Legislature(2013 - 2014)HOUSE FINANCE 519
01/21/2013 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Fy14 Governor's Budget Overview: Department of Revenue | |
| Fy14 Governor's Budget Overview: Alaska Court System | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
January 21, 2013
1:31 p.m.
1:31:24 PM
CALL TO ORDER
Co-Chair Austerman called the House Finance Committee
meeting to order at 1:31 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mark Neuman, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative Lindsey Holmes
Representative Scott Kawasaki, Alternate
Representative Cathy Munoz
Representative Steve Thompson
Representative Tammie Wilson
MEMBERS ABSENT
Representative David Guttenberg
ALSO PRESENT
Bryan Butcher, Commissioner, Department Of Revenue; Daniel
R. Fauske, Chief Executive Officer and Executive Director,
Alaska Housing Finance Corporation (AHFC), Department of
Revenue; Doug Wooliver, Deputy Administrative Director,
Alaska Court System; Rhonda McLeod, Chief Financial
Officer, Alaska Court System; Jerry Burnett, Legislative
Liaison and Director, Division of Administrative Services,
Department of Revenue
SUMMARY
FY14 GOVERNOR'S BUDGET OVERVIEW: DEPARTMENT OF REVENUE,
ALASKA COURT SYSTEM
^FY14 GOVERNOR'S BUDGET OVERVIEW: DEPARTMENT OF REVENUE
1:33:22 PM
BRYAN BUTCHER, COMMISSIONER, DEPARTMENT OF REVENUE, (DOR)
introduced himself. He discussed the PowerPoint
Presentation, "Alaska Department of Revenue, Budget
Overview, House Finance Committee: Monday, January 21,
2013" (copy on file).
Commissioner Butcher shared slide 2, "Alaska Department of
Revenue. The mission of the Department of Revenue is to
collect, distribute and invest funds for public purposes."
He stressed that there had been recent discussions with the
governor regarding greater fiscal restraint. He relayed
that there were discussions about the price of oil and how
it affects the State's revenue. He stressed that there
would be a more constrained budget than in previous years.
He pointed out that because of the progressivity aspect of
the tax structure, the amount of revenue drops at a
disproportionately large percentage compared to the
percentage decrease of oil price or production. A drop down
to $90 a barrel of oil would have an impact of billions of
dollars in State revenue. He shared the major programs of
DOR:
Tax Division: Enforces the tax laws of the state;
collects and accounts for tax revenues
Treasury Division: Manages and invests state funds
Permanent Fund Dividend Division: Administers the PFD
program and distributes the annual dividend payment to
eligible Alaskans
Child Support Services Division: Collects and
distributes child support to custodial parents
Commissioner Butcher shared slide 3, "Results in FY 2012."
Permanent Fund Dividend Division: Of the 144,056
eligibility cases opened in 2011, 88 percent were
reviewed by September 15 and either closed, resolved,
or awaiting information from the applicant.
Representative Gara wondered if there was criminal action
that would take place related to unpaid child support.
Commissioner Butcher replied that it would be a criminal
offence if child support was not paid. He furthered that
there was currently an examination of a possible "better
way" to collect child support.
Representative Gara recommended "deferred prosecution" for
individuals who were calcified child support offenders. A
deferred prosecution would not always result in a
prosecution, but merely prompt the back child support to be
paid. Commissioner Butcher agreed to examine that
proposition, and agreed to participate in discussions
regarding deferred prosecution.
Commissioner Butcher shared that Child Support Services
collected $118.6 million, a 4 percent increase over last
year. Of this, $105.8 million was disbursed to custodial
parents and children.
1:39:57 PM
Co-Chair Stoltze wondered what happened to the other $12.8
million.
JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF REVENUE, replied that the "other"
money went to the federal government and the State of
Alaska to repay welfare cases. That other money was
formerly referred to as Child Support Receipts, which was
used for the State match. Currently, it was not separately
identified in the budget.
Commissioner Butcher continued with slide 3:
The federally required self-assessment review showed
that CSSD exceeded all federal requirements for the
child support program.
CSSD increased its teenage outreach program by
visiting 44 schools throughout the state.
Co-Chair Stoltze made a joke by asking if DOR was attending
Personal Accountability classes or Health classes. Mr.
Burnett replied that he was not sure, but agreed to provide
further information.
Co-Chair Stoltze expressed concern regarding government
programs and the ramifications for individuals
participating in those programs.
