Legislature(2019 - 2020)ADAMS ROOM 519
04/04/2019 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB39 || HB40 | |
| Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 39 | TELECONFERENCED | |
| += | HB 40 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 4, 2019
9:22 a.m.
9:22:55 AM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 9:22 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Tammie Wilson, Co-Chair
Representative Jennifer Johnston, Vice-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Andy Josephson
Representative Gary Knopp
Representative Bart LeBon
Representative Kelly Merrick
Representative Colleen Sullivan-Leonard
Representative Cathy Tilton
MEMBERS ABSENT
None
ALSO PRESENT
Representative Lance Pruitt; Representative Louise Stutes;
Representative Bryce Edgmon, Representative Grier Hopkins;
Representative Matt Claman; Representative Adam Wool;
Representative Sarah Rasmussen.
SUMMARY
HB 39 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 39 was HEARD and HELD in committee for further
consideration.
HB 40 APPROP: MENTAL HEALTH BUDGET
HB 40 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 39
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making appropriations under art. IX,
sec. 17(c), Constitution of the State of Alaska, from
the constitutional budget reserve fund; and providing
for an effective date."
HOUSE BILL NO. 40
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program, including
supplemental appropriations; and providing for an
effective date."
9:23:46 AM
Co-Chair Foster relayed the committee was currently
addressing the numbers section of amendments [note:
language section and additional numbers section amendments
were considered during the April 3, 2019, 9:30 a.m. meeting
-see separate minutes for detail].
^AMENDMENTS
9:24:23 AM
Representative Carpenter MOVED to ADOPT Amendment H DOE 4
(copy on file):
Early Learning Coordination
Best Beginnings, and Pre-K Grants
H DOE 4 - Eliminate Parents as Teachers, Best
Beginnings, and Pre-K Grants
This would eliminate all funding for Parents as
Teachers, Best Beginnings, and Pre-K Grants.
1004 Gen Fund {UGF) -2.231.7
Vice-Chair Ortiz OBJECTED.
Representative Carpenter reviewed the amendment that would
eliminate the Parents As Teachers, Best Beginnings, and
Pre-K grants for a total of $2.2 million. He detailed that
Parents As Teachers was about $711,000, Best Beginnings was
approximately $320,000, and the remainder was associated
with Pre-K grants. He elaborated that the Parents As
Teachers program served about 50 families, which equated to
approximately $4,700 per family. He did not believe the
funds were fairly distributed throughout the state. He
opined early learning coordination was an area of the
budget that needed to be reduced in order for the state to
be fiscally responsible. He noted it was not a reflection
on the value of the programs.
Representative Sullivan-Leonard supported the amendment.
She acknowledged that the programs were vital, but she
believed there were private sector organizations that could
step up and fund the services. She wanted to remove the
programs from government oversight and to encourage the
private sector to provide funding.
Representative Josephson strongly opposed the amendment. He
stated it was unfair to say that Alaska was not
accomplishing what was needed compared to other states and
then eliminate Pre-K (when other states had Pre-K). He
remarked that much of the issue was related to
socioeconomics, which he believed was an important
consideration when looking at achievement. He referenced
the National Assessment of Educational Progress Scores and
explained that students scored well in the eighth grade,
which was a reflection of catching up. He continued that
students scored poorly at the fourth grade level, which was
a reflection of the state's need for the programs. He
believed the funds were a great investment.
Vice-Chair Ortiz expressed opposition to the amendment. He
underscored the value of Pre-K programs. He reported that
90 percent of a child's brain development occurred before
age five. He expounded that for a relatively small
investment, huge benefits were gained such as school
readiness, stronger social skills, parental involvement,
and identification and early intervention for at risk
behaviors. The immediate economic impact for parents with
access to care for their children earned an increased $2
billion in wages. He elaborated that studies showed access
to Pre-K could deliver a 7 percent increase in future
economic earnings; the figure jumped up to 13 percent for
at-risk children. He believed the value and benefit from
the investment was apparent. He stated that as funding
adjustments were made, the issue was about where priorities
resided. He reported he could stand up for education all
day long.
9:28:56 AM
Co-Chair Foster opposed the amendment. He noted that he had
supported the previous amendment the committee had
considered [on 4/3/19] to increase spending to flat fund
Parents As Teachers. He did not support the full
elimination of funding.
Vice-Chair Ortiz MAINTAINED his OBJECTION.
Representative Carpenter provided wrap up on the amendment.
He thought the committee was faced with a false dilemma. He
believed it was a personal responsibility for parents to
provide early education to their kids. He stated that part
of the problem he heard from teachers was about the lack of
parent participation in the education system. He stated
there was not a constitutional responsibility to educate
Pre-K. He stressed the constitutional responsibility was to
provide education for K-12. He underscored that the
responsibility to educate children prior to Kindergarten
resided with parents. He reasoned that the state could not
afford to do everything it wanted; therefore, it was
necessary to pare spending down to what was needed. He
recognized the importance of Pre-K education. He suggested
that people could continue to educate their Pre-K children,
but the method would look different than in the past.
9:31:16 AM
AT EASE
9:31:42 AM
RECONVENED
Co-Chair Foster reported there was a technical issue with
the amendment.
Co-Chair Wilson MOVED to ADOPT Amendment 1 to Amendment H
DOE 4. She explained the amendment would delete the
$2,231,700 and insert a reduction of $1,994,700. The
amendment reflected the $237,000 decrease adopted the
previous day.
Co-Chair Foster stated his understanding that Amendment H
DOE 4 in its original form would remove more funds than
actually existed for the increment. He asked for
verification that the proposed amendment to Amendment H DOE
4 would fix the error.
Co-Chair Wilson affirmed that Amendment H DOE 4 would take
out money that did not exist because the committee had
previously removed $237,000. The amendment reflected the
sponsor's intention with Amendment H DOE 4.
There being NO OBJECTION, Amendment 1 to Amendment H DOE 4
was ADOPTED.
9:32:48 AM
Vice-Chair Ortiz MAINTAINED his OBJECTION to the adoption
of Amendment H DOE 4 as AMENDED.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Tilton, Carpenter, Sullivan-Leonard,
Wilson
OPPOSED: Josephson, Knopp, LeBon, Johnston, Ortiz, Foster
The MOTION to adopt Amendment H DOE 4 as amended FAILED
(5/6).
9:33:48 AM
Representative Carpenter MOVED to ADOPT Amendment H DOE 5
(copy on file):
Education Support and Administrative Services
(continued) Pre-Kindergarten Grants
H DOE 5 - Pre-Kindergarten Grants Deleted
Eliminates Pre-K Grants.
1004 Gen Fund (UGF) -2,000.0
Vice-Chair Ortiz OBJECTED.
Representative Carpenter reviewed the amendment. The
amendment would eliminate Pre-K grants for a total of $2
million.
Vice-Chair Ortiz MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: LeBon, Merrick, Sullivan-Leonard, Tilton,
Carpenter, Wilson
OPPOSED: Knopp, Josephson, Ortiz, Johnston, Foster
The MOTION PASSED (6/5). There being NO further OBJECTION,
Amendment H DOE 5 was ADOPTED. [Note: Action on Amendment H
DOE 5 was later rescinded and failed to be adopted on a
vote of (4/7). See 2:15 p.m. for detail.]
9:35:32 AM
Representative Carpenter MOVED to ADOPT Amendment H DOE 6
(copy on file):
Alaska State Council on the Arts
H DOE 6 - Eliminate the State Council on the Arts
This would delete all funding for the Alaska State
Council on the Arts for the purposes of outsourcing or
privatizing the agency.
1002 Fed Rcpts (Fed) ?806.6
1003 GF/Match (UGF) ?693.5
1005 GF/Prgm(OGF) ?10.9
1007 I/A Rcpts (Other) ?7.0
11OB Stat Desig (Other) ?2,321.6
1145 AIPP Fund (Other) ?30.0
Representative Josephson OBJECTED.
Representative Carpenter reviewed the amendment. He
appreciated the conversation that occurred on the subject
in subcommittee. He believed the council was a great
success story for the state. He pointed out that the
council had done a good job finding alternate private
funding resources throughout the state over time. He
elaborated that private donations currently exceeded the
amounts of state and federal funding from previous years.
He believed that in a time when fiscal responsibility
mattered and the state was faced with difficult decisions,
the organization could stand on its own via donations. He
thought it made sense to reduce state funding.
Co-Chair Wilson addressed the program's success and
discussed the opportunity it provided students. She
detailed that the program brought in specialists to educate
students about culture in Alaska in addition to the arts.
She pointed out that for the $693,500 - she hoped the
department could consider looking at other funds in the
future - the state received about $3.2 million to help
students improve. She reasoned that not all students were
academic, and the state had cut back opportunities in
schools. She encouraged the department to look at ways to
increase funds from other sources in the coming year. She
suggested asking schools to potentially put some funds in
as well in the future. She supported the program.
9:38:01 AM
Representative Josephson opposed the amendment. He shared
that in the 1960s President Johnson created the National
Endowment of the Arts to form what he called the Great
Society. He believed the legislature occasionally needed to
have a "city on the hill" concept in its mind. He spoke to
the importance of thinking about the greater good.
Representative LeBon was opposed to the amendment. He
supported the program. He informed members the federal
component was conditional on state support and leveraged $9
for every $2 in unrestricted general funds (UGF). The
program had existed for over 30 years and had consistently
grown its funding by securing money from the private
sector. He stated the program was an example of what was
working.
Representative Sullivan-Leonard supported the amendment.
She believed there had been many years for the legislature
to discuss which programs funded by the state worked and
which did not. She stated the program was an example where
philanthropy (e.g. the Rasmussen Foundation) could help
support the State Council on the Arts. She stated it was
not the time to say the issue had not been sufficiently
discussed. She emphasized that the budget had been talked
about repeatedly. She thought the council was an example
where a reduction could be made, and the private sector
could assist with funding. She believed there were other
sources in the private sector to fund the program. She
wanted to make clear reductions to areas where the private
sector could fill in.
Representative Knopp appreciated members recognizing the
value of a program that was working. He was opposed to the
amendment. He noted it was rare to see the state
contributing one-third to a program that was funded two-
thirds from other funding sources. He noted that the act
passed in 1965 [National Endowment of the Arts] specified
that federal funding participation was contingent on state
funding participation. He explained that without state and
federal participation, foundations contributing funding
(over $2 million in the case of the Alaska Council on the
Arts) were disinclined to participate. He stressed that the
council was one of the few programs that had worked
extremely well.
9:41:49 AM
Vice-Chair Johnston noted that Representative Carpenter was
on the education subcommittee and believed he understood
the level of contributions the council had brought in. She
detailed that the council had received private funds from
sources mentioned by Representative Sullivan-Leonard. There
had been active engagement by the council to bring in non-
governmental funds. She appreciated the council's efforts.
Co-Chair Foster expressed his support for the Council on
the Arts and the outreach work it did in rural Alaska
related to suicide prevention.
Representative Carpenter stated that the council's good
work could continue, but in a different form. He reasoned
that just because it had been done one way did not mean it
could not be done another way. He understood there were
state funds tied with federal funds; however, he pointed
out that the federal government was $23 trillion in debt.
He stated that the state's spending habits were carried on
the backs of the children. He stressed the state was
addicted to looking to state and federal entities to pay
for its programs. He believed the private sector was fully
capable of meeting the mission on its own. He emphasized
there was a price to be paid to continue state spending.
9:44:11 AM
Vice-Chair Ortiz MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Tilton, Carpenter, Sullivan-Leonard
OPPOSED: LeBon, Ortiz, Knopp, Josephson, Johnston, Wilson,
Foster
The MOTION to adopt Amendment H DOE 6 FAILED (4/7).
9:44:55 AM
AT EASE
9:45:27 AM
RECONVENED
Co-Chair Wilson WITHDREW Amendment H DOE 7 (copy on file).
She explained the amendment pertained to [the elimination
of] funding for the aquatic center at Mount Edgecumbe. She
detailed that the increment was receipt authority allowing
Mount Edgecumbe to charge community members to use the pool
to help fund operating costs; therefore, she withdrew the
amendment.
9:46:05 AM
AT EASE
9:54:09 AM
RECONVENED
Representative Carpenter WITHDREW Amendment H DOE 8 (copy
on file).
Representative Carpenter MOVED to ADOPT Amendment H DOE 9
(copy on file):
Alaska State Libraries, Archives and Museums
Library Operations
H DOE 9 - Facility Operations and Maintenance Support
Reduction
Reduce appropriation for facilities maintenance,
support and operations.
1004 Gen Fund (UGF) -215.1
Vice-Chair Ortiz OBJECTED.
Representative Carpenter reviewed the amendment that would
reduce funding for facility operations and maintenance
support for the Alaska State Libraries, Archives and
Museums in Juneau for a total of $215,000.
Vice-Chair Ortiz opposed the amendment. He shared that the
museum had been an investment made by previous legislatures
and had become a primary element in the presentation of
Alaskan culture and identity to the millions of tourists
who visit Juneau. He underscored that the investment was
one of the community's main attractions. He stressed it was
paramount to continue funding in the museum that had been
invested in by the state. He explained the reduced funding
would greatly reduce the state's ability to maintain its
own investment.
Co-Chair Wilson asked the amendment sponsor how much
revenue was raised by the library entrance fee. She asked
how much the state funds offset the visitor fees. She
explained that often fees went into state UGF, making it
difficult for legislators to understand the fund source.
9:57:49 AM
Representative Josephson stated that he would consider
supporting the amendment if the sponsor could describe in
detail why the facility could survive the cut, what would
not happen as a result of the cut, and why facility
operations and maintenance support would be okay
notwithstanding the cut.
Vice-Chair Johnston asked where the funds were coming from.
She looked at the budget and observed the different
allocations for library operations, archives, museum
operations, and the library facilities and maintenance in
Juneau.
Vice-Chair Ortiz added that the request for the money came
from the administration on the last day the subcommittee
met. The monies were essential to "keep the lights on" in
the facility.
9:59:32 AM
Representative Carpenter was not surprised about the
discussion to maintain a library with state funds because
that was the way the things had always been paid for. He
appreciated the point that 1 million tourists came through.
He pointed out the increment under discussion was $215,000.
Vice-Chair Ortiz interjected that the state had 1 million
tourists.
Representative Carpenter believed it was a false dilemma to
say there was an important museum that could only be kept
open by spending state money. He stated that in the
business world, the method was not appropriate. He believed
there were other ways to pay for a museum including user
fees. He stated the amendment was not a reflection on the
museum or its importance. He stressed there was a deficit
of $1.6 billion that would be taken from individuals in the
form of taxes or by reducing the PFD. He emphasized that
was not what the people wanted. He believed it was possible
to determine a different way to do business.
Vice-Chair Ortiz MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Tilton, Carpenter, Sullivan-Leonard
OPPOSED: Ortiz, Josephson, Johnston, Knopp, LeBon, Wilson,
Foster
The MOTION to adopt Amendment H DOE 9 FAILED (4/7).
10:01:41 AM
AT EASE
10:10:35 AM
RECONVENED
Vice-Chair Ortiz MOVED to ADOPT Amendment H DOE 10 (copy on
file):
Education Support and Administrative Services Child
Nutrition
GA 3/27 Additional Federal Receipts for Donated
Commodity Fee Fund
This request increases the authority for the donated
commodity fee fund, fund 1014. This fund is not a
sweepable fund and was created per 7CFR section 250.17
specifically to collect and track receipts from school
districts for administrative costs. Any funds that
were unobligated in previous years remain in the fund.
In previous years, the Department of Education and
Early Development has not needed additional authority
in the fund because total expenditures did not exceed
revenues. The department anticipates expenditures to
increase by approximately $100.0 due to increased
shipments resulting from the U.S. Trade Mitigation
Program. Increasing budget authority in this fund will
allow the department to properly spend out of this
fund to offset these increased expenditures.
1014 Donat Comm (Fed) 100.0
Co-Chair Wilson OBJECTED for discussion.
Vice-Chair Ortiz reviewed the amendment that was a result
of a request from the governor (after the subcommittee
concluded) for a $100,000 increase in federal receipt
authority to support child nutrition.
Representative Tilton asked what fund code 1014 "Donat
Comm" stood for in the amendment explanation.
10:11:46 AM
AT EASE
10:12:17 AM
RECONVENED
Vice-Chair Ortiz replied that "Donat Comm" stood for
donated commodities.
Representative Carpenter addressed the importance of
ensuring children had food. However, he highlighted that
the country was paying $500 billion in interest in the
current year on its federal debt. He believed the situation
was due to good ideas requiring increased spending at the
federal level for myriad programs. He elaborated that it
resulted from every community in the country deciding it
was a good idea to spend $100,000 on various things. He
believed at some point it was necessary to say enough was
enough. He wanted the state to live within its means and
quit looking to the federal and state governments for the
funds. He stated that the money came from taxes, not out of
thin air. He opposed the amendment because he believed the
state should wean itself from federal funds.
Representative Josephson stated he could not fix Washington
D.C.'s problems. He pointed out that no one in Washington
would take note of Alaska choosing not to accept $100,000.
He reasoned if the logic was taken to the extreme, Alaska
would choose not to accept any highway money. He stressed
that former U.S. Senator Ted Stevens would have accepted
the money for the state. He agreed with that philosophy.
