Legislature(2009 - 2010)HOUSE FINANCE 519
01/26/2009 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Office of Management and Budget – Budget Overview | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 26, 2009
1:31 p.m.
CALL TO ORDER
Co-Chair Hawker called the House Finance Committee meeting
to order at 1:31:57 PM.
MEMBERS PRESENT
Representative Mike Hawker, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas, Jr., Vice-Chair
Representative Allan Austerman
Representative Harry Crawford
Representative Anna Fairclough
Representative Richard Foster
Representative Les Gara
Representative Reggie Joule
Representative Mike Kelly
Representative Woodie Salmon
MEMBERS ABSENT
None
ALSO PRESENT
Karen Rehfeld, Director, Office of Management and Budget;
John Boucher, Senior Economist, Office of Management and
Budget, Office of the Governor
PRESENT VIA TELECONFERENCE
None
SUMMARY
^OFFICE OF MANAGEMENT AND BUDGET - BUDGET OVERVIEW
Co-Chair Hawker reviewed the purpose of the meeting, which
is to begin the public part of the budgeting process
beginning with the Office of Management and Budget.
1:33:47 PM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
introduced the staff of the Office of Management and Budget
(OMB): Jack Kreinheder, Jo Ellen Hanrahan, Diane Burnham,
Steve Hildebrand, Mike Crabb, Mary Sutton, Lena Simmons,
Kym Mauseth, Karen Elliott, Barbara Towne, John Boucher,
and Joan Brown.[ltc1]
1:38:29 PM
Ms. Rehfeld referred to four handouts used in the
presentation. She began with the handout entitled "FY 09/FY
10 Budget Overview" (copy on file.) She listed the budget
guidelines as found on page 2. The budget starts with
clearly established goals communicated to state agencies,
the legislature, and the public. She emphasized that every
correspondence with individuals and communities requesting
budget information or assistance contains these guidelines.
Ms. Rehfeld reviewed the budget timelines on page 3. She
pointed out that the budget is a continuing process and is
a planning tool. He outlined the year-long budget process.
The fiscal year begins July 1 and goes to June 30. Planning
starts almost immediately with the new fiscal year.
Detailed instructions are sent to the departments around
the first of August. Discussions begin in September and the
budget is refined and delivered to the legislature and the
public on December 15, as required by statute.
1:41:52 PM
Ms. Rehfeld described the budget direction and fundamental
building blocks on page 4. These building blocks are used
to frame the discussion with agencies: What are the core
services; what efficiencies can be found in service
deliveries; and can savings be identified within the
department or can existing resource be redirected to hire
priority items. She clarified that the goal is to look
critically at programs and services in order to find
savings and efficiencies, while still providing needed
services.
Representative Fairclough asked if all departments were
given these budget directions. Ms. Rehfeld explained that
the same detailed instruction is provided to all
departments. She offered to provide that information.
Representative Fairclough requested a copy of the
instructions given to the departments in order to meet the
administration's goals.
1:43:14 PM
Ms. Rehfeld turned to budget preparation - page 5. She
described the fundamentals, which include accountability, a
framework that has been embraced by some and resisted by
others. Part of the effort this year was to engage
departments in revisiting performance measures. She
maintained that there are positive things happening in
performance management, but it still has a ways to go.
1:44:30 PM
Ms. Rehfeld described the past year as unprecedented
volatility in revenue. She walked through page 6, FY 09
revenues and expenditures. In December of 2007 a budget was
proposed based on a forecasted revenue price of $66.32 per
barrel with about $5.3 billion in revenue. At that time a
surplus was projected. She spoke of the revised oil
forecast as it progressed from December 15, 2007, through
the spring of 2008. The price per barrel was up to $83.04
with a potential for $7.5 billion in revenue. Budget
appropriations were about $5 billion and savings increased
to over $1 billion. After the legislature adjourned, the
price per barrel increased to over $100 per barrel
increasing revenue expectations. At the same time, Alaskans
were hit by high fuel costs. During the special session
additional appropriations were made. From September to
December 15, 2008, the price of oil rapidly declined. The
budget in December was based on the 2008 fall forecast, a
price per barrel of $77.66, and a shortfall of $400,000.
