowfall.
Representative Brown questioned if the response depots
should be modified. Commissioner Cox agreed they should and
that the State should not duplicate any equipment in those
most vulnerable areas.
Representative Foster questioned the proposal which would
terminate the death gratuity. Major General Cox replied
that the major thrust of the Department is to reach out to
rural Alaska. Veterans in rural Alaska do not receive those
services, so the increase in the Veterans Service Officer's
program effect them. Representative Foster asked if the
program would generate more federal money. Commissioner Cox
replied that the return to the Alaskan veterans will be in
education benefits.
Co-Chair Larson agreed that the veteran services should be
increased and expressed concern with the termination of the
death gratuity. He asked if there would be federal benefits
to compensate for any lost State benefits. Commissioner Cox
replied that the veterans who are entitled to federal
benefits receive a burial allowance and the number of
veterans who receive this is twenty percent.
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Representative Therriault noted his concern with the
emergency response depots. He questioned if the Department
of Environmental Conservation (DEC) also has responsibility
for the depots. Major General Cox stated that the amounts
in the FY 94 budget have been negotiated with DEC.
Representative Larson noted the DMVA subcommittee would
consist of Chair Representative Foster and with members
Representative Kott, Representative Mulder, Representative
Willis and Representative Hoffman.
(Tape Change, HFC 93 - 11, Side 2).
DEPARTMENT OF HEALTH AND SOCIAL SERVICES
THEODORE A. MALA, MD, MPH, COMMISSIONER, DEPARTMENT OF
HEALTH AND SOCIAL SERVICES, provided the Committee with
handouts. [Attachments #2 - #4 - on file]. He noted that
the Department of Health and Social Services (DHSS) is one
of the largest departments in the state. The proposed
budget for FY 94 including the federal match is $756 million
dollars. General funds total $429 million dollars.
Commissioner Mala provided an overview of Attachment #3.
The Division of Public Assistance (DPA) is responsible for
the Administration of the following programs:
* Aid to Families with Dependent Children (AFDC)
* Food Stamps
* Medicaid
* General Relief Assistance
* General Relief Medical
* Energy Assistance
* Adult Public Assistance
* Alaska Work Program
* Permanent Fund Dividend Hold Harmless
* Alaska Longevity Bonus Hold Harmless
If the programs do not continue to be tied to federal
standards, the State will suffer heavy fines.
Representative Brown asked if there would be a supplemental
request for foster care for the current year. Commissioner
Mala stated that foster care is very expensive and the rates
of reimbursement vary according to need.
JANET CLARKE, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that the
Department will be seeking a supplemental for FY 93 for a
number of circumstances.
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Representative Navarre suggested that the problems with
foster care has originated from the foster parents
experience of not receiving substantial or correct
information regarding their foster child.
Representative Navarre asked if the funds placed into the
capital budget last year for computer coordination were used
for that purpose. Commissioner Mala replied that the
computers were ordered and then sat in boxes for a long
period of time until the Department of Administration was
notified. Ms. Clarke added that compliance with the
Information Management Program was required and delayed
action until September, 1992.
Representative Navarre asked if the purchased computers
would be placed into the outlying areas.
DEBORAH WING, DIRECTOR, FAMILY AND YOUTH SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that some
of the computers were slated for the rural areas and they
are beginning to receive computers at this time. The delay
was caused by a price fluctuation in computer costs. No
computers will be issued to the larger regions where Ms.
Wing felt there is a greater need.
Representative Navarre asked if the Information Management
System could result in a reduction of paper work. He
pointed out his concern that too much time is spent on paper
work and not enough on client services. Commissioner Mala
echoed Representative Navarre's concern. There is currently
a "paper work reduction committee" working on systems to
reduce the amount of paper work. Representative Navarre
recommended that more computers be purchased in order that
state currently working for the Department can become more
proficient in their work.
Co-Chair Larson asked if the passage of HB 65 would relate
to the proposed budget. Ms. Clarke stated it would.
Co-Chair Larson inquired if any of the federal mandated
programs would provide the Department relief. Commissioner
Mala noted that the Department is studying the programs and
then proposing a set of waivers for Public Assistance.
Co-Chair Larson noted that the DHSS subcommittee would be
Chaired by Representative Hanley and with members
Representative Toohey, Representative Gary Davis,
Representative Nordlund and Representative Brice.
(Tape Change HFC 93 - 12, Side 1).
DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS
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EDGAR BLATCHFORD, COMMISSIONER, DEPARTMENT OF COMMUNITY AND
REGIONAL AFFAIRS (DCRA), provided the Committee with a
handout. [Attachment #5 - on file].