Co-Chair Wilson read from the amendment explanation [see
indented explanation above]. She was trying to figure out
if there was any food provided by the funds. She thought it
sounded like the state may need the funds to meet a
tracking obligation required by the federal government. She
had originally believed the amendment related to donated
food similar to the Food Bank. She asked whether the
increment provided food for children or represented funds
for administrative costs for certain requirements the state
was forced to comply with in order to receive federal
funds.
10:16:45 AM
AT EASE
10:18:46 AM
RECONVENED
Co-Chair Foster stated his understanding that the
subcommittee did not have a chance to vet the increment
because the administration had submitted the amendment very
recently. He asked for verification that Vice-Chair Ortiz
was carrying the amendment as a courtesy for the
administration.
Vice-Chair Ortiz responded affirmatively. He provided
follow up to previous questions. He explained the increment
was a federal block grant that provided commodities funding
for food and nutrition programs such as school breakfast,
national school lunch, special milk, child and adult care
food programs, summer food services, education training,
and emergency food assistance. The particular item was cash
in lieu of donated food from the U.S. Department of
Agriculture (USDA) to help distribute food donated by the
USDA.
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment H DOE 10 was
ADOPTED.
10:20:36 AM
AT EASE
10:20:49 AM
RECONVENED
Representative Merrick MOVED to ADOPT Amendments H DEC 1,
3, 5, and 9 (copy on file):
Administration
Administrative Services
H DEC 1 - Replace Ocean Ranger Fees with Commercial
Passenger Vessel Environmental Compliance Fund
A fund source change is required to maintain programs
while deleting the Ocean Ranger Program.
1166 Vessel Com (Other) 19.6
1205 Oen Ranger (Other) -19.6
Administration
State Support Services
H DEC 3 - Replace Ocean Ranger Fees with Commercial
Passenger Vessel Environmental Compliance Fund
A fund source change is required to maintain programs
while deleting the Ocean Ranger Program.
1166 Vessel Com (Other) 87.1
1205 Oen Ranger (Other) -87.1
Environmental Health
H DEC 5 - Replace Ocean Ranger Fees with Commercial
Passenger Vessel Environmental Compliance Fund
A fund source change is required to maintain programs
while deleting the Ocean Ranger Program.
1166 Vessel Com (Other) 314.l
1205 Oen Ranger (Other) -314.1
Water
Water Quality, Infrastructure Support & Financing
H DEC 9 - Repeal Ocean Ranger Program
Repeal the Ocean Ranger Program.
1205 Oen Ranger (Other) -3,426.0
Vice-Chair Ortiz OBJECTED.
Co-Chair Wilson asked if the objection was to combining the
amendments or to the content of the amendments.
10:21:27 AM
AT EASE
10:21:59 AM
RECONVENED
Co-Chair Foster asked for a clarification from the
amendment sponsor on her motion.
Representative Merrick explained her motion was to hear the
amendments as a bundle, given they all pertained to the
Ocean Ranger Program. She detailed that Amendment H DEC 1
would eliminate the program and the others [Amendments H
DEC 3, 5, and 9] were fund source changes.
There being NO OBJECTION, it was so ordered; the amendments
would be considered together.
10:22:48 AM
AT EASE
10:23:58 AM
RECONVENED
Co-Chair Foster clarified that in the future if a member
wanted to bundle amendments they did not need to make a
motion to do so.
Representative Merrick Representative Merrick MOVED to
ADOPT Amendments H DEC 1, 3, 5, and 9 [see indented
amendments above for detail].
Vice-Chair Ortiz OBJECTED.
Representative Merrick explained that Amendment H DEC 1
would eliminate the Ocean Ranger Program. She read from a
statement:
The Ocean Ranger Program was created by a ballot
initiative in 2006 and is funded by a $4 per berth fee
on all commercial passenger vessels with 250 or more
berths. While this initiative was well intended, the
program has proven to be ineffective. Eliminating the
ocean rangers will not have significant impacts on
regulation of cruise ships in Alaskan waters. Using
funds from the Commercial Passenger Vessel
Environmental Compliance Fund, permitting and
compliance staff will still monitor cruise ships for
compliance with state wastewater and air quality
permits, as well as, regulations through records
reviews, in-port inspections, opacity monitoring, and
vessel tracking.
Vice-Chair Ortiz spoke to his objection. He confirmed that
the program had started as a result of a citizens'
initiative in 2006. He referenced the amendment sponsor's
statement that the program was proven to be ineffective. He
wanted to see statistics backing up the statement that the
program was ineffective. He knew that few issues had been
identified when ships carrying ocean rangers were boarded.
He addressed the issue with an example of a state trooper
riding in a person's car. He considered whether a driver
would be more likely to follow rules and regulations when a
state trooper was in their car versus when a state trooper
was not around. He believed logically drivers would all
follow the rules more regularly if a state trooper was
accompanying them. He believed the fact that the rangers
had not identified many issues over the years was an
indication the program was working.
Vice-Chair Ortiz addressed issues facing the oceans. He
detailed that ocean temperatures had been rising and there
was research into the impact of the temperature changes in
relation to fish and game resources. There had been issues
of illegal dumping by cruise ships in the past. He did not
believe there was evidence to back up the statement that
the program was ineffective.
10:28:08 AM
Representative Josephson remarked on the sponsor's
statement that the amendment would end the Ocean Ranger
Program. He believed statute was necessary was necessary to
eliminate a program. He noted that the amendment would
defund the program, but not eliminate it.
Representative Merrick agreed and noted that the governor
had a bill that would eliminate the program.
Representative Josephson noted that the program was part of
a 2006 initiative and was one of the only remaining parts
of the initiative. He detailed that previous legislatures
and legislators had seen fit to maintain the program since
2006. His primary concern was that as with many industries,
even though there were good actors contributing to the
economy, they generally respond to enforcement and
regulation. He noted that industry did not necessarily do
the right thing without regulation and enforcement. For
example, the Juneau Empire reported on September 13 [2018]
that the cruise ship industry had been fined for eight air
violations. He elaborated that two months back, the
national media reported studies that air pollution on
cruise ship decks rivaled that of Chinese cities. He
believed it was incumbent on the state to have someone on
the ships instead of relying only on remote enforcement.
Representative Josephson shared that he was most disturbed
by the past release of photochemicals into Southeast
Alaskan waters. He detailed that the industry had fought
the Environmental Protection Agency on emission control
areas (a 200-mile zone where heavy fuels should not be
used). He underscored that the industry would push as hard
as it could. He believed it was likely to push harder and
get away with more without an observer on ships. He was
opposed to the amendment.
10:30:27 AM
Representative Sullivan-Leonard looked at the action items
from the subcommittee and did not see an elimination of the
program but a transfer to the Commercial Passenger Vessel
Environmental Compliance Fund.
Representative Merrick replied that rather than going into
the fund for the Ocean Ranger Program the money would go to
the Commercial Passenger Vessel Environmental Compliance
Fund to facilitate monitoring by the department [Department
of Environmental Conservation] that the ocean rangers would
have done.
Representative Sullivan-Leonard supported the amendment.
She explained that cruise ship oversight would not go away.
She stated that there may not be an ocean ranger going out
to ensure cruise ships were under compliance, but she
believed monitoring would always be in place under the
Department of Environmental Conservation (DEC) and through
federal regulations. She remarked that cruise ships paid a
high tax in Alaska, in addition to numerous regulations and
rules the industry was required to follow.
Representative Tilton supported the amendment. She reported
the committee had heard from DEC that in 2018 there had
been 1,579 inspections conducted on cruise ships in Alaskan
waters and out of those inspections, ocean rangers had
identified 66 potential noncompliant items that fell under
the jurisdiction of the state's cruise ship program. She
reported that if the program was repealed it would not
eliminate cruise ship inspections. She elaborated that
permitting and compliance staff would still be monitoring
cruise ships for compliance with wastewater and air quality
permitting and regulations through the records review, in-
port inspections, and vessel tracking.
10:33:44 AM
Representative Carpenter supported the amendment. He stated
the program put one person on vessels to prevent bad
behavior on large ships. He remarked that the state was
spending money and requiring companies to adhere to
regulation that burdened their ability to do business. At a
time when the state was crunched for money and it wanted to
encourage economic growth, he thought it was necessary to
look for things that hindered the growth of the private
sector. He stated the program was marginally effective and
not necessary to prevent pollution and adhere to federal
and state regulations. He supported the elimination of the
program to allow businesses to thrive.
Vice-Chair Johnston stated that from a hearing in the other
body [the Senate] she had the impression that the rangers
were not necessarily Alaskan residents. She asked for the
breakdown of Alaskan residents versus non-residents working
as ocean rangers in 2018.
Representative Merrick replied she had been told the
rangers were all from out of state.
10:35:43 AM
AT EASE
10:46:39 AM
RECONVENED
Vice-Chair Ortiz recognized there had been significant
discussion about the Ocean Ranger Program and the
amendment. He reminded members that they were not talking
about any impact on state finances. The program was funded
by the $4 per passenger fee. He underscored that the
amendment would not reduce the funds collected from
passengers. He stated it was not a valid argument to claim
that the program's elimination would make things more
competitive for private enterprise because the money would
be collected one way or the other. He addressed the
previous question about who the ocean rangers were and
whether they were all from out-of-state. He clarified there
were at least four individuals living in Ketchikan who were
employed by the program.
Vice-Chair Ortiz addressed the value of the program. He
stated that the number of issues identified by ocean
rangers reflected success. He explained that if a person
was on board a ship monitoring its activities, it made
sense there were not many problems on that particular ship.
He acknowledged there would continue to be regulatory
activities by DEC, but only in port. He stressed that no
one knew what a ship was doing when it was away from port
unless someone was onboard monitoring. The program was not
perfect, but there was a deterrent effect by the presence
of the ocean rangers. He emphasized that adopting the
amendment would not save the state or cruise ship
passengers funds.
10:50:51 AM
Vice-Chair Johnston highlighted her concern about how to
factor in bills that were pending during the budget
process. She understood from the Legislative Finance
Division that if the decrement was passed there would still
be enough funds in the fund for the program to continue for
the remainder of the year. She continued that if the issue
was not addressed in the bill form before the end of the
[fiscal] year, the situation where the bill had
independence from the budget system would still exist.
Co-Chair Wilson thought they needed to be careful about
talking about industry. She appreciated the cruise industry
and did not believe that it tried to dirty the state's
waters in any way. She believed businesses did not try to
break the law or go around the law. She believed some of
the potential violations had probably related to paper
documentation or other things. She explained that DEC would
still have to monitor the industry (as required by the EPA
and Alaskans). She believed the passage of the amendment
would force the state to determine the good and bad things
about the program and to learn how DEC would continue to
monitor in a different fashion and what it would mean to
industry. She voiced her appreciation for the cruise ship
industry that was responsible for bringing millions of
travelers to Alaska in a safe way.
10:53:26 AM
Vice-Chair Ortiz MAINTAINED his OBJECTION.
Representative Merrick provided wrap up on the amendments.
She acknowledged that she had been born and raised in
Southeast and cared deeply about the Alaskan waters and
marine resources. She emphasized that amendments would not
change the overall compliance the cruise industry would
have to abide by. She stated that DEC was doing a fantastic
job at monitoring the cruise ships for regulation
compliance. She believed the amendments would reduce
administrative burden on the department. She had faith the
department would continue to do an excellent job.
A roll call vote was taken on the motion to adopt
Amendments H DEC 1, 3, 5, and 9.
IN FAVOR: Sullivan-Leonard, Tilton, Carpenter, Johnston,
Knopp, LeBon, Merrick, Wilson
OPPOSED: Ortiz, Josephson, Foster
The MOTION PASSED (8/3). There being NO further OBJECTION,
Amendments H DEC 1, 3, 5, and 9 were ADOPTED.
10:55:20 AM
Representative Merrick MOVED to ADOPT Amendment H DEC 2
(copy on file):
Administration
Administrative Services
H DEC 2 - Economist III Position Reduction
Delete Economist III: PCN 18-7857 and associated
funding.
1003 GF/Match (UGF) -124.3
Representative Merrick explained the amendment would reduce
an economist III position within the Department of
Environmental Conservation. She provided details with a
statement:
This position was created by a bill in 2014, HB 140.
The legislature defunded that position in 2017;
therefore, it's an unfunded mandate. The department
was required to maintain the position and perform
economic analysis as required by law. The department
proposes to cease economic analysis of new regulation,
delete the position, and suspend any contracts for
economic analysis.
Co-Chair Wilson OBJECTED for discussion.
Representative Knopp recognized that the position had been
defunded. He referenced the $124,000 decrement in the
personal services line. He wondered if there had been no
funds expended, where the funding decrement was coming
from.
10:57:20 AM
AT EASE
10:59:04 AM
RECONVENED
Representative Merrick replied that the personal services
detail referenced by Representative Knopp was the
governor's budget - it had been deleted from the section
and showed as zeros. The additional $124,000 came from UGF.
Vice-Chair Ortiz reported that the budget subcommittee had
looked at the proposal to eliminate the economist III
position and unanimously rejected the proposal. He
explained that the economist position was in place because
statute currently required public notice to include the
economic analysis of new regulations. The department would
still have to perform the functions if the position was
eliminated.
Representative Josephson recalled that the bill [HB 140]
may have been sponsored by former Representative Lora
Reinbold. He pointed out that the bill had been a
conservative measure designed force the departments to
explain why they were doing regulations. He stated that in
a sense it had been an anti-regulatory measure. He noted
that the amendment would repeal a position designed to have
a conservative bent.
Co-Chair Wilson asked if the position was new.
Additionally, she wondered if there was only one economist
in the department. She thought there was more than one. She
wondered how many economists were available to do the
department's work.
11:01:28 AM
Representative Merrick replied she did not know how many
positions there were. She reported the department supported
the amendment and it had already absorbed the loss of the
economist III position. The department was already handling
the work without the position.
Vice-Chair Ortiz reported that the economist III position
had resulted from past legislation (HB 140) sponsored by
former Representative Lora Reinbold in 2014. He read a
description of the purpose of the legislation:
To provide better information about regulations that
may significantly affect private individuals,
businesses, and other state agencies in local
governments. House Bill 140 required the regulation
notices include information about estimated costs
beyond those to the agency.
Vice-Chair Ortiz explained that the bill had been in
support of private businesses and individuals and their
relationship with DEC.
Representative Sullivan-Leonard supported the amendment.
She reasoned an economist had many different roles. She
thought that if an economist was looking into how DEC could
better serve the private sector, there were different
avenues they could take in other divisions and through the
Division of Legislative Audit. She believed the
administration felt DEC did not need the position.
Vice-Chair Ortiz noted the position was currently filled.
Representative Tilton reasoned that there was no need for
the position if the department was no longer doing the job.
She noted that the department had already absorbed the work
and was able to operate without the position.
Representative Merrick provided wrap up on the amendment.
She reiterated that DEC had absorbed the position already.
Additionally, the department was discontinuing conducting
analysis of new regulation and was suspending any contracts
for economic analysis.
Vice-Chair Ortiz MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Sullivan-Leonard, Tilton, Carpenter, Johnston,
Knopp, LeBon, Merrick, Wilson
OPPOSED: Ortiz, Josephson, Foster
The MOTION PASSED (8/3). There being NO further OBJECTION,
Amendment H DEC 2 was ADOPTED.
11:05:50 AM
Representative Merrick MOVED to ADOPT Amendment H DEC 4
(copy on file):
Environmental Health
H DEC 4 - Delete Dairy Program
Delete Dairy Program
1004 Gen Fund (UGF) -179.6
Vice-Chair Ortiz OBJECTED.
Representative Merrick explained that the amendment would
eliminate the dairy inspection program and one associated
position. She read from a statement:
This position currently acts as the statewide dairy
program coordinating expert. They are responsible for
permitting, inspecting farms and manufacturing and
processing facilities. Any non-dairy related work will
be shifted to other staff. The elimination of this
position will not increase the risk to public health
as unregulated milk won't enter the market. This
amendment still allows dairies to operate and sell
their products to Alaskans wishing to purchase local
milk through a cow-share program. The number of state
dairies has declined over time from 65 to 1 operating
bovine farm today. With only one farm operating in
Alaska, it seems unreasonable to continue spending
$180,000 of state funds to subsidize this one
business. There are no other businesses that get that
kind of treatment.
11:07:08 AM
Vice-Chair Ortiz opposed the amendment. The subcommittee
had unanimously rejected cutting the dairy program. He
reported that the issue did not directly relate to his
district; however, in the name of opportunities for
economic development it had been brought to his attention
there were at least two or three businesses in the Mat-Su
Valley area looking to enter into the dairy industry. The
elimination of the program would be detrimental to that
ability. He opposed the amendment in the name of economic
development and support for small business in the private
sector.
Vice-Chair Johnston referred to Representative Merrick's
statement that some of the position duties could be assumed
by others in the division. She wondered if that meant dairy
farms could continue because they could become part of a
coop. She stated her understanding there could not be an
exchange of raw milk. She wondered if there was any way for
the dairy industry to grow and flourish if the position was
eliminated.