The last column on page 6 shows a possible interim update
and is not an official forecast, but there will be a
revenue shortfall and there will be options to address it.
1:48:50 PM
Co-Chair Hawker asked why the term "shortfall" was used in
FY 09 and "shortfall" is being used for FY 10. Ms. Rehfeld
explained that money was put into savings and with the
shortfall, not as much money will continue to be put into
savings. If the revenue shortfall exceeds the amount in
savings, then expenditures would need to be reduced and
reserves tapped in order to address the deficit. She said
authorization would be needed to access reserve accounts.
Co-Chair Hawker emphasized that the discussion is referring
to the current fiscal year - FY 09. Ms. Rehfeld clarified
that the current fiscal year ends June 30, 2009.
1:51:21 PM
Representative Gara questioned if the price per barrel is
the projected average price of oil for FY 09. Ms. Rehfeld
said it was. He asked for clarification of how the average
price was attained. Ms. Rehfeld explained that it is
estimated to be in the $60's. Representative Gara thought
it averaged $90 per barrel for the first seven months of FY
09. Ms. Rehfeld thought it was about that.
Representative Gara did not consider there to be a deficit
this fiscal year. He described a scenario that included $5
billion in savings. He wondered how the savings account
works.
1:53:17 PM
Ms. Rehfeld explained that of the $5 billion put into
savings over two fiscal years, about $4 billion went into
the Constitutional Budget Reserve (CBR) and $1 billion went
into the Statutory Budget Reserve (SBR). One billion of the
deposit to the CBR was made in FY 09; the rest was
deposited in FY 08.
Co-Chair Hawker added that a large amount - $3 billion -
was put into the supplemental budget during the last
session, but which deal with the FY 08 budget.
Representative Gara noted that another billion was
committed to savings for this year. He wondered what would
happen if that money was not available. Ms. Rehfeld said
that the $1 billion deposit to the CBR has already
occurred. Ms. Rehfeld said that it would require
legislative authorization to access any reserve accounts.
Co-Chair Hawker summarized that "you cannot spend without
the authority of the legislature".
1:55:23 PM
Vice-Chair Thomas asked how many votes it would take to
access the $1 billion. Ms. Rehfeld said that it required a
three-quarters vote to access the CBR.
Co-Chair Hawker pointed out that there were other reserves
to consider when making up for a shortfall, if there is a
shortfall.
1:56:39 PM
Ms. Rehfeld addressed the steps taken and the steps in
process to address a revenue shortfall on page 7 of the
handout. She noted that the governor was interested in
departmental savings in May 2008 when she signed the
appropriation bills.
Ms. Rehfeld explained that there is typically a general
fund lapse at the end of the fiscal year. The governor
encouraged the departments to seek efficiencies at the
beginning of the year in order to produce savings. The
Departments of Public Safety and Corrections were held
harmless from the savings target plan. About half of the
$20 million target was identified as being from personal
services. The departments were to report back quarterly.
Ms. Rehfeld thought the FY 09 supplemental bill would have
reductions in current year expenditures.
Co-Chair Hawker wished to discuss the $20 million reduction
during the supplemental proposal process.
Representative Austerman asked where the $20 million in
savings would come from. Ms. Rehfeld said it targets the
current year's budget.
1:59:49 PM
Ms. Rehfeld spoke of a recent hiring freeze proposed by the
governor. Also included is a ban on non-essential
purchases.
Co-Chair Hawker questioned what "non-essential" items were.
He suggested never funding those items. He questioned how
much state spending is really not needed. Ms. Rehfeld
thought it would be up to the commissioners to determine
non-essential items.
2:01:34 PM
Representative Crawford wondered how many positions would
be affected by the hiring freeze and what the savings might
be.
Ms. Rehfeld said that as of December 31, 2008, there were
approximately 1,500 vacant full-time positions, which, if
left open, could result in $12 million worth of savings.