Commissioner Butcher completed discussing slide 3:
Tax Division: 96 percent of known taxpayers filed tax
returns and made their payments timely.
Representative Gara wondered how many "C corporations" paid
taxes in the state. Commissioner Butcher agreed to provide
that information.
1:43:02 PM
Commissioner Butcher looked at slide 4, "Results."
On January 15th, the State sold $162 million of
General Obligation bonds.
The State received more than $600 million in orders
and achieved a true interest cost of 1.42 percent.
The bonds were the first to be issued by the State
under its new AAA/Aaa/AAA rating.
Co-Chair Austerman wondered if the General Obligation (GO)
bonds were from FY 10. Commissioner Butcher replied that
the GO bonds were the last half of the voter-approved bonds
in the 2010 general election. He stated that bonds would be
sold at the beginning of March 2013, for the first half of
the transportation projects that were approved in the 2012
election.
Co-Chair Austerman wondered if there were other bonds from
2010, 2011, or 2012 that were not yet available for
transportation projects. Mr. Burnett replied that the GO
bonds that were outstanding were from 2012.
Commissioner Butcher continued to discuss slide 4.
Fitch -
The state has used recent windfalls from high oil
prices to repay past (CBR) draws and remains committed
to maintaining sizable reserves, a key rating factor
given forecasted declines in oil production over time.
Moody's -
A conservative approach to forecasting oil
revenues with respect to assumptions for both price
and production has long been a key element of Alaska's
credit profile.
Expectations that the state will continue to provide
conservative forecasts support the Aaa rating.
The outlook for Alaska is stable, based on
expectations the state will continue to make
conservative oil revenue forecasts and plan for the
eventual depletion of its oil resources, and that its
large budgetary reserves will allow it to withstand
short-term production disruptions.
Standard and Poors (S&P) -
Considering the importance of oil-related
revenues to the state's budget, its forecasts of both
oil prices and production are crucial to its fiscal
condition.
The state's Department of Revenue (DOR) has a good
track record forecasting year-ahead prices and
production levels.
A bigger issue for the state is measuring the long
term rate of oil production decline.
The state has built up substantial reserves to provide
essential services in the event of a future revenue
downturn, while hedging against declines in North
Slope oil production and fluctuations in oil prices.
Vice-Chair Neuman shared that he had a discussion regarding
bond ratings with the director of the Legislative Finance
Division (LFD) about the capacity of the State if it was in
a deficit. He observed that the State was currently in
deficit spending in the operating budget. He wondered how
the lending agencies would evaluate the State's bond
ratings. Commissioner Butcher replied that the evaluation
was based on many pieces of a complex puzzle. He commented
that the State's recent history of surplus spending
reflected positively in its evaluation. Deficit spending
would be negative, but he did not feel that it would result
in a direct downgrade. The lending agencies examine the
activity with the economy of the state and its ample
reserves.
Vice-Chair Neuman recommended further information regarding
deficit spending. He remarked that Alaska needed to remain
competitive in the oil market. He felt that there would be
more oil available in the United States. Alaska needed to
maintain or drop the price of crude oil, because of supply
and demand in the market.
1:49:48 PM
Commissioner Butcher discussed slide 5,"Tax Revenue
Management System (TRMS)."
$34.7 million was appropriated in 2011.
A 3rd party project manager was brought on board in
the summer of 2011 to assist with the RFP and
contractor selection.
An RFP was issued in the fall of 2012.
Fast Enterprises' GenTax product was selected in
December of 2012.
DOR will be implementing a Commercial OfftheShelf
(COTS) system.
The phased implementation of the DOR Tax Division's 22
tax systems will begin in March of 2013.
There is a 3 year timeline for full implementation.
Co-Chair Austerman wondered if the tax filers would file
electronically. Commissioner Butcher replied in the
affirmative. He furthered that there would be the
opportunity for detailed information on the taxpayer,
accessible by DOR.
Commissioner Butcher looked at slide 6, "Authorities and
Corporations."
Alaska Housing Finance Corporation: To provide
Alaskans access to safe, quality and affordable
housing.
Alaska Permanent Fund Corporation: To maximize the
value of the Permanent Fund within return objectives.
Alaska Mental Health Trust Authority: To administer
the Alaska Mental Health Trust as a perpetual trust
and to ensure a comprehensive and integrated mental
health program to improve the lives of beneficiaries.
Alaska Municipal Bond Bank Authority: To provide
municipalities with financing options for capital
projects.