Vice-Chair Johnston recalled when there had been farms
around the state. She remarked that the dairy industry was
very labor intensive requiring attention 24/7. The only way
to really make a dairy farm operate successfully was to
have a large farm and sell commercially. She understood
there were two or three dairies that were about to come
online. She thought perhaps one of the dairies was located
in Kodiak. She did not believe the dairy program made sense
for one dairy, but she believed it made sense to start
supporting the industry. She spoke to the importance of a
local source of food. Unless the dairies could continue to
open and grow without the position, she did not support the
amendment.
11:10:36 AM
Representative Knopp was glad Vice-Chair Johnston had
mentioned the dairies coming online. He shared that
representatives from the agricultural farm bureau had
visited his office recently and had reported there was a
dairy in Kodiak getting ready to come online. He believed
another was located in Mat-Su. He noted that Vice-Chair
Johnston had highlighted that raw milk could not be
exchanged. He believed the position was responsible for
more than dairy services. He remarked that the state
government touted being open for business. He referred to
state and federal mandates and that the program was the
only way to certify the milk. He did not believe the state
should go down the path of eliminating the program and
closing all doors. He opposed the amendment.
Representative Carpenter stated the decision was very
difficult for him. He highlighted that the state sent $2
billion of its money out of state annually because it
imported up to 98 percent of its food. He addressed spoke
to the goal of weathering the economic fluctuations within
the oil industry and noted that increasing reliance on food
grown in Alaska would either stimulate the economy or leave
more money in residents' pockets as a result of growing
their own food. He stressed that Alaska used to grow 50
percent of its own food and had dairies producing milk in
the state, which kept the wealth in the state. He pointed
to a problem with government regulations that required an
inspector to stamp milk before it could be sold.
Representative Carpenter shared that his family had been
purchasing milk from a cow-share program and they had
probably been healthier for it. He noted there was also a
produce inspector required in the agriculture industry for
produce leaving state to be sold. He believed the inspector
could also inspect milk prior to its sale. He believed
there was room for improvement in the area. He pointed out
that adding regulations added cost. He did not believe it
was fiscally responsible to subsidize one particular
business, but he recognized that "we have done it to
ourselves."
11:14:12 AM
Vice-Chair Ortiz added that the House member from Sutton
was not in support of the amendment.
Representative Sullivan-Leonard remarked that the dairy
industry had been an emotional topic for many over the
years. She shared that she had grown up drinking only
Matanuska Maid milk. She expounded that an extra dairy had
been necessary in her home district. She reported the dairy
was owned by an incredible family who had worked tirelessly
to continue operating. The difficult question was how much
the state would subsidize one or two dairies. She asked if
it was fair to other industries that would love to have a
subsidy to keep their industry going. She referenced the
amendment sponsor's mentioning of a coop that could provide
oversight for what the position would do (possibly through
the USDA or a private group). She found it necessary to put
the emotional aspect aside and determine how much the state
was subsidizing, if it was affordable, and whether a coop
could take it on more effectively.
Co-Chair Wilson stated there had been slaughterhouses, fish
processing plants, and other industry, much of which had
probably closed due to regulation that made businesses'
bottom line ineffective. She noted the only remaining fish
processing plant in the Interior was located in her
district and it was close to shutting down because of
regulation. She wondered whether the legislature was
willing to give money to other industries if it was willing
to give money to another [the dairy industry]. She
elaborated that if the business closed, locals would not
have the ability to get their fish smoked or a place to
have their game processed. She reasoned that if the
business closed people would smoke their fish and process
game on their own, but it would still be a loss to the
community.
Co-Chair Wilson considered whether the state would look at
starting a program for other food product industries to
help when they were negatively impacted by regulation. She
remarked on the local food industry constantly competing
against food that was shipped into the state from
elsewhere. She elaborated that unfortunately it was
possible to ship food from the Lower 48 at a much lower
price, which put local farmers and food processors at a
disadvantage. She did not want to see the dairy close, but
she could not go to her fish processing plant and tell them
that they did not rise to the same level as the dairy. She
thought the state needed to address its overzealousness and
consider whether all of its regulations were necessary. She
pointed out that the state did not have dairies any longer
because their bottom line had not penciled out. She did not
know how long the subsidy had existed. She thought it
should be concerning to the legislature that the state was
no longer able to produce as it had in the past.
11:19:04 AM
Representative Carpenter did not view the money as a
subsidy. He detailed it was a regulation requiring milk to
be inspected by a state agency or government agency to
certify it as healthy for commercial sale. He remarked
there were other products requiring that state stamp of
approval. He explained that the state's need to have the
regulation, required paying for a state worker to provide
the stamp of approval. He underscored it was possible to
have healthy milk without stamping it; however, government
regulations required the stamp. He reasoned the crux of the
problem was that the business would not be able to sell its
milk because the government agent did not provide a stamp.
Co-Chair Foster acknowledged Representative Jonathan
Kreiss-Tompkins in the audience.
Representative Knopp underscored the funds were not a
subsidy. He explained that the inspections took place
because it was a public health issue. He reasoned that the
state did not want manufacturers putting product on the
shelves without testing. He pointed out it was the reason
regulations had started to begin with. He reasoned that
going down that road meant that the state would need to do
away with food inspectors and close all of the restaurants.
He provided weights and measures employees at gasoline
stations or in the meat department. He stressed that
consumer protection and public health issues was the reason
for the regulation. He reiterated the funds were not a
subsidy.
Representative LeBon echoed comments by Representative
Knopp and Representative Carpenter. He agreed the funds
were not a subsidy where funds went directly to an
industry. The funding went to verifying a healthy, safe
product was being sold on the market.
Co-Chair Wilson clarified that the industry had to pay for
the same stamps for approval for the product it sold. She
explained the difference was those businesses paid fees to
have DEC inspect their products. She detailed that the
[dairy] organization did not have to pay the same fees
because the state paid for the inspector. She believed it
was an apples-to-apples comparison. She furthered that the
department was making sure the [dairy] industry had the
same stamp for the product it was selling, whereas, other
industries were paying the DEC inspection fee themselves.
The question was who would pay for the inspection. She
believed it was an issue of fairness. She underscored that
private businesses were paying in fees. She wanted to treat
fish, milk, and all other producers equally.
11:23:08 AM
Co-Chair Foster acknowledged Representatives Louise Stutes
and Bryce Edgmon in the audience.
Representative Merrick referenced a statement by Vice-Chair
Ortiz and noted that the representative from Sutton was not
on the committee. She remarked that there was no public
health issue; the milk would only be available through a
coop and not commercially. She believed the $180,000 should
be built into the dairy's business model. She suggested
that if it were economically feasible to operate at the
cost of doing business, perhaps the business should not
have opened. She reasoned that 64 dairies would not have
closed if it was economically viable for dairies to operate
in Alaska.
Vice-Chair Ortiz MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Tilton, Carpenter, Merrick, LeBon, Sullivan-
Leonard, Wilson
OPPOSED: Josephson, Johnston, Knopp, Ortiz, Foster
The MOTION PASSED (6/5). There being NO further OBJECTION,
Amendment H DEC 4 was ADOPTED.
11:25:20 AM
Representative Merrick MOVED to ADOPT Amendments H DEC 6
and 7 (copy on file):
Environmental Health
H DEC 6 - Fund Source Change for
Shellfish Biotoxin and Growing Water Testing Program
Fund source change to allow the Department to collect
the fees from shellfish growers and harvesters as
required in regulation.
1005 GF/Prgm (DGF) 91.0
1166 Vessel Com (Other) -91.0
Environmental Health
H DEC 7 - Increase Fees for Shellfish Biotoxin and
Growing Water Testing Program
It is the intent of the Legislature that the
Department of Environmental Conservation increase fees
for the Shellfish Biotoxin and Growing Water Testing
Program as necessary to support program functions.
Co-Chair Wilson OBJECTED for discussion.
Representative Merrick explained the amendments related to
shellfish growers and harvesters with a prepared statement:
Shellfish growers and harvesters are required to pay a
per sample fee to cover the cost of laboratory
testing; however, the state has been paying these fees
on their behalf, meaning that the program is 100
percent subsidized by the state. This industry has
grown significantly and should now be able to shoulder
the responsibility of the cost of this required
testing. The environmental health laboratory processes
approximately 650 samples per year for paralytic
shellfish toxin, 24 samples per year for domoic acid,
and 450 samples per year of water growing for fecal
coliform bacteria. The department estimates that the
total revenue from fees would be $91,000.
The first of these amendments shifts the $91,000 from
the Commercial Passenger Vessel Environmental
Compliance Fund to program receipts to allow the
department to collect fees from shellfish growers and
harvesters. The second amendment adds intent language
directing the department to raise fees as necessary to
support this program.
Vice-Chair Ortiz was opposed to the amendments. He noted
that the discussion had similarities to the discussion on
the previous amendment. He explained that the testing
occurring in the Anchorage facility was for shellfish
poisoning. The shellfish harvesters paid for their product
to be shipped to the Anchorage facility for testing. He
agreed that the state paid for the actual tests. He thought
it was important to consider whether there was a role for
government to play in protecting the health and safety of
its residents. Historically the answer had been yes. He
noted that the amendments veered from that historical
stance. He read from a statement:
The Southeast Alaska Regional Dive Fisheries
Association (SARDFA), while it doesn't pay for this
particular testing facility and their activities, was
the only association in the state to pay for
management of its fisheries by the Department of Fish
and Game via a self-assessment on the ex-vessel value
of the fishery. Right now, they assess themselves a 7
percent tax on geoducks in addition to a 3 percent raw
fish tax that the state requests in order to pay for
the management duties provided by the Department of
Fish and Game. Geoducks alone average an ex-vessel
value of $4.4 million annually. The raw fish tax is
assessed on this, and while that may not seem like
much, that money is dumped into the UGF pot. Because
testing is required in statute, SARDFA must not only
pay divers to collect samples, but they also must pay
for the samples to be GoldStreaked to Anchorage for
testing. Not to mention, the PSP levels have been
higher over the years, so the frequency of testing has
increased.
As of right now, SARDFA has sent approximately 100
samples made up of 15 to 18 geoducks since the season
opened October 1. SARDFA pays approximately $160,000
out of the dive fisheries' pockets to collect and ship
these samples for them to harvest geoducks. If we were
to adopt this amendment it would be in direct
opposition to all of our goals here, which is to try
to support economic development and increased economic
activity within the State of Alaska.
11:30:47 AM
Co-Chair Wilson noted she did not know a significant amount
about the vessel compliance fund. She asked whether
organizations taxed themselves and put the funding into the
compliance fund. She asked if any UGF was used for the
increment. She noted the previous amendment had pertained
to UGF. She wanted to verify the money was coming from the
industry.
Vice-Chair Ortiz answered that the shellfish harvesters
represented by SARDFA paid for all of the Department of
Fish and Game expenses for the management and monitoring of
the fishery. He explained it was different than salmon
seiners or trollers that paid a 3 percent landing tax that
went 50 percent to communities and 50 percent to the state.
He referenced the amendment sponsor's discussion about the
ability of industry to carry its own weight. He agreed the
actual testing process in Anchorage was paid for by the
state. However, the particular industry paid for the
management of their fishery through a 7 percent self-
assessment that went into the Department of Fish and Game's
ability to monitor.
Co-Chair Wilson asked if any UGF went into the vessel
compliance fund.
Vice-Chair Ortiz replied that he did not know.
Vice-Chair Johnston asked about the size of the industry
and any growth that had occurred in the past couple of
years. She considered whether the industry was showing some
strength and growth versus the previous industry discussed
that had gone back to almost zero and was starting to grow
again. She wondered if the industry could withstand
additional fees.
11:34:18 AM
AT EASE
11:44:20 AM
RECONVENED
Vice-Chair Ortiz responded to a question by Vice-Chair
Johnston about whether the industry was growing or
declining. He reported that the industry had great
potential; currently the fishing industry brought in $6
billion annually in economic activity in the state. He
noted the fishing industry was the second largest jobs
provider in the state. There was hope that with further
development in shellfish and mariculture that the industry
would continue to grow. He cited the Hump Island oyster
farm in Ketchikan as long standing, up and coming business.
He explained that the amendment would directly impact the
oyster farm. He detailed that the farm was one example of
businesses that sent their product for inspection to
protect the health of the public. The industry had great
potential and adopting the amendment would hinder it.
Representative Merrick provided wrap up on the amendment.
She elucidated there were no general funds that went into
the Commercial Passenger Vessel Environmental Compliance
Fund.
11:46:46 AM
AT EASE
11:46:57 AM
RECONVENED
Representative Merrick emphasized the desire to have
shellfish testing to ensure its safety; however, she
believed businesses should pay for the testing. She stated
it was another example of considering whether a business
was economically viable. She remarked that the industry
paid for shipping [for testing], but most businesses paid
all of their fees. She stated the regulations were already
in place. She continued that the businesses were supposed
to be paying the fees, but the state had been covering the
cost instead. She concluded that the state could no longer
afford to subsidize businesses; businesses should be
economically viable on their own.
Vice-Chair Ortiz OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, LeBon, Merrick, Sullivan-Leonard,
Tilton, Johnston
OPPOSED: Ortiz, Josephson, Knopp, Wilson, Foster
The MOTION PASSED (6/5). There being NO further OBJECTION,
Amendments H DEC 6 and 7 were ADOPTED. [Note: The action on
Amendments H DEC 6 and 7 was later rescinded by a vote of
(7/4). See page 140 for details.]
11:49:03 AM
Co-Chair Wilson MOVED to ADOPT Amendment DEC 8 (copy on
file):
Air Quality
H DEC 8 - Delete FNSB Air Quality Intent Language
Wordage:
Delete "It is the intent of the legislature that, with
regards to the Air Quality situation in the Fairbanks
North Star Borough, the Department of Environmental
Conservation shall: 1. Submit a Serious State
Implementation Plan (SIP) as quickly as possible that
includes sufficiently stringent Best Available Control
Technologies (BACT) and Best Available Control
Measures (BACM) to be legally defensible and
approvable by the Environmental Protection Agency
(EPA). 2. Maintain adequate DEC staff in the Fairbanks
North Star Borough and streamline the Notice of
Violation (NOV) process to ensure compliance with
current regulations in place and additional
regulations implemented under the Serious SIP 3. DEC
shall coordinate with local governments impacted by
PM2.5 non-attainment to best utilize municipal powers
for mitigation, monitoring and enforcement to the
maximum extent possible under state and local law."
Explanation:
This wordage can negatively impact DEC as it
negotiates with the EPA on what should and should not
be in the SIP. If this process is not done correctly
energy costs could rise at such a level that it would
actually cause more people to turn to utilizing wood
heat.
Representative Josephson OBJECTED for discussion.
Co-Chair Wilson reviewed the amendment. She shared that the
maker of the intent language was another representative
from the Fairbanks North Star Borough. She reported that
the borough [air quality] had been designated as serious by
the Environmental Protection Agency (EPA) due to inversions
and lack of wind. She was concerned that DEC could be
negatively impacted as it negotiated with the EPA on what
should and should not be included in the state
implementation plan (SIP). She communicated that if the
process was not done correctly, energy costs could rise to
a level that would cause more people to utilize wood heat.
Part of the SIP included looking at power plans and
implementing more pollution control devices, albeit she did
not believe that was part of the issue.
Co-Chair Wilson was impressed by the DEC commissioner
designee who was addressing the sensitive issue of wood
stoves - considering how to maintain a way of live while
dealing with the EPA's stringent rules. She noted that
there had been improvement in recent years. She continued
that the commissioner was taking the approach to involve
the community in the process and to communicate how to
comment to show how the EPA what the community could and
could not do economically. She cautioned that if the
process was not done correctly, it would have the opposite
effect (wood burning would not be reduced) if energy costs
increased to due EPA regulations. She appreciated the
amendment language, but she did not want to tie the
commissioner's hands as he was navigating a delicate
situation between meeting the EPA regulations and not
fining residents trying to heat their homes. She elaborated
that in many cases it came down to food, medicine, or heat
as things got tighter and tighter for residents.
11:51:54 AM
Representative Tilton shared that her community was
starting to have air quality issues as well. She supported
the deletion of the language as proposed by the amendment.
She believed setting a precedent could be harmful to her
district.
Co-Chair Foster referenced the sponsor's mention of having
spoken with the maker of the intent language that was added
in subcommittee. He asked if the individual was amenable to
the amendment.
Co-Chair Wilson replied that she had asked the subcommittee
chair who shared the Senate district she was a part of. She
detailed that the representative understood why she wanted
the language removed and was amenable to the change. She
understood why the representative had included the
language. She explained that the representative's area
(unlike hers) was located in the most affected area. She
quoted from the intent language: "enforcement to the
maximum extent possible, under state and local law." She
highlighted that the language could result in fines up to
$500,000. Currently, the agency and borough were trying to
work with residents to make things better instead of merely
fining individuals automatically.
Representative Sullivan-Leonard asked for clarity on the
amendment language. She wondered if the entire language
would be removed.
Co-Chair Wilson stated there should be quotes at the end of
the statement. She confirmed that the amendment would
remove the entirety of the intent language.