Some of the positions might already be involved in the $20
million savings attempt. Some might be exempt. They would
need to be addressed case by case. She opined that general
fund savings would be reduced by a hiring freeze. She
termed it a management tool.
Representative Crawford questioned further how many
positions might not be filled. Ms. Rehfeld could not
provide that number.
2:04:55 PM
Co-Chair Hawker commented on how the agencies are
struggling to hire competent workers in needed positions.
He mentioned an example of a petroleum economist who would
soon need to be replaced. He maintained that a hiring
freeze was not a spending freeze because agencies are free
to reallocate the dollars saved by not filling a position.
He requested information on hiring freeze constraints that
might result in a true savings plan.
Ms. Rehfeld agreed that agencies are having a difficult
time recruiting and retaining positions. She assumed many
of those types of positions would be exempt from the
freeze. She thought a further conversation was needed on
recruitment. She emphasized that under the current
financial situation, departments do need to reduce the
general fund by limiting hiring. She spoke of transfers in
and out of personal services and a heightened awareness by
OMB of managing the cost of positions across all
departments.
Co-Chair Hawker thought there were internal controls
regarding line-item transfers in personal services that
were working well.
2:10:27 PM
Representative Fairclough wondered about the list of
vacancy factors and the aging of how long the positions
have been held open. Co-Chair Hawker said that information
is agency specific and available. He referred to reference
books about budgeting vacancy factors. Representative
Fairclough requested information specifically on the aging
of particular positions. Co-Chair Hawker suggested asking
the agencies for that information.
Representative Fairclough asked about the impact of a
hiring freeze on small businesses and unemployment. She
agreed with the statement, "We can't cut our way out of a
$1 billion problem." Ms. Rehfeld reported that there was a
conversation about that. The goal is to minimize the impact
to the economy. She pointed out that state funds provide
resources to stabilize all communities.
Co-Chair Stoltze thought there were built-in safety valves.
He opined that state employees are for carrying out state
functions, not just in order to provide an economic
stimulus in the state.
2:16:49 PM
Representative Gara questioned the hiring freeze and
thought that commissioners were not included in the
decision. Ms. Rehfeld explained the process used to find
solutions to the budget shortfall. The decision to
implement the hiring freeze was made by the Governor but
previously discussed with the commissioners. Representative
Gara said it had not been communicated to the departments.
Ms. Rehfeld reiterated that the commissioners were aware of
it.
Representative Gara inquired if other budget-saving options
were discussed. Ms. Rehfeld reported that many options were
discussed. She termed the hiring freeze as a management
tool in order to reduce the general fund spending.
2:22:28 PM
Representative Austerman said it was unusual to see a
request by the governor to cut $20 million out of the
current budget. He asked if those cuts would be highlighted
in the supplemental budget.
Ms. Rehfeld spoke of the supplemental bill's goal to look
at operating and capital reductions in the current year, in
addition to their savings plan. She provided a scenario
with supplemental requests reduced due to savings
mechanisms in place.
2:25:11 PM
Representative Austerman wished to see the $20 million in
cuts depicted in the budget. Ms. Rehfeld said an approach
to include a savings target amount in the supplemental bill
was considered. Instead, requests should be offset by the
amount of savings from cuts.
Co-Chair Hawker pointed out that the supplemental approach
is still being developed. He agreed with Representative
Austerman's request to see evidence of savings in the
supplemental budget.
2:26:38 PM
Vice-Chair Thomas spoke of the Department of Fish and Game
and Office of Public Defender budgets, which are federally
mandated. He wondered if they would be exempt. Ms. Rehfeld
addressed the Public Defender budget and how safeguards
were built in, in order to deliver the services needed
without the need for a large supplemental request. She
maintained that even mandated budgets could be looked at
for reductions.
Vice-Chair Thomas thought the hiring freeze would impact
necessary positions in Fish and Game and in the
Administration. Ms. Rehfeld said exemptions would be
considered on a case by case basis. Given the current
situation, the hiring freeze is an appropriated management
tool.