Commissioner Blatchford noted that DCRA is the smallest
Department in the State and the Department which has taken
the biggest cut in personnel and budget in the past two
years. The functions of DCRA is to bring government to the
people and to be more efficient in the delivery of the
services.
Commissioner Blatchford pointed out that DCRA is a small
Department with three divisions: The Municipal and Regional
Assistance Division; the Division of Administrative
Services; and the Division of Community and Rural
Development.
REMOND HENDERSON, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS,
stated the Department has been targeted with a $5 million
dollar reduction. The total general funds available for
reduction were $113 million dollars. He added that seventy-
three percent of all funds in the Department are for
municipal assistance and revenue sharing. Eighteen percent
are for child care and Project Head Start.
In order to arrive at a $5 million dollar reduction, the
Homeowners Property Tax Exemption Program will be eliminated
and made a local option. Organizational grants will be
deleted and transferred to capital requests. There is a
proposed reduction of $100 thousand dollars to Alaska Legal
Services. An additional $500 thousand dollars will be taken
from the Day Care Assistance Program. Mr. Henderson added
there will be a small increase to program delivery and
administration.
Mr. Henderson discussed the trnasfer of organizational
grants to the capital budget. Co-Chair Larson inquired
which areas would be affected by the fund switch. Mr.
Henderson stated in FY 94, there would have been $200
thousand dollars budgeted for an organizational grant for
second year funding for Yakutat. There are no funds
included for those not yet incorporated boroughs. A list
will be provided to the Committee.
Representative Foster questioned if there were financial
outreach services to increase recovery. Mr. Henderson
replied there are local government specialists in the
regional field offices which work directly with the
communities in areas such as tax information, providing
accounting services and budgeting services.
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Representative Foster asked if there would be new boundaries
established within the Commission.
BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY
AND REGIONAL AFFAIRS, stated there would be four annexations
approved by the local Boundary Commission: Hoonah, Haines,
Cordova and Palmer.
Representative Foster asked for further information on the
road planning component of DCRA's budget proposal.
Commissioner Blatchford stated that DCRA is an advocacy
agency which seizes initiatives. Mr. Geraghty explained the
initiatives of the Department are to coordinate the State
revenues through a delivery system to rural Alaska.
Representative Parnell inquired about the impact of the
proposed reduction to Alaska Legal Services. Commissioner
Blatchford stated there would be no impact to DCRA only to
Alaska Legal Services.
Co-Chair Larson asked if local governments would have the
option to reduce senior citizen funding to zero. Mr.
Geraghty stated that concern would be addressed in HB 66.
Co-Chair Larson inquired if the large reduction to municipal
assistance and revenue sharing would be compensated for in
the budget. Commissioner Blatchford replied that DCRA does
make recommendations to the Governor and OMB on municipal
assistance and revenue sharing and currently there is
discussion ongoing which could minimize the impact.
Representative Brown referenced the Day Care Assistance
reduction. She pointed out the shortform shows a reduction
of $989 thousand dollars and asked for further information.
Mr. Henderson responded the larger amount included the $390
thousand dollar reduction taken in FY 93. He pointed out
there are currently less children enrolled in the program
than there were in FY 93. The Department is trying to
access what has driven the costs up. Day care assistance
rates have risen fifteen percent.
Representative Foster thanked Commissioner Blatchford on the
Department's work on the Community Development Quota Program
(CDQ).
MICHAEL CUSHING, RESEARCH ANALYST, DEPARTMENT OF COMMUNITY
AND REGIONAL AFFAIRS, stated that a program is being
implemented to deal with fish taxes. This program will
include implementation of HB 456, passed two years ago,
sharing fifty percent of the taxes back with the
municipalities. The new program will take the taxes
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collected outside the municipalities and share fifty percent
of it back to communities around the State who can
demonstrate an impact from the fishing industry. Half of
those taxes are estimated to total $1.5 million dollars.
Co-Chair Larson noted that the Community and Regional
Affairs Subcommittee would be Chaired by Representative
MacLean with members Representative Olberg, Representative
Williams, Representative Bettye Davis and Representative
Brice.
Commissioner Blatchford asked to provide the Committee with
a short explanation of the CDQ Program. He noted that a
$300 thousand dollar investment by the State in the past
year, returned $20 million dollars to the communities in
Western Alaska.
JOHN WALSH, DEPUTY DIRECTOR, COMMUNITY RURAL DEVELOPMENT,
DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS, provided a
basic overview of the CDQ Program. The fish is pollack and
represents the largest bio-mass per specie of the ground
fish resource in the Bering Sea. It is a Seattle based
fishery.
The profit sharing arrangements are multiple to the village
corporations. An agreed upon value per ton can be brought
back to a region for a fishery development project.
ADJOURNMENT
The meeting adjourned at 3:25 P.M.
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