11:54:16 AM
AT EASE
11:56:15 AM
RECONVENED
Representative Josephson discussed that the maker of the
amendment in the subcommittee had wanted to tackle the
existing nonattainment problem. He understood that
Fairbanks had been unable to build out its natural gas
system (the issue was being worked on) and that the area
was spread out. He clarified that Fairbanks was not being
picked on or blamed for its circumstance. He asked if the
[amendment's] goal was to put Fairbanks in a position where
perhaps its air quality did not have to improve as much as
it might.
Co-Chair Wilson clarified that the community would not be
in the situation if it had affordable gas like Anchorage.
She added that the Fairbanks area had a lot of [natural
gas] pipe with nothing in it. She explained that once the
SIP was put out, it would require substantial coordination
to make sure there was ample interaction with residents
regarding potential impacts and bringing stakeholders
together to discuss impacts on utilities. She questioned
the meaning of the following sentence included in the
intent language: "Submit a Serious State Implementation
Plan (SIP) as quickly as possible that includes
sufficiently stringent Best Available Control
Technologies." She was concerned it would push more
stringent regulations on the district. She noted that the
borough was large, but North Pole was experiencing the
issues due to its geographic location in a valley. She
elaborated that the population was larger than its airshed
could handle. She questioned how to handle the problem and
wondered if the community should use electrostatic
precipitators that removed 85 percent of the PM 2.5. She
stressed there were numerous factors involved.
Co-Chair Wilson believed the intent language would
micromanage the department - she believed the department
was doing all it could. She understood the representative
who had included the intent language was not intending to
do harm. She characterized her portion of the district as
the "triangle of death" in regard to air quality issues.
11:59:34 AM
Vice-Chair Johnston remarked on Fairbanks' unique
environment and the substantial influx of [federal]
Department of Defense (DOD) funding. She elaborated that
DOD's investment depended a lot on the air quality. She
believed Fairbanks would work hard to avoid the loss of DOD
influx. She thought the amendment would allow Fairbanks,
the state, and the federal government to develop alignment
in order for DOD to expand in Fairbanks to improve the air
quality. She furthered that the work would mean the
economic impact would not be driven to a crisis point where
everything fell apart. She trusted the community for the
greater good.
12:00:59 PM
AT EASE
12:01:55 PM
RECONVENED
Representative LeBon stated that his district was in the
center of Fairbanks and did not have quite as many wood
burners as other areas in surrounding districts; however,
the issue was the top priority in the community. Everyone
in Fairbanks was concerned with the need to improve the
community's air quality. He emphasized that residents all
wanted to breathe clean air. He elaborated that DEC, the
Fairbanks North Star Borough, the City of North Pole, and
the EPA were all together at the table and were making
material progress. He supported the amendment.
12:02:48 PM
AT EASE
12:02:57 PM
RECONVENED
Co-Chair Wilson communicated she had erroneously thought
the maker of the intent language [inserted during the
subcommittee process] supported her amendment; she
clarified the maker of the intent language wanted to see
the language maintained.
Co-Chair Wilson provided wrap up on the amendment. She
shared that she had been working with the issue for nine
years and was extremely proud of the community. She
disputed claims that her district was the dirtiest place on
Earth. She spoke to the successes of community cooperation
and education on the subject. She recalled in the past
residents chopping wood in September/October to burn the
following month. She clarified that it could take a year
for wood to dry out for burning. Since work on the issue
had begun, woodsheds had sprung up throughout the district
to store wood for the following year.
Co-Chair Wilson believed the intent language could mean
pushing DEC in a way that would prevent it from bringing
the community along. She was concerned that when the
borough had started fining residents $500 for trying to
heat their homes, people had begun losing faith in the
community. She emphasized the worst scenario would be
residents losing faith in the situation and starting to cut
wood just beforehand (and burning things they probably
should not burn) as they had in the past. The community had
been blessed that oil prices had been lower than ever
before. She continued that the community may eventually
have natural gas, which was part of the solution. The other
part of the solution was wind, but she did not want wind
when temperatures were negative 44 degrees [Fahrenheit].
Co-Chair Wilson communicated her support for her community
and the desire for a community solution. She wanted to
ensure DEC moved forward with a realistic, attainable plan.
She did not support a plan that did not work or that
involved pollution control devices by GVEA [Golden Valley
Electric Association] or Aurora [Energy, LLC], which
increased the cost of electricity. Additionally, food cost
would increase because private industry would have to pass
electricity costs off to someone. She stressed that if the
solution was not done right, it would mean people would
burn more wood and put more stoves in. She explained that
if oil prices increased to past prices (above $3 per
gallon) the issue came down to whether a family could feed
their children, purchase needed medication, and heat their
home. She underscored that it was very beneficial when
electricity went off that residents could continue to keep
their homes warm.
Co-Chair Wilson was frustrated that the EPA put stoves on
the market that hurt the community from meeting standards.
She explained that the EPA did not understand that the
region only had Birch and Spruce available for burning. She
emphasized the community was underneath a cloud that was
not the fault of Fairbanks residents. She did not want to
send a message that the legislature could micromanage
better than the organizations in the community working with
DEC. She appreciated her counterpart's action, but she
thought it implied that all of the work done by her
constituents would never be enough. She could not afford
the message to go forward because she needed the
cooperation of residents to move ahead. She asked the
committee to have faith in the department.
12:08:27 PM
Vice-Chair Ortiz WITHDREW his OBJECTION.
Representative Josephson recognized he knew less about the
issue than Fairbanks residents. He pointed out that
sometimes things were just exceptionally difficult. He
understood they were difficult at present. He thought is
colleague from Gold Stream Valley had written the intent
language for a reason, but he could see the will of the
committee and would not object.
There being NO further OBJECTION, Amendment H DEC 8 was
ADOPTED.
Co-Chair Foster relayed the committee would take a one-hour
lunch and begin with the Department of Fish and Game (DFG)
amendments upon resuming.
12:09:53 PM
RECESSED
1:35:35 PM
RECONVENED
Co-Chair Foster explained that the committee would return
to items that had been set aside the previous day.
Co-Chair Wilson WITHDREW Amendment LS 1, 31-GH1905\R.11
(Bruce 3/30/19) (copy on file). She explained it had come
to her attention that although students were able to
utilize the pool, there were still safety issues that
needed to be addressed before the pool could be opened to
the public. She elaborated that without opening to the
public, the pool would not be able to get the General Fund
program [receipts] that had been previously discussed by
the committee.
1:36:49 PM
Co-Chair Wilson asked to hear Amendment H DOC 7.
Co-Chair Foster directed members to the appropriate page
number. He noted that the previous day questions had arisen
related to the amendment and they had held it.
Representative Josephson MOVED to ADOPT Amendment H DOC 7
(copy on file):
DEPARTMENT: Corrections
APPROPRIATION: Population Management
ALLOCATION: Institution Director's Office
ADD: $13,551.5 UGF (1004), Services
EXPLANATION: Partially restore Population Management
to allow department to absorb cuts on a glide path.
This amount is 50% of the indirect costs included in
the House Finance Subcommittee's reduction to
Population Management.
Co-Chair Wilson OBJECTED for discussion.
Representative Josephson reviewed the amendment. He shared
that he had not sat on the Department of Corrections (DOC)
subcommittee and was new to the DOC budget. He detailed
that the governor had proposed a $30 million unallocated
cut to DOC and was planning to close the Wildwood
Correctional Center located in the Kenai/Soldotna area. He
had been told that Wildwood functioned well and was one of
the better prisons. The governor's proposal would also move
500 inmates out of state, which was a policy that had
changed in the past under the theory that Alaskans should
take care of their own business and it was better for
prisoners to be closer to family and their own social
structure. The subcommittee had elected to substantially
cut the population management appropriation and put funds
into new appropriations for electronic monitoring (EM) and
community residential centers (CRC). He did not want to
rush people out of confinement into CRCs and onto EM if
they were not ready. He thought it was necessary to be
careful about EM because individuals received day-for-day
credit. He pointed to the Schneider case as an example
where the EM credit had been given pretrial and
presentencing. He detailed that Mr. Schneider received
credit for time served presentencing under a bill in 2015,
which he opposed (he noted he had been one of the three
opponents of the bill). He thought the judge had been
unfairly treated in the [Schneider] case because he had
limited options.
Representative Josephson had concerns about CRCs and EM,
unless DOC, in its wisdom, using Title 22 (regulations) or
Title 33 (statutes) makes wise decisions. He believed the
regulations and statutes constrained the department
relatively wisely. He agreed with the subcommittee that the
proposal by the governor to close Wildwood and send
prisoners out of state, was not good policy. He noted there
was some belief that if part of the cuts to population
management were restored that "those things may not
happen." He had concerns there was a lack of certainty
about the impact. He could not guarantee that prisoners
would not be transferred and that prisons would not be
shuttered. The calculation of $13.5 million had been
reached by looking at the average daily rate and fixed
costs. He elaborated that the calculation used a multiplier
and divided by 2 to reach a midrange value of $13.5
million.
1:43:01 PM
Co-Chair Wilson clarified that the Schneider case was under
pretrial. She explained it was not a part of EM that was
being spoken to; the rules were different for those on
probation and parole. She did not want to confuse pretrial
with those on probation and parole after they had completed
their sentence.
Representative Knopp MOVED to ADOPT Conceptual Amendment 1
to Amendment H DOC 7.
Co-Chair Wilson OBJECTED for discussion.
Representative Knopp explained the amendment would remove
out of state contractual allocations from the property
management component and would create a new line item for
appropriation. He detailed that the same money would be
transferred to the appropriation. The amendment addressed
Representative Josephson's concerns about how the state
managed its populations. He elaborated that if the
administration decided to move prisoners out of state it
would be required to come to the legislature for an
appropriation. He reported it would address Co-Chair
Wilson's concerns about contracts the legislature had not
seen but was asked to ratify. The administration would have
to come to the legislature to explain the details of an RFQ
[request for quotation] or RFP [request for proposal] for a
supplemental appropriation if necessary.
Representative Knopp explained that the amendment would
help manage the [prison] population and gave the
legislature input on whether it was wise to move inmates
out of state or not. The goal of the conceptual amendment
was to remove the contractual language, services and
allocation to population management, and create a new
appropriation $300,000. The amendment would transfer the
money already allocated to the line item. The amendment
aligned with and enforced intent language on page 7 of the
budget document specifying the legislature's intent for
inmates to be housed in-state.
1:45:32 PM
Representative Carpenter asked for clarification on where
money was coming from.
Representative Knopp replied the money was already in DOC's
budget under the population management allocation. The
conceptual amendment would leave the money in the budget
but moved it to an appropriation. He explained the change
meant the department would have to use the money for
contractual services. The amendment would not add any
additional money and would not take anything from general
funds.
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Conceptual Amendment 1 to
Amendment H DOC 7 was ADOPTED.
1:47:01 PM
Co-Chair Wilson thanked Representative Josephson for his
work on the amendment. She remarked on the difficulty of
the work without having all of the needed numbers; however,
she believed the compromise made would send a good message
to the administration that it was not only the subcommittee
that was against sending Alaskans out of state. She
believed the lesson had been learned the last time
[prisoners had been sent out of state]. She appreciated the
conceptual amendment offered by Representative Knopp. She
reiterated her thanks to Representative Josephson and
stressed it was a compromise. She did not want to rush the
program - she wanted to make sure that if inmates could go
to halfway houses and then onto EM, that it would be done
with thoughtfulness and by following regulation and
statute. The goal was to ensure a step-down mode for
Alaskans that would help Alaskans get back on their feet
after being released from jail. She hoped that recidivism
would not revert back to 67 percent [as it had been in the
past]. She did not want more Alaskans to be violated
because the legislature/state could not get their act
together. She believed the amendment provided a strong
message to the department that the way things had been
going was not working. When prisoners had been sent out of
state in the past, they had come back worse off than when
they left. She expressed appreciation for the work.
Representative Carpenter stated it was no surprise to any
Alaskan the state's criminal justice system was broken. He
elaborated that the criminal justice process involved
multiple departments including the Department of Public
Safety, the Alaska Court System, the Department of Health
and Social Services, and DOC. He spoke to the difficulty of
addressing the problem. One of the things that the state
needed to do was to keep people who needed to stay in
prison, in prison. He clarified that the intent was not to
move people into CRCs or EM through political shenanigans.
He stated that only the individuals who by their
constitutional right to reformation were choosing to reform
themselves based on a list of requirements specified by the
prison system. He believed that only under those
circumstances did people warrant going to a CRC or onto EM.
He furthered it had been the intent, but due to politics it
had not happened. He explained that the legislature was
trying to fix the problem.
Representative Carpenter understood that the amendment tied
the administration's hands in some ways, but the people
were tired of having criminals only get "slaps on the
hand." He believed most of the pain being felt derived from
presentenced people being released. The amendment did not
pertain to that group. He continued that it would still be
a problem that the legislature needed to work towards
solving. The amendment addressed one component of the issue
and he believed the fix was worthwhile.
1:51:04 PM
Representative Sullivan-Leonard appreciated the compromise.
Her hopes had been that funding would go back into
population management. She believed that SB 91 [crime
reform legislation passed in 2016] had proven that
criminals needed to be behind bars. She continued there was
a failed system under SB 91 with the CRC and EM system;
even though a certain amount of money was going back into
population management, she hoped the funds in CRC and EM
would be a key piece in helping former inmates reintegrate
into society as rehabilitated, productive citizens. She
appreciated the compromise and emphasized that criminals
who offended would be put behind bars.
Co-Chair Wilson WITHDREW her OBJECTION to Amendment H DOC 7
as AMENDED.
Representative Josephson clarified there had been a comment
that the individuals the amendment applied to would be on
parole and probation. He did not believe that was accurate.
He explained that individuals on parole or probation were
not typically in a halfway house. He supposed being in a
halfway house could be a condition of probation or parole.
He stated that typically the individuals were in custody
for credit for time served. He wanted to ensure the
legislature was making the changes soberly. He took comfort
there would be some custodial time before the movement to
CRCs and halfway houses. He noted that if an individual did
not qualify, they did not qualify, and he would ask that
the department come back to the legislature for a
supplemental.
1:53:51 PM
Co-Chair Wilson clarified there were two programs. The
pretrial program (under its own allocation) involving
unsentenced individuals was not under discussion. The
amendment applied to individuals who had been sentenced to
jailtime. She elaborated that if an individual got within
two to three years of release, they would normally go to a
halfway house as part of the transition towards their
release date. She explained that the courts could require
an individual to go on EM if they were unsure the
individual needed continued supervision. The point of the
amendment was to keep Alaskans in-state, to punish
individuals who committed crimes, and once individuals were
released there would be programs available to make their
reentry successful and reduce the number of victims.
There being NO further OBJECTION, Amendment H DOC 7 was
ADOPTED as AMENDED.
1:55:53 PM
Co-Chair Wilson MOVED to RESCIND the adoption of H DOE 5
related to Pre-K grants totaling $2 million [see 9:33 a.m.
for detail].
Representative Carpenter OBJECTED.
Co-Chair Wilson stated that during the break she had
learned more information about where the grants were going.
She relayed that the grants were going to Pre-K programs 4-
5-year-olds in areas that were part of the Moore settlement
in order for kids to get a head start in life. She
elaborated that the communities receiving the grants did
not have the Head Start program or other types of Pre-K.
She stated that the grants under discussion were different
than Pre-K grants because 4-5-year-olds were receiving the
services in areas with challenging test scores.
Co-Chair Foster clarified the motion before the committee
was to rescind action taken on Amendment H DOE 5, which
would remove $2 million from Pre-K grants.
Representative Carpenter noted there had been a thorough
discussion on the issue earlier in the day. He stated there
had been agreement to prioritize things that were necessary
and required, given the current fiscal climate. He believed
the item was not necessary or required. He thought it was a
false statement 4-5-year-olds would only get educated if
the $2 million was spent. He opined it was necessary to
learn not to look to the state for the funds to solve the
problem of educating kids. He stated using the funds meant
taking the PFDs from other kids to pay for it.
1:59:20 PM
Vice-Chair Johnston shared she had been on the House
Education Committee the previous year. She remarked that
the committee had passed legislation [in 2018] to implement
more measured outcomes that had not been there in the past.
As a result, she felt better about the grants than she had
in the past. She supported the motion.
Representative Sullivan-Leonard was curious about what the
grants were. She stated the committee had decided on the
issue previously. She wondered where the legislature would
be at the end of the operating budget process if it could
not even reduce the budget by barely $2 million. She
stressed the legislature could not continue to consider the
grants for passage. She believed people were approving the
funds based on emotion, not fact. She opined there were no
facts that the grants would help prepare children for
school. She did not support the motion.
Representative Knopp asked if the committee was currently
debating the motion to rescind [Amendment H DOE 5].
Co-Chair Foster clarified the committee was addressing the
motion to rescind [its earlier action].
2:01:06 PM
AT EASE
2:02:22 PM
RECONVENED
Co-Chair Foster requested a vote on the motion to rescind
action on Amendment H DOE 5.
Representative Carpenter MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Johnston, Knopp, LeBon, Ortiz, Wilson,
Foster
OPPOSED: Merrick, Sullivan-Leonard, Tilton, Carpenter
The MOTION to RESCIND action on Amendment H DOE 5 PASSED
(7/4). There being NO further OBJECTION, it was so ordered.