Co-Chair Hawker mentioned departments with seasonal
employees. He wondered if the freeze would accommodate
those needs. Ms. Rehfeld said OMB would be discussing that
with the departments.
2:31:38 PM
Representative Gara said it was difficult to provide a list
of unnecessary services. Ms. Rehfeld thought that
conversation should be broader than just a list by the
governor. Co-Chair Hawker hoped that the discussion would
be a part of a public forum.
Representative Gara asked about exemptions on employees
that save the state money. Ms. Rehfeld said there were some
specific exemptions and others that would require a waiver.
2:33:58 PM
Ms. Rehfeld turned to page 8, the estimated balances in the
reserves as of December 31, 2008. There is about $6.8
billion in the CBR, split between the main fund with $3.2
billion and the sub fund at $3.6 billion
Co-Chair Hawker asked if it was market value adjusted. Ms.
Rehfeld said she would have to find out.
Ms. Rehfeld listed the amount of funds in various reserves:
the Statutory Budget Reserve - $1 billion; the Public
Education Fund - $1 billion; and the Alaska Housing Capital
Fund - $342.3 million.
Representative Austerman asked what the sub fund in the CBR
was. Ms. Rehfeld explained that it is the fund that can be
more aggressively invested yielding a higher rate of
return. Co-Chair Hawker called it "longer horizon
investments".
2:36:13 PM
Ms. Rehfeld explained the FY 09 supplemental bill as
described on page 9. The supplemental bill is due to the
legislature on February 3, 2009, and will be accompanied by
an interim FY 09 forecast. Reductions in the current year
operating and capital budgets are expected. OMB will be
seeking authorization to access reserve funds to balance
the budget.
Ms. Rehfeld brought attention to the FY 09 Economic
Stimulus Bill, page 10, which is moving quickly at the
federal level. It is expected to be done by mid-February.
OMB is working closely with the Alaska delegation on the
components of the bill. The bill is formula and grant
driven and would require a request for authorization to
receive and spend federal stimulus dollars.
Co-Chair Hawker emphasized that much of past federal
spending was in earmarks. He understood that this would no
longer hold true. The stimulus package would be looking at
formulaic funding to existing programs which need approval
by the legislature. Ms. Rehfeld noted that a large part of
the package would be from the Department of Transportation
and Public Facilities.
2:39:27 PM
Ms. Rehfeld addressed page 11 - the FY 10 budget overview.
The FY 10 budget proposes to spend less general fund
dollars that the current year, $4.9 billion compared to
$5.2 billion in the current year, excluding the resource
rebate. Co-Chair Hawker argued that it should be included.
Ms Rehfeld agreed that it needed to be included as a FY 09
expenditure.
Ms. Rehfeld pointed out that the administration budgeted
$389 million below the fall revenue forecast of $5.27
billion. An interim forecast will be provided on February
18 along with budget amendments. The current economic
circumstances may also impact the amended budget request.
2:41:30 PM
Ms. Rehfeld highlighted a pie chart entitled "FY 10 Budget
Proposal Totals $11.2 Billion". Of the $11.2 billion, $4.9
billion is general fund dollars. The Agency and University
Operations, Non-Formula, equals $3.7 billion.
Co-Chair Hawker interjected that there were past
conversations about the use of consistent, comparable
forecast language between the administration and the
legislature. He voiced appreciation for efforts in that
area. Ms. Rehfeld agreed that the conversation is now "on
the same page".
Ms. Rehfeld noted that the Agency and University Operations
part of the budget is about 33 percent of the total budget.
It also includes supplementals, new legislation, potential
amendments, and fiscal notes.
Ms. Rehfeld reported that the yellow portion called
"Formula Programs" represents about 13 percent of the total
budget. For the most part, that is the Medicaid area of the
budget and includes smaller formula programs. Cost
containment measures have been seen recently in this
category, which will appear as savings in the current year.
She noted an increase in the federal reimbursement rate for
Medicaid. Potentially, in the economic stimulus package
there will be an additional increase in the federal rate of
reimbursement.