Commissioner Butcher shared slide 7, "7-Year Look Back at
Department Activities."
Revenues collected by the Tax Division increased 268
percent:
FY05 $1,951,247,500
FY12 $7,173,800,000
Funds under management by the Treasury Division
increased 128 percent:
12/31/2004 $20,448,418,000
12/31/2012 $46,598,422,000
Number of Permanent Fund Dividends paid to Alaskans
increased 7 percent:
FY05 599,243
FY13 641,697 (total estimated for 2012 dividend)
Number of child support cases increased 4 percent
while the amount of child support distributed to
custodial parents increased 21 percent:
FFY05 45,259 cases $98.6 million disbursed
FFY12 47,044 cases $118.6 million disbursed
Commissioner Butcher looked at slide 8, "Growth in State
Funds 2005-2012 CBRF and GeFonsi." He explained that the
red line displayed the totals in the Constitutional Budget
Reserves (CBR) from 2004 to 2011. He noted that the CBR had
grown considerably over the three years prior. The blue
line represented the General Fund and other non-segregated
investments (GeFonsi), which was at nearly the same level
as the CBR. The shaded blue area represented the
combination of the two funds, which was currently slightly
above $20 billion.
1:54:53 PM
Representative Gara observed that the graph showed a
current savings of under $20 billion, but the graph was
outdated. There was actually slightly more than $20 billion
in savings. Commissioner Butcher responded in the
affirmative. He shared that there was approximately $25
billion currently in the savings accounts.
Representative Gara shared that he had assumed that there
was currently $17 billion in the savings accounts. Mr.
Burnett clarified that the graph also included the
investments.
Co-Chair Austerman requested a list of the different
investments. Mr. Burnett stated that there were over 100
funds in GeFonsi that were invested.
Commissioner Butcher shared that there would be a separate
presentation about the different investments.
Representative Gara surmised that there was approximately
$17 billion as actual savings in different accounts.
Commissioner Butcher responded in the affirmative.
Commissioner Butcher discussed slide 9, "Department of
Revenue Share Total Agency Operations." He noted that the
share was currently less than 1 percent, with the exception
of FY 11, because of the Alaska Gasline Development
Corporation (AGDC) startup put into the operating budget.
Commissioner Butcher shared slide 10, "Department of
Revenue, Percent of the Total Department's Budget by Fund
Group." He explained that the graph displayed a breakdown
and a bar chart of the percent of the total department's
budget by fund group. He looked at the magenta-colored area
of the graph, which represented other state funds from
independent agencies within DOR. He pointed out the purple
area, which displayed the federal receipts. The yellow and
light blue areas represented the general funds.
Co-Chair Austerman requested a more detailed outline of the
individual fund sources in the magenta-colored zone of the
chart. Commissioner Butcher agreed to provide that
information.
Commissioner Butcher looked at slide 11, "Department of
Revenue FY 2014 Governor's Budget by Fund Source." He
explained that the Permanent Fund and corporate receipts
occupied 36 percent; federal funds occupied 23 percent;
ARMB pension funds occupied 13 percent; AHFC corporate
receipts occupied 11 percent; general funds (UGF) occupied
9 percent; designated general funds (DGF) occupied 3
percent; and other funds were 5 percent.
1:59:20 PM
Co-Chair Austerman wondered if the red bar on page 10 could
related to the pie chart on page 11. Mr. Burnett replied in
the affirmative, and furthered that the red bar on page 10
included everything displayed on page 11, except for the
general and federal funds.
In a response to a question from Co-Chair Austerman,
Commissioner Butcher stated that the red bar, on page 10,
was meant to represent a big picture scenario. He
acknowledged that perhaps that was a mistake.
Commissioner Butcher discussed slide 12, "Department of
Revenue FY 2014 Governor's Budget by Program." He explained
that the graph displayed a breakdown of different divisions
and agencies: The Alaska Permanent Fund Corporation,
$126.312 million; Alaska Housing Finance Corporation,
$97.037 million; Alaska Retirement Management, $52.136
million; Child Support Services Division, $28.363 million;
Tax Division, $16.768 million; Treasury Division, $10.323
million; Permanent Fund Dividend Division, $8.378 million;
Administration and Support, $5.298 million; Alaska Mental
Health Trust Authority, $4.203 million; and Alaska
Municipal Bond Bank Authority, $838.8 thousand.