Co-Chair Wilson addressed Amendment H DOE 5. She reported
that during the [lunch] break she had been able to
determine where some of the grants went. She disagreed with
the sentiment that children who received the PFD would not
want to give to children who were less fortunate and may
not have as much opportunity. Additionally, she disagreed
with the statement that all programs were treated the same.
She underscored that all programs were not the same. She
reported there was another program for $1.2 million. The
program under discussion (costing $2 million) had been done
as a pilot project approximately eight years earlier. She
elaborated it had been kept as a pilot program because the
legislature was not receiving the answers on whether the
children were getting anything out of the program.
Co-Chair Wilson clarified she was not going to speak to all
Pre-K programs because each program was done differently
with different types of resources. She emphasized that the
grants under discussion were monitored - the children were
tested before, during, and after the program (all the way
into Kindergarten) to determine the program's success. She
explained it was a competitive grant program; therefore, if
a program was not getting the results the Department of
Education and Early Development (DEED) expected, it was
likely the program would not continue to receive the grant.
The funding was not automatic - testing and parameters were
in place. She detailed that the information was recorded by
DEED to determine results. She reiterated that the grants
went to some of the state's less fortunate areas without
the same resources as some urban areas. She cautioned
against teaching children it was not important to take care
of those who may need a little extra that unfortunately
they did not have.
2:05:30 PM
Co-Chair Foster believed the $2 million had been in the
prior year's budget; if the funds were not removed it would
be flat funding of the grants. He pointed out they were not
increasing funds to the program.
Representative Carpenter stated that in a year where
revenues did not match expenditures, it was necessary to
make tough decisions. He appreciated the opportunity to
contrast what could be done with additional resources
coming from the pockets of residents. He stated that "our
children will not have the opportunity to give to the less
fortunate" because the current generation would already
have made the decision for them by taking their PFD. He
furthered that in doing so, it implied that current leaders
knew best how to spend the money coming from the investment
earnings of the Permanent Fund. He believed it was a
fundamental problem. He reasoned they were teaching kids to
look to the state to solve "our problems." He continued
that the lesson being taught was to grow the state.
Representative LeBon shared that based upon information
provided by Co-Chair Wilson he would reverse his vote on
Amendment H DOE 5. He supported the Pre-K grant program.
Representative Knopp gave kudos to Co-Chair Wilson for the
information she had provided on the program. He pointed to
the value of the information on the competitive nature of
the prescreening process [by the department]. He stated
that the more information the committee had about how
programs worked made it easier to support or oppose
something.
Representative Sullivan-Leonard did not believe there was
sufficient information on the grant program to vote on the
issue. She furthered it was a $2 million grant going to
particular Pre-K programs throughout the state, but she had
no indication who the recipients were. She questioned
whether the grants went through Head Start or another
educational program. She did not believe the state should
currently be giving $2 million grants given its state of
fiscal crisis. She did not support the funding.
Representative Josephson countered that he did not believe
the state was in fiscal crisis. He believed Alaska was a
very fortunate state and people. He detailed the state had
no broad-based tax and provided a Permanent Fund Dividend
to residents. While the state had a deficit on paper, it
was imperative to have revenue to cover its expenses. He
stated it was guaranteed there would be revenue to cover
the state's expenses. He addressed the topic of children's
choices and believed it was counterintuitive to say the
amendment to restore [Pre-K] funds somehow ran counter to
helping children and their choices.
Representative Tilton understood the program was important
to someone and clarified the amendment did not pass
judgement on the program. She highlighted that the grants
had been created eight years earlier when the state had
been in a different fiscal situation. She believed it was
necessary to reduce the budget given the state's budget.
She considered that despite the good the program may be
doing, it was necessary to look at the fiscal situation and
make hard decisions.
Co-Chair Wilson clarified that the money was not affiliated
with Head Start. She detailed that the grant recipient
information was available online - the funding moved around
depending on the need. She referred to comments that
providing the funds was not the state's responsibility and
that government should not be doing education. She stated
that it was in the Alaska Constitution for a reason. She
continued that not all things were included in the
constitution [as funding requirements]. The funds would go
towards 4-5-year-olds going to school. She stressed that
sometimes there were programs that rose to the top as long
as parameters were applied. She detailed that the funds
went towards providing a service to less fortunate children
with fewer resources.
Co-Chair Wilson continued it was the state's responsibility
to ensure the children were getting the help they needed
and that outcomes could be measured. She highlighted that
when the program had been implemented eight years back, it
was supposed to grow from $2 million per year to $10
million per year over time. She noted it had not grown to
$10 million. She believed it showed the legislature's
diligence to work with the program and ensure it was
working. She noted that instead of making communities
dependent on the funds, the grants moved from place to
place to help locations get started.
2:12:41 PM
AT EASE
2:13:01 PM
RECONVENED
Co-Chair Foster clarified the motion being considered by
the committee. The amendment would cut $2 million from Pre-
K.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter
OPPOSED: Johnston, Knopp, LeBon, Ortiz, Josephson, Wilson,
Foster
The MOTION to adopt Amendment H DOE 5 FAILED (4/7). [Note:
this roll call was voided at 2:15 p.m. and a second roll
call was taken for clarity.]
2:14:47 PM
AT EASE
2:15:22 PM
RECONVENED
Co-Chair Foster VOIDED previous action.
A roll call vote was taken on the motion to adopt Amendment
H DOE 5.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter
OPPOSED: Knopp, LeBon, Ortiz, Josephson, Johnston, Wilson,
Foster
The MOTION to adopt Amendment H DOE 5 FAILED (4/7).
Representative Merrick asked if a committee member could
move to rescind a previous vote at any time during the
amendment process.
Co-Chair Wilson replied in the affirmative and clarified
that action on an amendment could only be rescinded one
time.
Representative Josephson Representative Josephson
communicated that he did not intend to offer Amendment H
DOC 5 (copy on file).
2:16:55 PM
AT EASE
2:19:27 PM
RECONVENED
Representative Carpenter MOVED to ADOPT Amendment H DFG 1
(copy on file):
Commercial Fisheries
Southeast Region Fisheries Management
H DFG 1 - 50% reduction to travel
Restores FY20 GOV Amend reduction to travel.
1002 Fed Rcpts (Fed) -26.9
1003 GF/Match (UGF) -1.5
1004 Gen Fund (UGF} -51.5
1007 I/A Rcpts (Other) -1.5
1024 Fish/Game (Other) -3.3
1108 Stat Oesig (Other) -7.4
1109 Test Fish (DGF) -7.2
1201 CFEC Rcpts (DGF) -2.4
Vice-Chair Ortiz OBJECTED.
Representative Carpenter reviewed the amendment. The
amendment reflected a reduction of $101,000 to the
Department of Fish and Game (DFG) travel budget as proposed
in the governor's budget. He elaborated the department was
taking a hard look at how it organized and developed its
travel budget. He communicated DFG believed it could reduce
its travel footprint and have the flexibility to move other
line items if needed.
Representative Knopp thought the amendment should be taken
up after the other Amendments H DFG 2, 3, 4, and 5. He
explained that if those amendments were adopted the
fisheries management would be eliminated and Amendment H
DFG 1 would be unnecessary.
Co-Chair Wilson OBJECTED.
2:20:59 PM
AT EASE
2:25:18 PM
RECONVENED
Representative Carpenter WITHDREW Amendment H DFG 1 pending
several other amendments [note: the amendment was offered
again at 2:40 p.m.].
Representative Carpenter MOVED to ADOPT Amendments H DFG 2,
3, 4, and 5 (copy on file):
Commercial Fisheries
H DFG 2 - Reduce Funding for Southeast
Region Fisheries Management
Reduce funding for surveys and assessments in the
Southeast Region Fisheries Management.
1004 Gen Fund (UGF) -257.8
Commercial Fisheries
Central Region Fisheries Management
H DFG 3 - Central Region Fisheries Management
Reduction
Delete funding for Central Region Fisheries
Management.
1004 Gen Fund (UGF) -239.2
Commercial Fisheries
AYK Region Fisheries Management
H DFG 4 - AYK Region Fisheries Management Reduction
Reduce Funding for Fisheries Management
1004 Gen Fund (UGF) -300.0
Commercial Fisheries
Westward Region Fisheries Management
H DFG 5 - Westward Region Fisheries Management
Reduction
Reduce funding for surveys and assessments.
1004 Gen Fund (UGF) -200.00
Co-Chair Wilson OBJECTED for discussion.
Representative Carpenter reviewed the amendments that would
cut approximately $1 million from the General Fund. He
reported that the previous fiscal year funding for the
select projects had been added as an increment during the
budget process. He elaborated that the projects had been
funded with the Charter Revolving Loan Fund. He stated that
the fund source was not sustainable and had been
decremented from the governor's amended budget. He relayed
the funding had been added by the finance subcommittee. He
did not believe the projects rose to a priority level that
warranted continuation.
Representative Carpenter shared that the four fisheries
management components that received an increment were the
Southeast region, Central region, AYK region, and Westward
region. The amendment would result in a decrement of
$239,000 for the Central region, $257,000 to the Southeast
region, $300,000 to the AYK region, and $200,000 to the
Westward region.
Vice-Chair Ortiz spoke to his opposition to the amendments.
He detailed that when he had started with the legislature
the Department of Fish and Game had the reputation of being
the best at developing policies that resulted in the best
overall management of fisheries resources. He elaborated
that the success required investment. He pointed to the
vast Alaska coastline and explained it was not a cheap
venture to conduct the management. He stressed that UGF
resources going into fish and game management was down 35
percent since 2015, which did not include the proposed
amendments. He explained a reduction in resources meant the
department could not move forward with projects, aerial
surveys, and projects used to promote the management of the
state's resources.
Vice-Chair Ortiz reported that DFG was constitutionally
mandated to manage the state's resources to the maximum
sustainable yield. He elaborated that fishermen were
allowed to catch the maximum amount possible without
endangering the future fish resource. He stressed the
importance of the task. The fishing industry was a $6
billion per year industry and was the second leading job
provider in the state. He underscored the fishing industry
was the number one economic driver in his district. He
spoke to the importance of fisheries management in terms of
future sustainability of the resource. When the funds for
management were reduced it meant DFG could not conduct
surveys or assessments. If the department did not get the
information it had to manage on a more conservative basis,
meaning it had to reduce the allowable catch for fishermen.
The projects had been added in the subcommittee in the past
session and were all intended to create more opportunity
for fishermen statewide in order to produce more revenue
for themselves, crew, and the economy.
2:33:16 PM
Vice-Chair Ortiz continued to address the reason for the
projects. The funds had been put forward as UGF in the past
legislative session and the other legislative body had
changed the fund source to a one-time payment from the
Commercial Charter Fisheries Revolving Loan Fund. He
explained the fund source had been expended. He explained
that putting the funds in the budget was not an addition
from the House side to UGF resources. He stressed that
adopting the amendments would prevent the department from
conducting valuable projects and potentially disallow
fishermen from catching the maximum sustainable yield. He
provided an example with a written statement:
If these funds were cut, the otolith program measures
stock harvest composition of hatchery and wild salmon.
It's an invaluable tool for in-season management and
research. The Commercial Fisheries Division receives a
positive return on investment in funding these
projects that will lead directly to increased revenue
for our fishermen, local communities, and the state.
Conversely, without this data the department will
manage more conservatively, resulting in decreased
revenue for our fishermen, local communities, and the
state.
Vice-Chair Ortiz explained the information was one example
of one project. He noted that the otolith came from a
fish's ear and provided information about where the fish
came from, whether it was a hatchery or wild fish, and
other detail.
Representative Knopp agreed with sentiments expressed by
Vice-Chair Ortiz. He stressed there was no greater natural
resource for the state [than fisheries]. He referenced the
constitutionality of having to manage the state's fisheries
for greater sustainable yield. He found the idea of not
managing the state's fisheries unconscionable. He
specifically addressed Amendment H DFG 3 and pointed out
that funding would be deleted entirely for the [Central]
region, whereas funding was reduced for other regions in
the separate amendments. He stressed there was likely no
more important region to manage.
Representative Knopp referenced the coded wire tag program
that allowed the department to distinguish hatchery versus
wild wish. He highlighted that the hatchery pink salmon
return had saved commercial fishermen in Prince William
Sound the previous season. Additionally, the amendments
would cut out the weir operational times. He explained that
weirs were perhaps the most critical tool for assessing
escapement for in-season management. He stressed that
without the tools the department would have to manage more
conservatively, and great opportunities would be missed for
commercial and sport fishing. He questioned how it would be
possible to not manage fisheries across the state including
Unalaska, Bristol Bay, Cook Inlet, and Prince William
Sound. He found the amendments unsettling, particularly due
to the importance of the fishing industry in Alaska. He
remarked the state spent more on the Department of Natural
Resources and oil and gas surveys.
2:37:50 PM
Vice-Chair Ortiz MAINTAINED his OBJECTION.
Representative Carpenter provided wrap up on the
amendments. He noted the legislature had a reputation for
being unable to control state spending. He stressed it was
one of the big factors responsible for slowing Alaska's
economic growth. He believed the reduction was necessary to
avoid putting the state's future fiscal condition at risk.
He noted an argument could be made for keeping every state
funded program. He underscored the importance of keeping
the bigger picture in mind. He stated that if the budget
was not cut to an affordable level and Permanent Fund
savings were used, the state would be left to increase
taxes. He made a distinction between funding what was
necessary versus funding what was wanted. He supported
funding what was necessary.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter
OPPOSED: LeBon, Ortiz, Josephson, Johnston, Knopp, Wilson,
Foster
The MOTION to adopt Amendments H DFG 2, 3, 4, and 5 FAILED
(4/7).
2:40:06 PM
Representative Carpenter MOVED to ADOPT Amendment H DFG 1
(copy on file):
Commercial Fisheries
Southeast Region Fisheries Management
H DFG 1 - 50% reduction to travel
Restores FY20 GOV Amend reduction to travel.
1002 Fed Rcpts (Fed) -26.9
1003 GF/Match (UGF) -1.5
1004 Gen Fund (UGF} -51.5
1007 I/A Rcpts (Other) -1.5
1024 Fish/Game (Other) -3.3
1108 Stat Oesig (Other) -7.4
1109 Test Fish (DGF) -7.2
1201 CFEC Rcpts (DGF) -2.4
Co-Chair Wilson OBJECTED for discussion.
Representative Carpenter stated the amendment was a 50
percent travel reduction [to DFG], which he believed was
necessary.
Representative Knopp opposed the amendment. He reported the
proposal had been made to the DFG subcommittee and had been
rejected. He remarked on the committee's decision to
support fisheries management and believed it was
appropriate to leave the funding for travel in place.
Co-Chair Wilson clarified that a 50 percent reduction to
travel was not a 50 percent reduction to each division; the
reduction was 50 percent to the entire department. She
requested a breakout of the reduction per division.
Vice-Chair Ortiz asked for clarification. He stated the 50
percent travel reduction fell under the category of
Southeast region fisheries management. He asked if the 50
percent reduction was specific to the Southeast region.
2:41:47 PM
AT EASE
2:46:16 PM
RECONVENED
Representative Carpenter replied the reduction was specific
to the Southeast region fisheries management. He clarified
it had not been his intent to single out the specific
region. He detailed that the subcommittee did not approve
any of the travel reductions. He explained it was an error
to only focus on one fisheries management region;
therefore, he WITHDREW Amendment H DFG 1.
2:47:16 PM
AT EASE
2:47:54 PM
RECONVENED
Vice-Chair Ortiz MOVED to ADOPT Amendment DFG 6 (copy on
file):
Wildlife Conservation
H DFG 6 - Add Fish and Game Fund Authority to Provide
Match for Pittman-Robertson Funds
Fish and Game fund authority is provided exclusively
for the purpose of matching Federal Pittman-Robertson
(P-R) funds and establishing sufficient safety margin
for the department so as to avoid reversion of P-R
funds in future years.
1024 Fish/Game (Other) 200.0
Co-Chair Wilson OBJECTED for discussion.
Vice-Chair Ortiz reviewed the amendment that would allow
DFG to take better advantage of full federal Pittman-
Robertson funds for wildlife management and conservation.
He read from a prepared statement:
Fish and Game's fund authority is provided exclusively
for the purpose of matching federal Pittman-Robertson
funds and establishing a sufficient safety margin for
the department so as to avoid reversion of Pittman-
Robertson funds in future years. Providing an
additional $200,000 brings the total match up to $1
million fish and game, which allows the department to
leverage $3 million in Pittman-Robertson funds. This
means that the department will not be turning away any
money this year and will establish a small $200,000
safety margin. While this prevents the department from
turning away federal fiscal year 19 funds that would
have otherwise expired in fiscal year FY 20, they have
two years to obligate funds. Fiscal year runs from
October 1 through September 30.
Representative Sullivan-Leonard asked for detail on
Pittman-Robertson funds.
Vice-Chair Ortiz replied that he was not the best person to
explain the funds. He detailed that Pittman-Robertson funds
were used to help DFG manage the state's wildlife resources
more effectively throughout the state.