Ms. Rehfeld highlighted the purple portion if the pie
labeled "K-12 Education & Pupil Transport" for $1.1
billion, about 10 percent of the total budget and about 22
percent of the general fund budget. This is funding for
Alaska's 53 school districts and 128,357 students. It
incorporates the second year of the three-year education
plan passed last year. It shows an increase in the base
student allocation and the adjustment for intensive
students, as well as an increase in the district cost
factors. It is roughly a $50 million increase for education
this year. There is also a small increase in the pupil
transportation program.
The light blue area labeled "Direct Deposit to Retirement
Systems" - $451 million, the maroon area, "Revenue Sharing"
- $60 million, the orange area, "Oil Tax Credits" $300
million, and the grey area, "Debt and Fund Capitalizations"
- $334 million, represent 10.2 percent of the total budget.
Ms. Rehfeld explained that the retirement system unfunded
liability has been a high priority for the legislature and
the governor to address. Based on the valuation, there is
an additional deposit of $160 million in FY 10, and that is
included in this analysis. She predicted that area would
merit future discussion with the legislature.
Ms. Rehfeld discussed the oil tax credits. The amount of
$400 million was authorized in the current year budget for
payment under oil tax credits. The proposal is to reduce
this to $300 million in the FY 10 budget. She explained
that it is an issue of timing.
Co-Chair Hawker said he has asked the Department of Natural
Resources for a presentation pertaining to this budget
item. Ms. Rehfeld agreed that would be helpful.
Ms. Rehfeld continued to explain items under the debt and
fund capitalizations category. Co-Chair Hawker commented
that the "nuts and bolts" of the budget are in this
category. Ms. Rehfeld praised Co-Chair Hawker's
"Legislative Finance Overview" document as being very
helpful.
2:48:47 PM
Ms. Rehfeld spoke of the red portion of the pie entitled
"Capital Expenditures" - $1.7 billion - which represents
about 15 percent of the total budget. There are many
components within this category: General Fund - $307.2
million, Federal Funds - $1,103.9 million, AK Housing
Capital Corporation Funds - $238.4 million, (an area of
disagreement between the legislature and the administration
in terms of general fund spending), Cruise Ship Tax - 39.2
million, (which is in section 4 of the capital budget
bill), AIDEA Dividends - $22 million, and AHFC Dividends -
62.5 million, (an area of agreement that it should be
listed under capital expenditures instead of fund
capitalization).
Co-Chair Hawker returned to the Cruise Ship Tax item. He
noted a future finance meeting dedicated to this topic. Ms.
Rehfeld agreed that would be helpful and added that there
were about $20 million in regional cruise ship impact
dollars not yet included in the budget. The gambling tax
revenue is also not included, which may better be
represented in the general fund column, she opined. OMB is
proposing that some of the gambling tax be spent in the
capital budget.
Ms. Rehfeld highlighted the larger pieces of the capital
budget on page 12 - federal highway, aviation, and water
projects, which total about $887.3 million including $88.6
million in matching general funds. There are energy
projects, including $50 million for the Renewable Energy
Grant Fund, $41 million to the AK Energy Authority, and
$7.2 million for the AK Housing Finance Corporation. There
is also $79.5 million for Gasline Projects, including $20
million for the AGIA reimbursement fund. She noted that
within both the capital and operating appropriations was a
separate section relating to gasline projects so they could
be easily identified.
Ms. Rehfeld explained that about $40.5 million was proposed
for major school maintenance projects.
Ms. Rehfeld related that the Permanent Fund component of
the budget represents about 19.5 percent of the total
budget. It amount to the expense for dividends and
inflation proofing. She thought the numbers would be
adjusted in the upcoming budgets.
2:53:09 PM
Co-Chair Hawker asked to what degree the adjustments would
be made. Ms. Rehfeld said the adjustments would be based on
the best information available.
Ms. Rehfeld reiterated that 60 percent of the $11.2 billion
total state budget goes to communities, schools, non-
profits, and individuals through grants and capital
spending. She termed it a significant investment in the
state.