Representative Gara wondered if the requests for the
Permanent Fund and the Arm Board were for the costs of
staffing to run the contracts. Mr. Burnett responded that
approximately $114 million of the $126 million in the
Permanent Fund appropriation was for external management
fees. The Arm Board had over $40 million for external
management fees. He declared that the largest portion of
the DOR budget was external management fees.
Representative Gara wondered if DOR had ever examined
possible savings in managing the funds. Commissioner
Butcher replied that DOR continually examined the
possibility of savings. He furthered that the Permanent
Fund Corporation could more information about their
internal savings. The Arm Board's passive and active
management would be addressed at a meeting at a later date.
2:05:15 PM
Commissioner Butcher shared slide 13, "Key FY 14 Budget
Changes."
Film Office Executive Director: $148,000 GF, New
responsibility in Department of Revenue
Oil and Gas Audit: $372,000 GF, Two new positions
Long Term Care Ombudsman: $107,000 GF/MH, New
assistant ombudsman for increasing case load
AHFC New Mortgage Marketing Plan: $680,000 AHFC
Receipts, New Marketing effort to increase AHFC market
share
Representative Thompson surmised that three positions had
been added to the Department of Commerce, Community and
Economic Development DCCED, including the Film Office
Executive Director. Mr. Burnett replied in the affirmative.
He stated that because of the structure of the bill, there
would be a commission established to determine the film
credit distribution.
Representative Thompson wondered if DOR had not tracked
past film taxes. Mr. Burnett replied that DOR had audited
the tax credit after DCCED had completed the preliminary
work. The additional work would be the marketing work.
2:11:00 PM
Representative Munoz remarked that the Department of
Administration had added a retiree advocate for long term
care issues, so she wondered what the Long-term Ombudsman
position would be concerning. Mr. Burnett replied that the
position was required under federal statute to reside in
the senior assisted living centers.
Vice-Chair Neuman noted that there would be an increase of
over $1 million by adding the new positions displayed in
slide 13. He wondered if there was a way to determine
efficiencies in dollar form. Commissioner Butcher replied
that he did not know the exact figure related to the value
of additional auditors, but that he could provide further
information.
Vice-Chair Neuman stressed that the state employment would
be subject to step increases and retirement benefits.
Although there were front-end costs, long-term costs would
be considerably higher. Commissioner Butcher understood
Vice-Chair Neuman's concerns. He furthered that in recent
years, there had been almost no requests for new positions.
He stressed that the Film Office Director position was a
result of changing of department responsibilities.
Representative Gara wondered why a position was needed for
someone to just read film scripts. He wondered why that
task could not be performed by someone at a lower level,
like an intern. Commissioner Butcher replied that four
commissioners had been tasked to examine and make approvals
on appropriate project to be eligible for state credits.
The position of the Film Office Executive Director would be
to run that commission.
Representative Costello wondered how AHFC coordinated their
marketing efforts.
2:16:33 PM
DANIEL R. FAUSKE, CHIEF EXECUTIVE OFFICER AND EXECUTIVE
DIRECTOR, ALASKA HOUSING FINANCE CORPORATION (AHFC),
DEPARTMENT OF REVENUE, explained that one of the goals of
AHFC was to focus on a first-time homeowner benefit. He
stated that money was needed to market the new program,
because there was intense competition on interest rates in
the market.
2:18:35 PM
Representative Thompson wondered if the requested money
would be in competition with private in-state banks. Mr.
Fauske replied in the negative. He stated that the
mortgages would be sold, and managed by a private firm.
Mr. Burnett presented slide 14, "FY 14 Capital." (in
thousands)
PFD Division System Software Conversion: 1,500.0 PFD
Fund
PFD Division Computer Replacement: $130.0 PFD Fund
Child Support Computer Replacement: $143.9 Fed/74.1 GF
Permanent Fund Corp NetApp Filer: $55.0 PF earnings
Alaska Housing Finance Corp Multiple Projects:
$88,200.0 GF, $850.0 Other, $13,800.0 Fed
$31.5 million: Weatherization
$20 million: Home Energy Rebate
$8 million: Homeless Assistance Program
$7 million: Supplemental Housing Development
Program
$6 million: Teacher, Health, Public Safety and
VPSO Housing Loans
$4.5 million: Senior Citizen Housing Development
Representative Thompson wondered if the backup would be in
millions of dollars. Mr. Burnett replied that it would be
in thousand dollars. He stressed that most child support
programs were federally matched 66 percent federal, and 34
percent state, whether capital or operating funds.