2:50:44 PM
Vice-Chair Johnston recalled that the federal funds were
derived from a fee charged on ammunition purchases. She
believed the money went back to the state - she noted it
was not a UGF fund. The funds were used for things like
hunting safety and bear management. She stated it was a
shame to leave federal receipts on the table.
Vice-Chair Ortiz added that accessing the funds had the
full support of the guiding and hunting lodge industry. He
noted the issue was more relevant to the Interior than
Southeast.
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment H DFG 6 was
ADOPTED.
2:52:29 PM
Vice-Chair Ortiz MOVED to ADOPT Amendment DFG 7 (copy on
file):
STRUCTURAL CHANGE:
New Structure:
DEPARTMENT: Fish and Game
APPROPRIATION: Habitat
ALLOCATION: Habitat
Existing Structure:
DEPARTMENT: Fish and Game
APPROPRIATION: Statewide Support Services
ALLOCATION: Habitat
EXPLANATION: The Division of Habitat is moved into
its own appropriation to prevent funds from being
moved outside of this program.
Co-Chair Wilson OBJECTED for discussion.
Vice-Chair Ortiz reported that currently the DFG budget was
set up with four appropriations including commercial
fisheries, sport fish, wildlife conservation, and statewide
support services. He explained that the Division of
Subsistence Research and the Division of Habitat were
housed as allocations under the statewide support service
appropriation. The amendment had no fiscal impact on the
budget. He elaborated that the amendment would create
appropriations instead of allocations for the Division of
Subsistence Research and the Division of Habitat just like
the other DFG divisions.
Representative Josephson asked what concern the sponsor had
that monies could be moved from the allocations for
programs outside their purpose.
Vice-Chair Ortiz answered that as funding adjustments to
all agencies moved forward the amendment was to ensure that
there would be no move away from subsistence management and
wildlife conservation.
Representative Tilton asked if the issue had been discussed
in the subcommittee process.
Vice-Chair Ortiz explained there had been significant
discussion about a variety of other things, but the
subcommittee had spoken about the particular topic at some
level.
2:55:07 PM
Representative Sullivan-Leonard asked if the amendment was
in response to a request by the administration for habitat
to have its own division.
Vice-Chair Ortiz answered that he could not say
definitively that the amendment was a request of the
administration. The amendment was in response to the intent
of the subcommittee to ensure that the state did not ignore
the issue of subsistence and wildlife conservation. He
added that subsistence was a substantial issue for rural
communities throughout the state.
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment H DFG 7 was
ADOPTED.
2:56:21 PM
AT EASE
3:01:02 PM
RECONVENED
Vice-Chair Ortiz MOVED to ADOPT Amendment DFG 8 (copy on
file):
STRUCTURAL CHANGE:
New Structure:
DEPARTMENT: Fish and Game
APPROPRIATION: State Subsistence Research
ALLOCATION: State Subsistence Research
Existing Structure:
DEPARTMENT: Fish and Game
APPROPRIATION: Statewide Support Services
ALLOCATION: State Subsistence Research
EXPLANATION: The Subsistence Division is moved into
its own appropriation to prevent funds from being
moved outside of this program.
Co-Chair Wilson OBJECTED for discussion.
Vice-Chair Ortiz noted that he should have bundled
Amendments 7 and 8. He detailed that the subsistence
portion of his explanation for Amendment H DFG 7 applied to
Amendment H DFG 8; the arguments were the same for both
amendments. The amendment would create a separate
appropriation for the Division of Subsistence Research.
Co-Chair Wilson WITHDREW her OBJECTION. There being NO
further OBJECTION, Amendment H DFG 8 was ADOPTED.
3:02:15 PM
Vice-Chair Ortiz MOVED to ADOPT Amendments H DFG 9 and 10
(copy on file):
Commercial Fisheries
Southeast Region Fisheries Management
Amendment H DFG 9
GA 3/27 United States and Canada Pacific Salmon Treaty
Increased federal receipt authority will cover funding
coming to Alaska due to financial commitments made
between the US and Canada as part of the recently
renegotiated US and Canada Pacific Salmon Treaty Annex
which establishes catch sharing agreements in the
salmon fisheries off of the coasts of Alaska, British
Columbia and the Pacific Northwest states (Washington,
Oregon, and California). Alaska is a significant
harvester of these fish.
The department is a party to this international treaty
to ensure conservation and access to this valuable
resource that is vitally important to the regional
economy of Southeast Alaska. Increased funding to
Alaska is intended to support several in-person
meetings of Treaty stakeholder panels and technical
committees which occur annually to establish pre-
season harvest limits and harvest sharing
arrangements, provide for interagency coordination,
assessment of stock status, and evaluation of
postseason fishery performance in accordance with
Treaty provisions. The incoming grant increment also
pays for fishery stock assessment and management
programs needed to implement the Treaty, as well as
meeting participation and all travel costs.
1002 Fed Rcpts (Fed) 500.0
Sport Fisheries Sport Fisheries
GA 3/27 United States and Canada Pacific Salmon Treaty
Amendment H DFG 10
Increased federal receipt authority will cover funding
coming to Alaska due to financial commitments made
between the US and Canada as part of the recently
renegotiated US and Canada Pacific Salmon Treaty Annex
which establishes catch sharing agreements in the
salmon fisheries off of the coasts of Alaska, British
Columbia and the Pacific Northwest states (Washington,
Oregon, and California). Alaska is a significant
harvester of these fish.
The department is a party to this international treaty
to ensure conservation and access to this valuable
resource that is vitally important to the regional
economy of Southeast Alaska. Increased funding to
Alaska is intended to support several in-person
meetings of Treaty stakeholder panels and technical
committees which occur annually to establish pre-
season harvest limits and harvest sharing
arrangements, provide for interagency coordination,
assessment of stock status, and evaluation of
postseason fishery performance in accordance with
Treaty provisions. The incoming grant increment also
pays for fishery stock assessment and management
programs needed to implement the Treaty, as well as
meeting participation and all travel costs.
1002 Fed Rcpts (Fed) 500.0
Co-Chair Wilson OBJECTED for discussion.
Vice-Chair Ortiz reviewed the amendments that had been
requested by the governor. The amendments would include a
$500,000 increment in federal receipt authority for
Southeast commercial fisheries management and $500,000 in
federal receipt authority for sports fish management. He
elaborated the money was from the federal government to
meet the Pacific Salmon Treaty obligations.
Co-Chair Foster surmised the amendments were at the request
of the governor.
Vice-Chair Ortiz agreed.
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendments H DFG 9 and 10
were ADOPTED.
3:03:28 PM
Co-Chair Wilson MOVED to ADOPT Amendment H GOV 1 (copy on
file):
Commissions/Special Offices Human Rights Commission
Agency: Office of the Governor
H GOV 1 - Reduce Field Representatives
The Human Rights Commission currently has 9 Field
Representatives. This would decrease 3 of 9 positions
all located in Anchorage.
1004 Gen Fund (UGF) -371.2
Representative Josephson OBJECTED.
Co-Chair Wilson reviewed the amendment. The amendment was
in response to her frustration about a recent incident. She
explained that an individual from the Human Rights
Commission had put their business card on a vehicle in
response to a bumper sticker they opposed. She thought if
the individual had that much time to take such an action,
perhaps the commission did not need all of the money it
had. She hoped there was further investigation going on
within the commission to take care of the incident. She
WITHDREW Amendment H GOV 1.
Co-Chair Wilson MOVED to ADOPT Amendment H GOV 2 (copy on
file):
Office of Management and Budget Office of Management
and Budget
H GOV 2 - Delete two full-time positions.
Delete two new positions in the Office of Management
and Budget.
1004 Gen Fund (UGF) -398.3
Vice-Chair Ortiz OBJECTED for discussion.
Co-Chair Wilson reviewed the amendment. She explained that
the two full-time positions were originally going to be
moved from DFG and put into the Office of the Governor. She
noted the positions would have nothing to do with fishing
and would be under the Office of Management and Budget
(OMB) within the Office of the Governor. She detailed that
the Legislative Finance Division had specified the
positions could not be moved because they would have to be
related to fishing. She elaborated that instead there were
now two new positions and new funding in OMB [proposed by
the administration]. The legislature had been told the new
positions were to create efficiency. She did not know how
adding two new positions to a growing budget would increase
efficiency. The subcommittee had asked if OMB had vacancies
and the answer had been yes. She did not know why two new
positions would be added when one person could do the job.
3:05:46 PM
Representative Sullivan-Leonard asked for more detail on
the positions. She noted that the administrative services
director (ASD) positions had been moved to OMB. She asked
if the positions were part of the ASD move to OMB.
Co-Chair Wilson answered that the positions were a part of
the ASD move from agencies to OMB. She stated the positions
would be directors not tied to any agency.
Representative Sullivan-Leonard noted that previously, the
ASDs had been housed within departments and had performed
operations and accounting work with the commissioner. She
asked if the positions were part of that group that was now
within OMB and their work would be on behalf of the
division. She wondered if they were taking away a component
that would help DFG.
Co-Chair Wilson clarified that the ASD positions now had
two offices - one located in OMB and one in their own
agency. She elaborated that there had been one person in
charge of ASDs and now three positions were being proposed
for some reason. She explained that two positions had been
added to provide oversight to the ASDs. She emphasized the
addition created budget growth.
Representative Carpenter wondered how they were creating
two new administrative directors if no new departments had
been created. He did not understand the shift.
Co-Chair Wilson agreed. She questioned why two positions
were being added when one person had done the job in the
past. She did not think it was efficient to add two new
positions and she did not think there had been discussion
showing the positions were needed. She asked whether
members wanted to give part of the Permanent Fund Dividend
to grow two new positions in the governor's office.
3:08:42 PM
Co-Chair Foster had been under the impression that two
positions were supposed to have been taken from DFG and
added to the governor's office, which would have been an
offset, but he thought the request had been denied. He
believed the two positions had remained in DFG and two new
positions were proposed for OMB.
Co-Chair Wilson affirmed. She explained that taking the DFG
positions related to subsistence and hatcheries would have
required a connection to be maintained to fisheries. She
was glad there were parameters that prevented grabbing PCNs
[position control numbers] from somewhere. She reiterated
the positions were brand new and would mean additional
funding going into the budget.
Vice-Chair Ortiz WITHDREW his OBJECTION.
There being NO further OBJECTION, Amendment H GOV 2 was
ADOPTED.
3:10:21 PM
Representative Knopp MOVED to ADOPT Amendment GOV 3 (copy
on file):
Office of Management and Budget
H GOV 3 - Add intent that OMB remove all AOMs and
Division Op Managers
Wordage:
It is the intent of the legislature that the Office of
Management and Budget submit the FY21 Budget with
decrements that reflect cost-savings and efficiencies
related to the work and operations of all
Administrative Operations Managers and Division
Operations Managers throughout all State
Departments/Agencies; up to the elimination of all
positions identified.
Explanation:
Through review of all Organization Charts and PCNs
under the title of Administrative Operations Manager
and Division Operations Manager, there appears to be
redundancies in responsibilities and operations. It is
the intent of this amendment to hear from the all
departments/divisions as to why they will or will not
seek to retain these positions.
Representative Sullivan-Leonard OBJECTED for discussion.
Representative Knopp reviewed the amendment that would
insert intent language into the budget asking the
administration to look at the positions. He explained that
at the start of the budget process he had seen attempts by
the administration to cost-shift and pull in revenue from
fisheries and oil and gas taxes to achieve a balanced
budget. He had not seen any attempts at looking within
organizations for reductions. He noted that the public had
been asking for a reduction in government. He had reviewed
organizational charts and had found operations and division
managers in the low 70s range across departments. He noted
that in some cases the positions were redundant.
Additionally, in some cases there were no employees below
the managers on the organizational charts. The intent of
the language was to ask the administration to look at the
positions in the next budget cycle to determine whether
reductions could be made.
Representative Knopp recalled that during the past [Frank]
Murkowski administration the deputy director positions had
been eliminated. He explained that much of those positions
had been hired back later in operational manager positions.
He noted that since that time, deputy director positions
had been reinstated. When accounting for the 74 positions
the cost was approximately $13 million to $14 million.
Representative Sullivan-Leonard WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment H GOV 3 was
ADOPTED.
3:12:51 PM
AT EASE
3:27:25 PM
RECONVENED
Co-Chair Foster gave members a few moments to come back
into the room.
Vice-Chair Johnston MOVED to ADOPT Amendment HSS A (copy on
file):
DEPARTMENT: Health and Social Services
APPROPRIATION: Medicaid Services
ALLOCATION: (new) Medicaid Services
STRUCTURE CHANGE TO CONSOLIDATE MEDICAID SERVICES
APPROPRIATION: This amendment adopts the Governor's
proposed structure change to the Medicaid Services
appropriation creating a new Medicaid Services
allocation. This structure change includes the
transfer of the following three allocations with
funding into this new, single allocation:
1. Health Care Medicaid Services
2. Behavioral Health Medicaid Services
3. Senior and Disabilities Medicaid Services
EXPLANATION: This action reflects the Governor's
proposal to consolidate all Medicaid allocations into
one allocation for administrative efficiencies. The
Adult Preventative Dental Medicaid Services allocation
is not included.
Co-Chair Wilson OBJECTED for discussion.
Vice-Chair Johnston reviewed the amendment that would mean
a consolidation of services, which was something the
Department of Health and Social Services (DHSS) had been
considering for some time. She noted the previous
administration had also discussed the idea. She highlighted
a concern that one of the three services would be in
jeopardy if consolidation occurred. She explained that in
discussions with the department and OMB, the amendment
reflected more of an efficiency measure between DHSS and
OMB and less of a consolidation of services. She detailed
it was a consolidation of the budget process.
Vice-Chair Johnston elaborated that in the coming year, the
subcommittees would still be able to determine how much
each of the three services (Health Care Medicaid Services,
Behavioral Health Medicaid Services, Senior and
Disabilities Medicaid Services) cost. She furthered that
none of the services could be cut; they had to be fully
paid according to law and the state's management plan. She
explained that the only way to cut any of the services
would be if the state management plan changed in the
Medicaid reform process. The one other concern was that in
the past there were a couple of years where the legislature
short-funded Medicaid. The services had not received a cut
at that time, but they had been paid late via the
supplemental budget. She underscored that the services were
legally required to be paid according to the management
plan. The amendment did not include the adult preventative
dental Medicaid services because it had been allocated
differently in the subcommittee report.
Representative Tilton thanked the amendment sponsor for
putting the amendment forward. She reported the amendment
would save the department about 2,000 hours annually that
were spent moving transactions back and forth to do cleanup
work. She supported the amendment.
Co-Chair Wilson WITHDREW her OBJECTION.
Representative Josephson OBJECTED. He stated there were
individuals in the senior and disabilities Medicaid
services stakeholder group who had opposed being commingled
- that it was unnecessary and would be detrimental to
individuals. He asked the sponsor to explain why that was
untrue.
Vice-Chair Johnston replied the state legally had to pay
what the state management plan designated the state would
pay. She understood their angst because the last couple of
years the payments had been delayed for all three groups
due to legislative issues. She emphasized that the groups
all had to be made whole. She underscored that the
amendment was not an effort to "pull a fast one." She
explained the amendment would result in allowing DHSS to
work more efficiently with OMB and would save money and
time.
Representative Josephson WITHDREW his OBJECTION.
There being NO further OBJECTION, Amendment HSS A was
ADOPTED.
3:33:26 PM
Vice-Chair Johnston MOVED to ADOPT Amendment HSS B (copy on
file):
DEPARTMENT: Health and Social Services
APPROPRIATION: Medicaid Services
ALLOCATION: (new, consolidated) Medicaid Services
DELETE: $58,009.6 GF Match/code 1003, grants line
EXPLANATION: This action deletes partial funding
associated with the Governor's proposed Medicaid Phase
One Reductions ($90,907.1 UGF).
Co-Chair Wilson OBJECTED for discussion.
Vice-Chair Johnston reviewed the amendment. She noted that
the committee had previously been given a Medicaid reform
presentation highlighting the process DHSS was currently
involved in. She explained that DHSS had come to the
subcommittee hoping to find $103 million in savings, but
the number had been reduced to $91 million because the
original figure had included a $12 million Behavioral
Health grant, which was not part of Medicaid savings. The
co-chairs of the subcommittee policy group had spent
significant time determining what they were comfortable
with. She explained that the reduction was either an
unallocated cut or an advisory vote because the items were
all things the department could do without the
legislature's authorization. She elaborated that the items
were under regulation and involved negotiations with the
federal government with the state management plan.
Vice-Chair Johnston reported the amendment represented what
the subcommittee chairs felt comfortable with in terms of
Medicaid adjustments. The list included a 915K enhanced
federal match for $123,000, electronic visit verification
for $440,000, end stage renal disease rate with methodology
for $1 million, expand lock-in program for $210 million,
high-cost drug reimbursement for $2.1 million, implemented
hospital diagnosis related groups for $ $4.5 million,
implement nurses' hotline for $500,000, implement nurses'
home acuity levels for $2 million, limited physical
occupational speech therapy visits to 12 per year for $1
million, reduce timely filing for $10 million, travel
reclaiming for $6.7 million, tribal reclaiming for Medicare
part A and B for $1.95 million, withholding inflation for
healthcare services for $4.5 million, withholding inflation
for the Division of Behavioral Health for $1.5 million, and
withholding inflation for Senior and Disability Services
for $4.9 million, for a total cut of $58.96 million.