Ms. Rehfeld turned attention to the "Fiscal 2010 Governor's
Budget Fiscal Summary" (copy on file). She voiced
appreciation for the organization of the document with the
four main categories of Agency Operating, Statewide,
Capital, and Savings providing consistency over time. She
noted only a few areas of difference between the
administration's and the legislature's view of the budget.
Ms. Rehfeld talked about meeting budget challenges - page
13. She stated that the state faces significant challenges
for the FY 09 and FY 10 budgets. The goal is to protect
Alaska's economy. She opined that the state has the tools
and the fiscal discipline to find savings and efficiencies
and to reduce the budget where practical and sustainable.
The hiring freeze is a management tool to help reduce
spending.
Ms. Rehfeld emphasized the prudent use of reserves in the
short term in order to provide long-term stability.
Co-Chair Hawker summarized that the state is looking at a
changed fiscal picture and the reality of $40 per barrel
oil.
Representative Kelly referred to page 2 and asked Ms.
Rehfeld how the state was doing as far as living within its
means. Ms. Rehfeld stated the state has done a good job and
has actually put some money into savings accounts. She
stressed keeping fiscal discipline in place and using some
of the reserves. The things to look at in the long range
would be future investments, using the reserves, and to
consider future revenue from the gasline.
Representative Kelly said he did not think the state was
managing its budget very well. He maintained that the state
has doubled the budget since 2005 and tripled it since
2000. He stressed that the state should be more frugal and
protect its economy, not the size of government.
Ms. Rehfeld summarized what has happened in the state since
2005. She mentioned the unfunded liability of the
retirement system, significant investments in education,
and investment in oil exploration. She agreed that state
government should look carefully state agencies and how
services are managed and delivered.
3:02:12 PM
JOHN BOUCHER, SENIOR ECONOMIST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, listed components of a
presentation entitled "FY 2010 10-year Plan" (copy on
file.)
Co-Chair Hawker offered that this is the first time this
project has taken place. It was authorized in law as HB 125
during the last legislative session. He termed it a "team
building year" with the goal to build consensus as much as
possible.
3:04:30 PM
Mr. Boucher explained page 2 of the handout, implementation
of schedule, the initial cycle of the ten-year plan
process. He said that early on in the process, the
implementation of the plan would have to walk hand-in-hand
with the regular budget process. It was presented as the
introduction of a process. A second iteration of the plan
was needed because of the need to connect it to regular
budget planning.
Mr. Boucher addressed page 3, the purpose of the plan. Its
main purpose is to start a dialogue about the future fiscal
health of Alaska. The process must engage both the
legislature and Alaskans.
3:06:26 PM
Mr. Boucher listed the imperatives of the plan on page 4.
There are three simple directives: balance the budget,
provide for essential state services, and protect Alaska's
economic stability.
Co-Chair Hawker explained that the mission statement of the
planning process is that every year a 10-year forward
projection of all the state's sources and uses of funds
must be brought before the legislature. It is a process
that meets the three criteria and that will reiterate every
year. Mr. Boucher agreed.
Mr. Boucher highlighted the goal of the FY 10 plan on page
5.One of the major challenges to Alaska is diversifying its
revenue base. The development of the natural gas pipeline
is the best opportunity to achieve that goal. The projected
date of achieving a natural gas pipeline is sometime
between 2018 and 2020. The current challenge is how to
bridge the revenue gap until then.
3:08:33 PM
Mr. Boucher listed the four principles of the plan as
depicted on page 6.
Mr. Boucher explained the plan guidance provided by OMB -
page 7. Agencies were provided an instruction memo in mid-
August and given latitude to develop projections based on
the stated goals of the administration and the plan. OMB
did not provide a target growth rate. It was not an
opportunity to develop a wish list.
Co-Chair Hawker asked about the risk of a tendency to not
bring forward mission critical infrastructure development.
Mr. Boucher said a process was encouraged whereby the
agencies could bring forth initiatives without
repercussion.
3:11:17 PM
Mr. Boucher described the consistent assumptions as shown
on page 8, as required by HB 125. If inflation was to be
included in the projection, it had to be documented and an
appropriate annual rate used. Projections were not to be
automatically adjusted for general inflation. The most
recent Department of Labor population growth projections
needed to be used, which averaged about 1 percent a year.