Representative Thompson surmised that the PFD computer
replacements request was estimated at $130,000. Mr. Burnett
responded that there were 81 employees in the PFD Division,
and 227 in the Child Support Division.
2:24:49 PM
Representative Edgmon queried some commentary on the AHFC
rebate programs, specifically the Weatherization program.
He stressed that the rebate programs saved individuals
great amounts of money. He specifically wondered if money
was appropriated to the programs, could that money be
utilized. Mr. Fauske replied that there would be a
presentation on the statistical data regarding the savings
that have resulted from the program. He estimated that
approximately 4,000 jobs had been created as a result of
the rebate program, and that the ideal situation for budget
requests would be applied to multiple years. He stressed
that marketing would help the program, because people may
not be aware that the programs still exist. He announced
that the request was for one year of marketing.
2:30:19 PM
Representative Edgmon was grateful for the explanation of
the rebate programs and their benefits.
Representative Gara requested information regarding what
programs were available for individual communities. He felt
that legislators could include that information in their
newsletters to supplement marketing. Mr. Fauske agreed to
provide that information.
Mr. Burnett looked at slides 15 and 16, "Department of
Revenue Ten Year Expenditure Projection."
The mission of the Department of Revenue is to
collect, distribute and invest funds for public
purposes. The department achieves its mission
through the efforts of four core agencies, two
corporate agencies, and four boards and authorities.
The following document provides an estimate of the
department's budget changes over the next ten years.
Projecting budgets ten years into the future for the
various programs and funding sources of the Department
of Revenue is a challenge. Changes to the department's
programs are not anticipated but are sometimes
affected by legislative action. As a result, the
assumptions and numbers that make up the plan will
continue to change as new information becomes
available.
Baseline Scenario Assumptions for DOR:
The department's operations costs were increased by
using a 2.5 percent annual inflation factor. The
inflation calculation does not include personal
services or investment management fees.
External custody and investment management fees were
calculated using anticipated rates applied to
estimated future market values.
Baseline Scenario Assumptions for AHFC:
Alaska Housing Finance Corporation's (AHFC) operations
costs were increased by using a 2.5 percent annual
inflation factor. The inflation calculation does not
include personal services or investment management
fees.
The Capital budget assumes that the Corporation's
earnings will resume to pre-recession levels.
The Weatherization program assumes the State will
contribute $100 million annually to maintain the
current program.
Baseline Scenario Assumptions for APFC:
The Alaska Permanent Fund (APF) value was grown using
median capital market expectations.
External investment manager fees were calculated using
the projected value of the assets under management
multiplied by the projected cost of 24 bps.
Alaska Permanent Fund Corporation's (APFC) operations
costs were grown by 2.5 percent (inflation). APFC
operations costs (personal services, travel,
contractual services, commodities, and equipment) are
correlated to the growth of the Fund's investment
holdings.
2:33:59 PM
Mr. Burnett shared slide 17, "10 Year Projection Graphs."
He explained that the capital projection shows a spike, and
that is because Alaska Gasline Development Corporation
(AGDC) received its capitalization. The department growth
was fairly low based on DOR's projections and methodology.
The majority of the department's budget was comprised of
external investment management fees.
Mr. Burnett discussed slide 18, "10 Year Projection
Graphs." He remarked that the graph was drafted by LFD, and
showed a slightly higher slope than the previous graphs.
That slope assumed increases based on immediately prior
rates of growth, with a 6.1 percent annual growth.
Co-Chair Austerman wondered if DOR was now anticipating a 1
or 2 percent growth rate. Mr. Burnett replied in the
affirmative, and furthered that DOR did not include the
personal services costs. The personal services costs were
included in a state-wide scenario, so the DOR projection
graphs would not show future contract costs for personal
services.
Vice-Chair Neuman wondered what divisions within DOR would
be most affected by the lower projections.
2:38:02 PM
Co-Chair Austerman wondered if the charts would look
different if there was only a three or five year
projection. Mr. Burnett replied that the charts would not
look much different than what was displayed. He reiterated
that the chart did not include personal services increases,
and stressed that personal services fees were a significant
cost to DOR.
Vice-Chair Neuman wondered if the personal services cost
increase would be applied to all divisions. Commissioner
Butcher replied that the increase would only include one-
third of the divisions, and specifically mentioned that the
Treasury and Tax Divisions were primarily General Funds.
Commissioner Butcher discussed slide 20, "Wrap-Up."