3:37:21 PM
Representative Tilton MOVED to ADOPT Amendment 1 to
Amendment HSS B. The amendment would bring the total cut up
to the $102,907,000 that had been brought to the full
committee in a DHSS presentation. She elaborated that the
committee had been told by the department that it could
handle cuts to the items to reduce the Medicaid cost to the
state. She highlighted the department could move forward
with cuts without the legislature's authorization. She
thought the legislature should believe the department when
it was trying to find ways to help save money.
Co-Chair Wilson OBJECTED.
Vice-Chair Johnston asked for verification that the
proposed amendment to Amendment HSS B would include the $12
million Behavioral Health grant that was not part of
Medicaid.
Representative Tilton replied affirmatively.
Co-Chair Foster stated the amendment would reduce Medicaid
by $102 million.
Representative Sullivan-Leonard supported the amendment to
the amendment. She recalled the department had been clear
it could handle the reduction from the Medicaid budget. She
noted that in a time of fiscal crisis, the proposed
amendment by Representative Tilton was a small portion of
the DHSS and Medicaid budgets. She believed the legislature
needed to continue reducing costs. She appreciated the
original amendment but did not believe the cuts went far
enough. She reiterated that DHSS had told the committee it
could withstand the cuts. She reported that David Teal,
Director of the Legislative Finance Division had also told
the committee the cuts could be made without repercussions.
Co-Chair Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter
OPPOSED: Ortiz, Josephson, Johnston, Knopp, LeBon, Wilson,
Foster
The MOTION to adopt Amendment 1 to Amendment HSS B FAILED
(4/7).
3:41:15 PM
Representative Tilton MOVED to ADOPT Amendment 2 to
Amendment HSS B. The amendment would remove the $12 million
Behavioral Health grant from the $102 million.
Co-Chair Wilson OBJECTED for discussion.
Co-Chair Wilson asked if the amendment would be a $90
million reduction.
Representative Tilton replied the reduction would be
$90.907 million.
Vice-Chair Ortiz asked about the impact of the amendment to
Amendment HSS B.
Representative Tilton answered that Amendment 2 to
Amendment HSS B would remove the $12 million piece [for
Behavioral Health grants]. The total reduction would be
$90.907 million.
Co-Chair Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Sullivan-Leonard, Tilton, Carpenter, Merrick
OPPOSED: Josephson, Johnston, Knopp, LeBon, Ortiz, Wilson,
Foster
The MOTION to adopt Amendment 2 to Amendment HSS B FAILED
(4/7).
3:43:51 PM
Representative Tilton MOVED to ADOPT Amendment 3 to
Amendment HSS B. The amendment would increase the proposed
reduction to $82,633,400.
Co-Chair Wilson OBJECTED.
Representative Tilton explained the amendment would remove
the $8 million for adult preventative dental care from
Medicaid Services.
Vice-Chair Johnston opposed the amendment to Amendment HSS
B. She reported that in the past the legislature had
underfunded Medicaid. She had hopeful anticipation the
department and administration could find the savings.
However, she felt the legislature would have some liability
if it took an unallocated cut that was too large. She was
concerned about a scenario where the legislature
underfunded Medicaid and the administration could not meet
its goal. She did not want the situation to result in late
payments to the three groups [Health Care Medicaid
Services, Behavioral Health Medicaid Services, and Senior
and Disabilities Medicaid Services] as had occurred in the
past.
3:45:41 PM
AT EASE
3:46:20 PM
RECONVENED
Co-Chair Wilson MAINTAINED her OBJECTION.
Representative Tilton provided wrap up on the amendment.
She recalled that Mr. Teal had testified to the committee
that the department could make reductions on its own. She
noted the department had also told the committee it could
withstand the cut. She did not want to communicate to the
department that the legislature did not believe its
information was accurate.
A roll call vote was taken on the motion.
IN FAVOR: Sullivan-Leonard, Tilton, Carpenter, Merrick
OPPOSED: Josephson, Johnston, Knopp, LeBon, Ortiz, Wilson,
Foster
The MOTION to adopt Amendment 3 to Amendment HSS B FAILED
(4/7).
3:48:15 PM
Representative Tilton addressed the original Amendment HSS
B that would reduce Medicaid by $58 million as proposed by
the subcommittee chairs. She was disappointed the committee
would not move forward with the department's proposed cut.
She reiterated her earlier statement that Mr. Teal had told
the committee the department would have the ability to make
the reduction without the legislature's authorization. She
supported the $58 million cut that she believed was moving
in the right direction.
Co-Chair Foster explained that the [subcommittee] policy
co-chairs represented urban and rural Alaska. He felt
confident the proposed number was appropriate and could be
tolerated by his district. He supported the amendment.
Representative Sullivan-Leonard appreciated the amendment
sponsor's efforts to reduce the DHSS budget. She remarked
that the department had a two to three-year plan to make
reductions of hundreds of millions of dollars. She stated
that when a department's budget was in the billions of
dollars, it was necessary to determine how reductions could
be made.
Representative Josephson thanked the amendment sponsor for
reaching the compromise amendment. He relayed there had
been word earlier in the day that the director of the
Health Care Services Division had stepped down, which was
giving him pause about the administration's position moving
forward. He believed there were some reforms contained in
the amendment that may work, but he was concerned about the
withholding of inflation component for acuity-based nursing
and the timely filing allowance. He appreciated that much
work had gone into the amendment and that Medicaid was a
very expensive part of the budget.
Co-Chair Wilson shared that she had just found out that
Margaret Brodie was no longer with Medicaid Services within
DHSS. She stressed it would be a huge loss for the state.
She thanked Ms. Brodie for her excellent work during a
difficult time.
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment HSS B was
ADOPTED.
3:51:50 PM
Co-Chair Foster reported his intention to get through the
amendments during the current day.
Representative Tilton WITHDREW HSS C (copy on file).
Representative Tilton MOVED to ADOPT Amendment H HSS 1
(copy on file):
Alaska Psychiatric Institute
H HSS 1 - Remove Intent Language due pending
legislation
Remove the following intent language:
It is the intent of the legislature that the
Department of Health and Social Services abide by all
provisions of collective bargaining agreements and
adhere to the laws of the State Procurement. Code (AS
36.30.005-36.30.995) in the contracting of services
for the Alaska Psychiatric Institute.
Co-Chair Wilson OBJECTED for discussion.
Representative Tilton reviewed the amendment that would
remove intent language added during the subcommittee
process. She explained there was pending legislation (HB
86) that would speak to the issue.
Representative Josephson opposed the amendment. He thought
the intent language was of vital importance. He reasoned
that they did not know what was going to happen with the
legislation [mentioned by Representative Tilton]. He
detailed that a number of House members were working
tirelessly to find out the virtue of an out-of-state
company taking over management of the state's only
psychiatric hospital that was caring for Alaskans
struggling with mental health concerns. He thought the
investigation should be given a chance to continue. He
referenced a recent joint hearing on the topic and believed
the group had unearthed some concerns relative to
procurement (the amendment addressed procurement). He
continued that the group had worked mightily in the
interest of Alaskans. He considered it was possible that
things were so damaged at the hospital that the
administration's path was the proper one. He explained the
intent language merely stated that the law needed to be
followed and it highlighted some concerns of numerous
members in the legislature.
3:54:52 PM
AT EASE
3:58:39 PM
RECONVENED
Co-Chair Wilson WITHDREW her OBJECTION.
Vice-Chair Ortiz and Representative Josephson OBJECTED.
Representative Josephson noted he had already spoken to his
objection.
Representative Tilton provided wrap up on the amendment.
She read from the intent language [see above]. She relayed
HB 86 covered the topics included in the intent language.
She elaborated that the bill stated that mental health was
a public trust that should remain rightfully the duty of
the state to exercise care over mental health when it
involved involuntary admittance. The bill would continue
public management of the state's mental health system and
would ensure the interests of the patient were paramount in
a public process. She believed departments followed
procurement law. She asked to remove the intent language
from the budget.
A roll call vote was taken on the motion.
IN FAVOR: Tilton, Carpenter, Sullivan-Leonard, Johnston,
LeBon, Knopp, Wilson
OPPOSED: Josephson, Merrick, Ortiz, Foster
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment HSS 1 was ADOPTED.
4:01:46 PM
AT EASE
4:02:11 PM
RECONVENED
Representative Tilton MOVED to ADOPT Amendment H HSS 2
(copy on file):
Juvenile Justice
Nome Youth Facility
H HSS 2 - Eliminate Youth Detention and Treatment in
Nome Youth Facility
The Division of Juvenile Justice will eliminate Youth
Detention and Treatment in the Nome Youth Facility and
provide escorted transportation to a detention
facility in Anchorage, Bethel, or Fairbanks. The
facility has historically been underutilized with
youth detained 64 times in FY2018. This would
eliminate 16 full-time and two part-time positions.
The facility would continue to provide probation
services and retain two permanent full-time and one
temporary position.
1004 Gen Fund (UGF) -2,000.0
Co-Chair Wilson OBJECTED.
Representative Tilton reviewed the amendment that would
eliminate detention and treatment in the Nome Youth
Facility. She detailed that the facility would provide
escorted transportation to the detention facilities in
Anchorage, Bethel, and Fairbanks.
Co-Chair Wilson spoke to her opposition. She was frustrated
by the situation that had been before the committee in the
past. She believed there were options, but for some reason
the department had not utilized them. She furthered that
being in detention could be the result of a minor to major
crime, but she was opposed to taking youth away from their
home [town] and putting them in a position where they had
potential to learn more bad behavior. She did not know how
to better get the point to the department that there were
better options available. She wanted to be able to vote for
the amendment because she did not believe funding the
facility was utilizing the funds in the best way, but she
also did not agree with sending youth out of Nome. She
believed sending youth out of Nome to Anchorage was akin to
sending adult prisoner's out of state. She thought
providing services within the community and family would
mean youth would be more likely to learn from the
experience. She did not know whether intent language should
be included, but she hoped to have a plan from the
department the following year on how to better serve the
youth more efficiently and cost-effectively.
Vice-Chair Johnston noted she had some good discussions
with the department and commissioner about the topic. She
reported the department would be looking rather
aggressively at how best to approach the situation. She
agreed there were other alternatives - including
partnerships that could be developed - without sending
youth to Anchorage or Fairbanks where they could pick up
undesirable habits.
4:05:07 PM
Representative Sullivan-Leonard shared that in the past she
had served on the board of juvenile justice advisory
commission within DHSS. She reported that the Nome Youth
Facility had been discussed many times. Some of the
discussion in the past was there were fewer youth in the
facility because they were doing such a good job in Nome.
She believed it had been part of the recent discussion as
well. She shared that the board had toured facilities
across the state, and she had been surprised how many
family members were spread between Fairbanks, Anchorage,
Nome, and other areas. She had learned there were many
support families nearby. She supported the amendment. She
thought that youth could be moved to other areas
efficiently. She thought the facility in Nome could be used
for something else like a behavioral or treatment center
for the community.
Co-Chair Foster opposed the amendment. He was not asking to
increase funds, but was requesting to flat fund the item at
the FY 19 level. He detailed that the amendment would shut
down the Nome Youth Facility and cut $2 million from the
budget. He reported that in the past couple of years he had
looked at another scenario that involved the closure of the
Mat-Su Youth Facility. He reasoned it would be much easier
to drive Mat-Su youth to a facility like McLaughlin in
Anchorage. He elaborated that the youth would be close to
their families and the court of jurisdiction. The closure
of the Nome facility meant youths would have to be flown to
McLaughlin; the youths would be far away from their support
groups. For the same reason that he did not want to close
Wildwood or send 500 inmates out of state he did not
support sending Nome youth to other areas in the state. He
did not support the closure of the Nome facility. He had
not pursued the closure of the Mat-Su facility because he
felt both facilities were important to rehabilitating
youth. He pointed out that the legislature and
administration had both made public safety a priority. He
reasoned closing the facility would weaken the
legislature's arguments it had prioritized public safety.
Representative Carpenter supported the amendment. He spoke
to the importance of mentorship for youth who were
struggling with many different issues - issues he thought
probably primarily stemmed problems in their families. He
understood that due to the distance it would be difficult
for children to be moved from Nome to other locations. He
stated there were 16 full-time and 2 part-time positions
dedicated to 64 youth in the past year at a cost of $2
million. He understood that things were more expensive in
rural areas. He did not know whether there were other
facilities to provide care for individuals in distress in
Nome. He thought the expenditure was irresponsible fiscal
policy.
4:10:22 PM
Co-Chair Wilson MAINTAINED her OBJECTION.
Representative Tilton provided wrap up on the amendment.
She agreed it was difficult when thinking about youth in
the situation. She believed sometimes punishment prevented
youths from being offenders in the future. The idea of
closing the facility did not make her happy but she thought
it was necessary to look at the budget situation. She
pointed out the facility had historically been
underutilized. She relayed that in 2018, 64 youth had been
detained at a cost of $2 million. She understood the look
the co-chair had taken at closing the Mat-Su facility
because it was on the road system and would make
transportation to and from Anchorage easier; however, the
closure would be an increase in the budget due to the
number of employees it would take. She explained that the
Mat-Su facility was over capacity; the number of additional
employees that would be needed at McLaughlin would cost
more.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Merrick, Sullivan-Leonard, Tilton
OPPOSED: Josephson, Johnston, Knopp, LeBon, Ortiz, Wilson,
Foster
The MOTION to adopt Amendment H HSS 2 FAILED (4/7).
4:13:30 PM
Co-Chair Foster noted that Amendment H HSS 3 would not be
offered (copy on file).
Representative Tilton MOVED to ADOPT Amendment H HSS 4
(copy on file):
Public Assistance
General Relief Assistance
H HSS 4 - Reduce General Relief Assistance Payment
This amendment caps the General Relief Assistance
burial payment to $1000.00 per application.
Previously, there was not a cap on this benefit. In
FY18, there were 294 applications for this program.
1004 Gen Fund (UGF) -600.0
Co-Chair Wilson OBJECTED for discussion.
Representative Tilton reviewed the amendment that would cap
the General Relief Burial Assistance Program to $1,000 per
applicant. She explained there previously had not been a
cap on the benefit. In FY 18 there had been 294
applications for the program, which was down from 440 in FY
17 (a decrease of over 33 percent).
Representative Josephson stated the issue was about
exceptionally poor people who had died. He asked what it
cost to bury a person.
Representative Tilton answered that she did not have the
number. The amendment would cap the program, not eliminate
it.
Representative LeBon asked about the average cost of a
burial.
Representative Tilton answered that an average cremation
was about $1,500.
4:15:43 PM
Representative Knopp reported that he had paid $1,000 for
the burial of a homeless person a couple of years back. He
detailed the cost could range from $1,000 to $10,000. He
had found the mortuaries and funeral homes were negotiable
in the types of services offered. He speculated there was
probably no limit to what a person could spend.
Representative LeBon MOVED to ADOPT Amendment 1 to HSS 4 to
increase the cap to $1,500.
Co-Chair Wilson OBJECTED for discussion.
Representative Sullivan-Leonard asked for verification the
motion was to increase the cap to $1,500.
Representative LeBon replied he was moving to raise the
amount to $1,500 based on the information.
Vice-Chair Ortiz asked for the average amount of assistance
given per application.
Representative Tilton replied that she did not have the
information on hand. The number in FY 18 had been 294
applicants with no cap. She stated a burial could range
from simple to more elaborate. She added that the number of
applicants had decreased from 440 in FY 17.
4:18:35 PM
Vice-Chair Johnston clarified that because there was no
cap, the menu of free burial services had expanded;
therefore, the department felt a cap was necessary. There
were opportunities for providing less expensive services
for individuals who may need them versus individuals who
may have insurance to carry the full cost. The industry had
a range of prices and the cap allowed some structure.
Co-Chair Wilson asked if the department had a
recommendation for the cap.
Vice-Chair Johnston replied $1,000.
Co-Chair Wilson noted she knew nothing about the issue. She
considered who was responsible for a burial if someone was
homeless and had no family. She did not know whether the
state had some type of responsibility. She surmised that if
the department thought $1,000 was the right amount, she
would go with that amount.
Representative LeBon found both numbers [$1,000 and $1,500]
to be very low. He thought if the average cost was $1,500,
it should probably be the cap. He pointed out that in time
the figure would have to be increased. He suggested
starting at $1,500 to get a few years' time out of it.
Co-Chair Wilson MAINTAINED her OBJECTION.
4:21:08 PM
AT EASE
4:25:05 PM
RECONVENED
Representative LeBon replied that based on an increase from
a cap of $1,000 to $1,500 an adjustment to the UGF number
was needed. He asked to reduce the UGF number from $600,000
to $463,000.
Co-Chair Foster asked Representative LeBon to withdraw
Amendment 1 and offer Amendment 2 for clarification.
Representative Knopp replied that thought the cap needed to
remain [Amendment 1 was not withdrawn].