Considering both the inflation rate and population growth,
the growth rate was about 3.75 percent. If there were
population segments vital to specific programs, the
agencies were encouraged to use related data.
3:13:34 PM
Mr. Boucher reported on discreet agency projections - page
9. There were three: baseline, gasline, and initiatives.
He explained that baseline is also called a maintenance
budget - what it would cost to continue current services
for the next ten years. An exception to baseline
projections is a program projecting a non-GF fund source
decrease.
Mr. Boucher discussed wage and benefit driven increases,
which are not seen in individual departments, but rather
projected at a statewide level. The projection is for a
growth rate of approximately 3.25 percent. An area of the
plan that needs improvement is how to disaggregate those
increases back to the agencies.
Co-Chair Hawker noted there was no commitment on the part
of the administration or bargaining units. It is strictly
anticipating presumptive circumstances.
3:16:32 PM
Mr. Boucher explained the projected scenario regarding
costs associated with a gasline project and with
initiatives - projected costs associated with expanding the
service capacity of the agency beyond the FY 09 service
level. Co-Chair Hawker suggested having an A and B
category. An A category would be things to expand and B
would be things to expire. Mr. Boucher thought that
discussion would take place.
Mr. Boucher discussed the level of detail that the agencies
would provide - page 11. Department level projections were
provided in both operations and capital categories. If
there were formula programs, detailed projections were
shown.
3:19:00 PM
Mr. Boucher shared a sample projection - page 12. Co-Chair
Hawker noted the attempt to build consistency. He said
specimen documents would be made available, as well as a
graphic summary. Mr. Boucher agreed that graphs would be
provided.
3:21:07 PM
Mr. Boucher addressed significant improvements to the 10-
year planning process, yet to be accomplished - page 13. He
emphasized that these are not budget documents, but rather
projections. Co-Chair Hawker echoed that comment.
Mr. Boucher noted that planning and budgeting data are not
integrated. Statewide "sum of all agencies" is calculated
separately from the statewide model. Current models are not
holistic. They are focused on general funds. Co-Chair
Hawker summarized that the statewide total is figured
separately by OMB and is not the sum total of all the
agencies. He thought the comparison would be an interesting
reconciliation. Mr. Boucher said he does not yet have all
the information.
Mr. Boucher thought that there could be public involvement
in the future. Co-Chair Hawker reported that he has been
approached on that very topic and remains interested in the
idea of involving the public.
Mr. Boucher emphasized that the plan would change. He
shared the disclaimer on page 14.
3:26:56 PM
Mr. Boucher summarized the 10-year forecast - page 15.
There would be healthy growth of 3 percent through 2019
according to the fall 2008 forecast. The change in the
revenue forecast will change that picture. Co-Chair Hawker
noted that price and production were important variables.
Mr. Boucher said that the prices were based on the
department's official forecast.
3:29:20 PM
Mr. Boucher shared the OMB web site for more information.
Co-Chair Hawker noted that subcommittees would focus on the
FY 10 budget. Long-term planning will be part of the
conversation as agencies come before the committee. He
emphasized the need for collaboration in order to move the
plan forward.
Ms. Rehfeld offered to help out when possible.
ADJOURNMENT
The meeting was adjourned at 3:31 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| FY10All Funds pie chart.pdf.pdf |
HFIN 1/26/2009 1:30:00 PM |
|
| FY2010 Fiscal Summary.pdf.pdf |
HFIN 1/26/2009 1:30:00 PM |
|
| OMB Budget Overview 01.26.pdf |
HFIN 1/26/2009 1:30:00 PM |
|
| OMB Fiscal Plan overview 2009.01.26.pdf |
HFIN 1/26/2009 1:30:00 PM |
|
| OMB 20609 $20 Mill Savings with Enclosures.pdf |
HFIN 1/26/2009 1:30:00 PM SFIN 2/4/2009 9:00:00 AM |