The Tax Division is actively engaged in improving its
information system to insure efficient tax
administration and timely access to information
necessary for assisting with tax policy decisions
contemplated by the legislature.
The Department of Revenue is the state's largest
investment manager. We pride ourselves in prudent
investment practices for a variety of programs and
needs while achieving and maintaining the highest
credit rating and thus the lowest cost of borrowing.
Customer service sections in the PFD and Child Support
Services Divisions have continuously improved their
business practices in order to provide increased
service levels without increasing staff.
Our corporations receive national recognition for
their exemplary program management and fiscal
solvency.
Co-Chair Austerman handed the gavel over to Co-Chair
Stoltze.
2:42:17 PM
^FY14 GOVERNOR'S BUDGET OVERVIEW: ALASKA COURT SYSTEM
DOUG WOOLIVER, DEPUTY ADMINISTRATIVE DIRECTOR, ALASKA COURT
SYSTEM, discussed the PowerPoint Presentation, "Alaska
Court System" (copy on file). He shared the mission
statement of the Alaska Court System:
The mission of the Alaska Court System is to provide
an accessible and impartial forum for the just
resolution of all cases that come before it, and to
decide such cases in accordance with the law,
expeditiously and with integrity.
Mr. Wooliver looked at slide 2, "Distinguishing
Characteristics of the Alaska Court System."
State Funded - No County or Municipal Courts
Unified Judiciary
Administrative Director Position Established in the
Constitution
Co-Chair Stoltze asked why the Alaska Court System (COURT)
did not frequently present to the committee. Mr. Wooliver
responded that judges were hired to resolve cases, and were
not hired in administrative capacities. The Court System
did not "weigh in" on legislative issues, because it would
undermine the objectivity of the court.
Co-Chair Stoltze wondered why COURT did not testify during
budget hearings. Mr. Wooliver replied that judges were
hired to resolve cases, so the administrative staff of the
COURT drafts the budget for the Supreme Court's approval.
2:47:30 PM
Representative Thompson wondered what the required
retirement age for judges in Alaska. Mr. Wooliver replied
that the required retirement age for judges in Alaska was
70-years-old.
Representative Thompson stated that some states had risen
the retirement age to 75-years-old. He wondered if changing
the retirement age would be an advantage to the State,
because some retirement judges were returning to work on
contract. Mr. Wooliver did not know the COURT's view on
that issue. He stated that some individual judges came back
on contract for assignments, but it was on a case by case
basis, and was relatively inexpensive for the State.
Co-Chair Stoltze remarked that the downside of not reaching
70-years-old was "pretty harsh."
Representative Gara shared that he worked for a judge that
had wondered about the constitutionality of a required
retirement age.
Mr. Wooliver discussed slide 3, "Distinguishing
Characteristics of Alaska Court System vs. Other State
Entities."
No Discretionary Functions
Reactive in Nature
Must Accept Work Initiated by Others
Mr. Wooliver shared slide 4, "Factors Impacting Workloads."
Population
Police
Economy
Statutory Changes
Other
Co-Chair Stoltze remarked that the criminal justice bills
that passed the legislature had very robust COURT fiscal
notes and were always fully funded. Mr. Wooliver agreed.
2:53:53 PM
Mr. Wooliver discussed slide 5, "Caseloads - FY11 vs.
FY12."
150,956 New Cases Filed in FY12
Nearly Two-Thirds of All Cases Originated in the
Anchorage/Palmer/Kenai Courts
No significant change in Superior Court Caseload;
District Court Caseloads are down 9 percent
Probate Cases up 4 percent
Domestic Violence Cases up 10 percent
Mr. Wooliver looked at slide 6, "Court System Employees."
About 800 Permanent (GF-Funded)
Primarily Clerical Employees
Five Supreme Court Justices
Three Court of Appeal Judges
42 Superior Court Judges
23 District Court Judges
44 Magistrates
Mr. Wooliver discussed slide 7, "FY13 State of Alaska
Funding - All Sources."
Executive Branch (excludes debt service and special
appropriations) - 86.4 percent
University of Alaska - 11.3 percent
Alaska Court System - 1.4 percent
Legislature - .9 percent
Mr. Wooliver looked at slide 8, "Breakdown of FY13 Funding
(GF)."
Personal Services Costs - 77.1 percent
Travel Costs - 1.3 percent
Services - 18.4 percent
Supplies/Commodities - 2.9 percent
Capital Outlay - .3 percent
Mr. Wooliver looked at slide 9, "Increments Funded in
FY13."
No Dark Courtrooms - Six Clerical Positions
Geographic Differential for Non-Judicial Employees
Maintenance Costs for Leases, Utilities, Security
Screening and Software
Co-Chair Stoltze handed the gavel to Co-Chair Austerman.
Representative Costello wondered if the wondered if the
geographic differential for non-judicial employees referred
to a percentage of their salary, or if it was a lump sum.
Mr. Wooliver replied that it would be a percentage of their
salary based on the established rate for the community.
Mr. Wooliver discussed slides 10 through 12, "FY14 Funding
Requested."
Bethel Americans with Disabilities Act Accommodation -
$456,800
Representative Gara wondered if there was a consideration
to disallow the cost-differential factoring (high three
rule) into the retirement payments. Mr. Wooliver deferred
to Ms. McLeod.
2:59:03 PM
RHONDA MCLEOD, CHIEF FINANCIAL OFFICER, ALASKA COURT
SYSTEM, replied that the tier 1 employees in PERS and TRS
were most impacted by the high three average rate. She
stressed that there were very few tier 1 employees.
Representative Gara wondered if tier 2 employees had a high
3 rule. Ms. McLeod understood that tier 2 employees had a
high 5 rule. Mr. Wooliver agreed to provide more
information.
Representative Gara shared that there was no ordinary small
claims court in Alaska. He wondered if the COURT had
considered establishing a small claims court, performed by
lower cost magistrates to avoid the high costs in district
courts. Mr. Wooliver replied that individuals had a right
to a jury trial in district court, but no right to a jury
trial in small claims court.
Mr. Wooliver continued to discuss the FY14 funding
requests.
Bethel Americans with Disabilities Act Accommodation -
$456,800
Co-Chair Stoltze wondered if prospective jurors were asked
about ocular impairment. Mr. Wooliver under the Americans
with Disabilities Act (ADA) and COURT rules, jurors were
not required to hear. So, when that question is asked, it
is only in order to provide accommodation.
3:04:26 PM
Mr. Wooliver continued to discuss the FY14 funding
requests.
Wide Area Network Bandwidth Expansion - $691,700
GF/MH Mental Health Trust Authority Recommended
Projects - $1,165,000
Replace Federal Pass-Through Funding
Representative Costello wondered if there could be a budget
tracking code. She specifically wondered what requests were
in place, which were drafted as a response to the loss of
federal funds. She stressed that she would like to examine
this issue, because she wanted to determine the value of
each program in the COURT system.
Co-Chair Stoltze felt that Representative Costello's
concerns were valid.
Mr. Wooliver continued to discuss the FY14 funding
requests.
$691,300 is requested for:
Utilities and Operating Leases
New Leases - Craig and Sand Point
Contractual Services Increases
Six New Positions - $651,100
Magistrate Performance Analyst
Programmer/Analyst
Security Analyst
Contracts and Leasing Manager
Senior Accounting Clerk
Records Technician
3:09:27 PM
Representative Gara wondered why a magistrate performance
analyst was needed to analyze the performance of
magistrates that were analyzed by judges. Mr. Wooliver
replied that there was a "training judge" that was assigned
to each magistrate. The magistrate hired positions on their
own.
Representative Gara surmised that the magistrates worked
for the judge, so the judges were able to best analyze the
magistrate's work. He wondered why the judges were not
analyzing those magistrates. Mr. Wooliver replied that some
analysis was performed in-house. He stressed that the
magistrates could use more training that what was currently
offered.
Mr. Wooliver continued to discuss the FY14 funding
requests.
Projects Targeted at Alcohol Abuse - $90,000
Operators without Licenses (OWL) Program
Fairbanks 24/7 Sobriety Pilot Program
Co-Chair Stoltze shared a story about a person who had
their license suspended until 2095, and wondered if that
was an atypical case of a suspension. Mr. Wooliver replied
that there were many people who had their license suspended
such that they could never get their license returned.
Representative Wilson requested information regarding on
the Operators Without License program. Mr. Wooliver agreed
to provide that information.
3:14:25 PM
Representative Thompson queried the results of 24/7
Sobriety pilot program. Mr. Wooliver replied that the
program did not work well in Anchorage. He furthered that
the program focused on people who were most likely to lose
custody of their children, because of their substance abuse
problems. The program did not focus on Driving Under the
Influence (DUI) offenders.
Mr. Wooliver continued to discuss the FY14 funding
requests.
Computer Replacement Funding - $175,000
Increase base funding to $600,000
Software Support - $114,900
Interpreter and Translation Services - $25,000
Mr. Wooliver discussed slides 13 and 14, "Funding Changes
FY05 to FY14."
Personal Services:
Salary Adjustments
New Judges - Eight Superior Court and Three
District Court
No Dark Courtrooms Initiative
Services:
Leased Facility Expenses including Public
Building Fund Participation
Utility and Maintenance Costs
Software Support Costs
Therapeutic Courts
Mr. Wooliver looked at slide 15, "Alaska Court System's
Share of Total Agency Operations." He stated that the graph
displayed the percentage of the cost of State government,
with the COURT averaging from 2 percent to .2 percent of
the total general fund spending.
Mr. Wooliver discussed slide 16, "Alaska Court System,
Percent of the Total Agency's Budget by Fund Group." He
explained that COURT was almost completely funded by the
general fund. He added that there were some Mental Health
Trust Authority receipts and other State funds.
Co-Chair Stoltze wondered if the COURT benefited from
forfeiture and seizures. Mr. Wooliver replied that the
COURT did not benefit form forfeiture and seizures.
Mr. Wooliver displayed slide 17, "Funding Changes FY05 to
FY14." The allocation of increased general fund was 44
percent for salary adjustments; 31 percent for increments;
10 percent for therapeutic courts; 10 percent for
maintenance; and 5 percent for no dark courtrooms.
3:20:37 PM
Mr. Wooliver looked at slides 18 through 21, " FY15 and
Beyond."
Respond to Work Initiated by Others
Makes Planning for the Next Ten Years Very
Difficult
Electronic Document Management (E-Filing) Project
Impact to All Justice Agencies
Improve Public Access to Data and Case
Information Facilitate Data Exchanges Between
Justice Agencies Improve Case Processing
Efficiencies
Co-Chair Stoltze felt that the statement on slide 18 was an
inverse statement.
Mr. Wooliver continued to discuss "FY15 and Beyond."
In the Near Term, New Superior Court Judges may be
Needed for Juneau, Bethel, and Palmer Courts
In the Long Term, New Judges may be Needed Due to
Population Changes in Southcentral Alaska
Vice-Chair Neuman wondered if electronic filing was
available for paying a traffic ticket on site. Mr. Wooliver
replied that the electronic filing for paying a traffic
ticket was something that COURT hoped would be available in
the future.
Mr. Wooliver continued to discuss "FY15 and Beyond."
Improvement of Justice Facilities in Kotzebue, Bethel,
and Nome and Additional Space in Palmer
Videoconferencing and Bandwidth Expansion
Reduce costs associated with transporting
defendants to court proceedings
Mr. Wooliver discussed slide 22, "Alaska Court System,
Continued Budget Growth Compare to 10-year Plan." If the
last several years' growth was applied to the future, the
green line hike would occur. The black dotted line
represented the current plan.
3:27:52 PM
Mr. Wooliver looked at slide 23, "Alaska Court System,
Continued Budget Growth Compared to 10-Year Plan." This
slide was similar to slide 22, but with all funding sources
considered.
Co-Chair Austerman discussed housekeeping.
Co-Chair Stoltze also discussed housekeeping.
Representative Gara commented that it was often cheaper for
the State to utilize in-house employees, rather than hiring
outside managers.
Vice-Chair Neuman pointed out that DOR had not offered a
plan to implement spending controls. He felt that
information was necessary from the departments.
Representative Costello felt that there were also some ways
to control the costs, which included hiring outside
managers. She stressed that State employees versus
contracted employees issues were based on circumstance.
ADJOURNMENT
3:32:32 PM
The meeting was adjourned at 3:32 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Revenue HFIN Overview 1-21-13 final.pdf |
HFIN 1/21/2013 1:30:00 PM |
Revenue Overview Final |
| Court System HFIN Overview 1 21 13 v 2.pdf |
HFIN 1/21/2013 1:30:00 PM |
Court System Overview Final |
| Court System Overviw Response.pdf |
HFIN 1/21/2013 1:30:00 PM |
Courts Overview Response |
| DOR AHFC HFC Overview Response1-21.pdf |
HFIN 1/21/2013 1:30:00 PM |
AHFC/DOR Overview Response |
| Court System Overviw Response.pdf |
HFIN 1/21/2013 1:30:00 PM |
Corts System Overview Response |