Co-Chair Wilson WITHDREW her OBJECTION to Amendment 1 to
Amendment H HSS 4. There being NO further OBJECTION,
Amendment 1 to HSS 4 was ADOPTED.
Co-Chair Foster asked Representative LeBon to move
Amendment 2.
Representative LeBon explained that Amendment 2 would line
up the cap number with the number of applications in the
prior fiscal year. He detailed that if every service cost
was $1,500 and there were approximately 294 applications,
the fiscal note would be $463,000 [UGF].
Co-Chair Wilson noted that the amendment needed to be
offered. She MOVED to ADOPT Amendment 2 to Amendment H HSS
4. The amendment would delete the $600,000 reduction and
replace it with a reduction of $463,000 UGF.
4:26:55 PM
AT EASE
4:27:41 PM
RECONVENED
Co-Chair Wilson restated her motion. She MOVED to ADOPT
Amendment 2 to Amendment H HSS 4. The amendment would
delete the $600,000 reduction and replace it with a
reduction of $453,000 UGF to reflect the $1,500 cap
included in Amendment 1.
Representative Tilton OBJECTED. She believed the figure
provided by Representative LeBon was $463,000 instead of
$453,000.
Co-Chair Wilson WITHDREW Amendment 2. She MOVED to ADOPT
Amendment 3 to Amendment H HSS 4. The amendment would
delete the $600,000 reduction and replace it with a
reduction of $463,000 UGF to reflect the $1,500 cap
included in Amendment 1.
There being NO OBJECTION, Amendment 3 to Amendment H HSS 4
was ADOPTED.
Co-Chair Wilson WITHDREW her OBJECTION to Amendment H HSS 4
as AMENDED.
There being NO further OBJECTION, Amendment H HSS 4 was
ADOPTED as AMENDED.
4:29:38 PM
Representative Josephson MOVED to ADOPT Amendment HSS 5
(copy on file):
Public Health Nursing
H HSS 5 - Increase Public Health Nursing Services
Public Health Nursing has been the target of many cuts
over the past few years taking a hit of more than $4
million from FY16 to FY19. This increment will help
the Public Health Nursing allocation increase services
to meet increasing incidence of flu and STDS and
decreased immunization rates.
1004 Gen Fund (UGF) 1,000.0
Co-Chair Wilson OBJECTED for discussion.
Representative Josephson reviewed the amendment. He shared
that he had attended about four town hall meetings (one or
two in Juneau, two in Anchorage, and one in Bethel). He
discussed that typically the legislature heard generalized
commentary about need or want - to cut the budget, raise
the budget, protect schools, etcetera. He remarked that it
was all important. He highlighted public testimony from
March 25 [2019] Jane Andreen, a Juneau nurse who provided a
specific case about the need to grow public nursing. He
reported the amendment was his only amendment to add funds.
He noted that currently public health nursing had fees set
on a sliding scale based on family income and size. He
stated that no one was ever refused; however, there had
been a cut of 40 positions since FY 16 in the range of $5
million. He elaborated that the hope had been to fill the
cut with DGF funds, but that had not materialized.
Representative Josephson provided the figures reported by
Ms. Andreen during public testimony: 27 percent of existing
public health centers had been closed, staff was down 21
percent, flu cases rose 1,955 to 6,515 in Alaska, there had
been a reduction in immunizations from 33,000 to 16,000. He
believed Alaska was the worst state for gonorrhea and
syphilis. He thought Ms. Andreen had made an air-tight case
for a funding increment. He felt that when a concrete
example was proposed, it would be negligent for him to not
bring it before the whole committee. He highlighted that
health was a constitutional obligation. The amendment would
spend an extra $1 million on the public health of the
Alaskan people.
Representative Sullivan-Leonard asked if there had been a
discussion about the public health nursing budget in the
HSS subcommittee. She asked if the particular allocation
had been reduced.
Representative Josephson replied that he did not know. He
believed it was a status quo budget. He noted an
affirmative response from Vice-Chair Johnston. He explained
that Ms. Andreen had testified about previous cuts and what
she viewed as the impact of those cuts.
4:33:21 PM
Representative Sullivan-Leonard asked Vice-Chair Johnston
for history on public health nursing.
Vice-Chair Johnston replied that Representative Josephson
had accurately listed the cuts that had been made to the
division from FY 14 to FY 19. She explained that the
subcommittee had not accepted a proposed cut of $2 million
and had thus maintained status quo. She recognized the
importance of public health nursing and reported great work
had been done to find efficiencies. She detailed that much
of public health nursing involved education - nurses had
been able to reach out through education other than only
doing personal visits. She acknowledged that centers had
been closed, which she recognized was not ideal. She stated
public health nursing was doing a heroic job providing
services, which was the reason the subcommittee had not
proposed any additional cuts.
Representative Tilton shared that in FY 18 actuals the
public health budget had been $26,504,300 and was proposed
to increase to $29,953,900 in FY 20 - an increase of
$3,449,600, which was $2,389,500 above the consumer price
index (CPI) of 4 percent. She explained that even if public
health nursing was reduced, it would be maintained at FY 18
levels adjusted for CPI.
4:35:39 PM
AT EASE
4:36:29 PM
RECONVENED
Vice-Chair Johnston read the decrements to the department
as follows: $1.4 million and $0.4 million in FY 16; $3.7
million in FY 17; and over $1.1 million in FY 18. There had
been an increment in FY 18 for the amount that had been
removed for over $1.1 million; the funds had been temporary
for a three-year plan. There had been an increment again
for the three-year plan for $757,000 in FY 19 and $379,000
in FY 20. She noted a $2 million [reduction] had been
proposed in the FY 20 budget. The total base change from FY
16 to FY 19 was $4.8 million. She explained that if the
legislature accepted the suggested $2 million decrement,
the total reduction since FY 16 would be $6.8 million.
Representative Tilton added that the Division of Public
Health and Nursing had come before the committee and had
testified it was confident the budget could be reduced,
while maintaining needed services. She reported that
consolidating the regions would reduce the division's
administrative cost by 25 percent. She detailed that the
division could reduce its leasing facilities and cost and
could contract with community centers. The division was
looking at developing innovative service delivery models
with different partners.
Vice-Chair Ortiz supported the amendment. He reported that
the island community of Wrangell had lost its public health
nurse and center due to the cuts. He pointed out that
residents could not drive to access services elsewhere.
Co-Chair Wilson MAINTAINED her OBJECTION.
Representative Josephson provided wrap up. He addressed the
consolidation and efficiencies discussed by Representative
Tilton and noted the state had a top-down government. He
countered that public health nurses were telling a
different story. He stated that no one had controverted the
statistics provided. For example, gonorrhea had increased
31 percent between 2015 and 2017. He stressed that the
state was not going in the right direction on fundamental,
basic healthcare in Alaska. He believed the state would pay
for it in other ways. He underscored that the data was
defensible.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Ortiz, Foster
OPPOSED: Johnston, LeBon, Merrick, Sullivan-Leonard,
Tilton, Carpenter, Knopp, Wilson
The MOTION to adopt Amendment H HSS 5 FAILED (3/8).
Representative Tilton MOVED to ADOPT Amendment H HSS 6
(copy on file):
Public Health Nursing
H HSS 6 - Reduce Public Health Nursing
Reduce Public Health Nursing
1003 GF/Match (UGF) -2,000.0
Co-Chair Wilson OBJECTED for discussion.
Representative Tilton reviewed the amendment that would
reduce public health nursing by $2 million. She reported
the division had told the committee it was confident the
reduction could be made through the consolidation of
regions. She noted it was an administrative reduction, not
a reduction to services. She detailed the division could
reduce leasing and contract with community centers to
develop innovative service delivery models with different
partners. She added that within DHSS, 163 months had been
allocated for public health nurse positions that were
vacant, which totaled $1.6 million UGF-only.
4:42:33 PM
Vice-Chair Johnston relayed the subcommittee had not
accepted the [$2 million] decrement due to decrements made
over the years. She did not support the amendment.
Co-Chair Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Sullivan-Leonard, Tilton, Carpenter
OPPOSED: Knopp, LeBon, Merrick, Ortiz, Josephson, Johnston,
Wilson, Foster
The MOTION to adopt Amendment H HSS 6 FAILED (3/8).
4:43:40 PM
Representative Tilton MOVED to ADOPT Amendment H HSS 7
(copy on file):
Human Services Community Matching Grant
H HSS 7 - Eliminate Human Services Community Matching
Grants
Eliminate Human Services Community Matching Grants
1004 Gen Fund (UGF) -1.387.0
Representative Josephson and Co-Chair Wilson OBJECTED.
Representative Tilton reviewed the amendment that would
eliminate $1.4 million in human services community matching
grants outlined in AS 29.60.600. She reported that funding
the grant annually was not statutorily required. She
explained the statute outlined the requirements if funds
were appropriated. She remarked that in the past, when the
state had money, numerous programs had been created without
thinking about the ability to fund the items in the future.
She emphasized the importance of prioritizing spending. She
encouraged grant recipients to look for outside funding.
Representative LeBon spoke against the amendment. He
relayed the human services matching grant program had been
in place since 1992. The program required a 30 percent
matching participation by the community receiving the
grant. He reported that Fairbanks was happy to provide its
30 percent match. He elaborated that grant recipients in
Fairbanks included the Fairbanks Community Food Bank; Love
Inc, provided emergency support to clients; North Star
Council on Aging supported the senior Meals on Wheels
program; and the Interior Community Health Center provided
basic primary healthcare services for low income
individuals. He reported the program was working and
deserved support.
Representative Sullivan-Leonard supported the amendment.
She had seen good work provided by the Mat-Su Health
Foundation and other community groups such as chambers and
rotary programs rising to help those in need including the
local food bank and Meals on Wheels program. She supported
the reduction, which she believed was needed. She thought
it was important to move more towards private entities to
pick up where the state had been in the past.
Representative Josephson opposed the amendment. He thought
the food banks were doing well due to state matching funds.
Additionally, he did not believe it was viable to ask the
private sector to pick up the load for myriad items unless
there was a tracking system to make sure it happened. He
had received an email earlier in the day from a woman in
Ketchikan working for Women in Safe Homes (WISH). The woman
had reported a domestic violence clinic aided by the grant
had saved a woman's life. He elaborated that the woman had
been provided emergency transportation utilizing community
initiative matching grants. He supported maintaining the
grant.
Co-Chair Wilson MAINTAINED her OBJECTION.
Representative Tilton provided wrap up. She acknowledged
that all programs were good to someone. She highlighted the
state's budgetary challenges and was concerned about what
would happen when the state was not available to provide
the funds.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter,
Wilson
OPPOSED: LeBon, Ortiz, Josephson, Johnston, Knopp, Foster
The MOTION to adopt Amendment H HSS 7 FAILED (5/6).
4:49:54 PM
Representative Tilton MOVED to ADOPT Amendment H HSS 8
(copy on file):
Community Initiative Matching Grants (non-statutory
grants)
H HSS 8 - Eliminate Community Initiative Matching
Grants
Eliminate Community Initiative Matching Grants
1004 Gen Fund (UGF) -861.0
Co-Chair Wilson OBJECTED for discussion.
Representative Tilton reviewed the amendment that applied
to the rural piece of the grants. The amendment would
eliminate funding for the community initiative matching
grants. She reported the funding was not statutorily
required. She elaborated that the funds could be eliminated
while keeping the program in place.
Co-Chair Wilson asked if the program had the same match as
the previous program discussed by the committee [human
services community matching grants].
Representative Tilton did not believe so. She did not have
the information on hand.
Vice-Chair Ortiz asked if the sponsor had said it was the
rural side of the matching grant program.
Representative Tilton answered that the human services
community matching grant was the urban grant and the
community initiative matching grant was the rural
counterpart.
Representative LeBon asked if there was a match requirement
for a rural community to access the funds.
4:51:49 PM
AT EASE
4:56:12 PM
RECONVENED
Representative Tilton reported she had been provided
information showing there was no match requirement.
Co-Chair Wilson WITHDREW her OBJECTION.
Vice-Chair Ortiz OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter,
Wilson
OPPOSED: Ortiz, Josephson, Johnston, Knopp, LeBon, Foster
The MOTION to adopt Amendment H HSS 8 FAILED (5/6).
4:57:32 PM
Co-Chair Foster asked when members wanted to break for
dinner.
Co-Chair Wilson requested to finish the remainder of
Department of Health and Social Services before a dinner
break.
Representative Knopp thought that would take some time.
Co-Chair Foster thought it could take a while. He suggested
taking a break in an hour.
4:59:11 PM
Vice-Chair Johnston MOVED to ADOPT Amendment H HSS 9 (copy
on file):
Medicaid Services
H HSS 9 - Intent Language
Wordage:
It is the intent of the legislature that the
department work with the statewide professional
hospital association to develop strategies and
methodologies for implementation of hospital diagnosis
related groups, acuity-based skilled nursing facility
rates, rate reductions, and timely filing provisions
to mitigate unintended consequences.
The department shall submit quarterly progress reports
on cost containment efforts to the co-chairs of the
House and Senate Finance Committees and the
Legislative Finance Division.
Explanation:
This amendment gives the department direction and
expectations for cost containment strategies and
requires quarterly updates.
Representative Josephson OBJECTED for discussion.
Vice-Chair Johnston explained the intent language would let
the department know the legislature would like the
providers via the state hospital association to be at the
table helping to inform the department on implementation of
the Medicaid intent language. The other part of the intent
language included progress reporting requirements to inform
the legislature whether the department was achieving
savings or if a supplemental should be anticipated.
Representative Josephson asked if the amendment would allow
the statewide professional hospital association to say it
could not make the reduction due to too many rate
reductions. He surmised the association would be free to
speak its piece with regards to reforms. He asked if his
statements were accurate.
Vice-Chair Johnston replied it was partially correct. She
explained the issue was more that legislators knew cuts
needed to be made. The association had some ideas to save
money. The intent language would bring the association to
the table to work with all parties and determine if cost
savings could be made.
Representative Sullivan-Leonard understood the amendment
pertained to Alaska State Hospital and Nursing Home
Association (ASHNHA). She thought the entity was already
part of the discussion. She wondered why the intent
language was necessary. She thought it would set a
precedent where association groups would be an active part
of the division as a mandate.
Vice-Chair Johnston replied the intent language was in
response to poor communication between health services and
the department. She explained the parties could do whatever
they wanted with the communication. The amendment
encouraged the department to bring healthcare providers
into the discussion to see if there were efficiencies. At
the end of the day the department could do what it wanted,
but the intent language suggested there could be some cost
savings by bringing the providers to the table or including
them in conversations.
5:02:09 PM
Representative Sullivan-Leonard felt there were already
ongoing discussions between the department and various
hospitals across the state. She did not believe it was
necessary.
Representative Josephson supported the intent language
because it was balanced. He detailed that on the one hand
it talked about being mindful for the state to mitigate
unintended consequences to providers, on the other hand it
talked about the need for cost containment.
Representative Tilton considered the amendment's
requirement for the department to submit quarterly progress
reports. She agreed reporting was needed, but she noted
costs that came with producing reports. She wondered if
quarterly reporting was the right number.
Vice-Chair Johnston cited separate legislation - SB 74 -
and explained it was her understanding quarterly reporting
had been used in that bill. She pointed out quarterly
figures provided trend lines. She reasoned it should be
fairly easy to query if data was available.
Representative Knopp spoke in support of the amendment. He
thought it seemed appropriate with the expansion of
Medicaid and the Affordable Care Act hospitals and skilled
nursing homes had become more reliant on "that type of
revenue source." He elaborated that although the department
administered healthcare, it was not necessarily in the
healthcare business. He was not sure the department was
completely aware of the consequences or changes it made. He
believed consulting with providers was a good idea.
5:04:14 PM
Representative Carpenter asked if the amendment was an
attempt to improve organizational processes.
Vice-Chair Johnston replied in the affirmative.
Representative Carpenter asked if the amendment sponsor
would be open to an amendment that focused the department's
attention on a way to think through process improvement
rather than pulling more people into a group ad hoc. He
argued there were existing business models for process
improvement that may or may not be being used at present.
He reasoned if the legislature directed a particular
process improvement model it could force the department to
do its process improvement.
Vice-Chair Johnston appreciated the intent but thought that
approach [suggested by Representative Carpenter] would
micromanage the department. She did not want to be that
prescriptive.
Representative Josephson WITHDREW his OBJECTION to the
amendment.
There being NO further OBJECTION, Amendment H HSS 9 was
ADOPTED.
5:06:05 PM
Representative Knopp MOVED to ADOPT Amendment H HSS 10
(copy on file):
Medicaid Services
H HSS 10 - Exclude long term care facilities from
Medicaid provider rate reductions
It is the intent of the legislature that long-term
care facilities are exempt from Medicaid provider rate
reductions.
Explanation:
This amendment would exclude long term care (skilled
nursing) facilities from proposed Medicaid provider
rate reductions.
Co-Chair Wilson OBJECTED for discussion.
Representative Knopp reviewed the amendment that would
include intent language to exempt long-term care facilities
from the Medicaid provider rate reductions - at least for
the current budget cycle. He explained that some long-term
skilled nursing facilities were very dependent on the
Medicaid system. He reported the following figures from a
study provided by ASHNA: Wildflower Court was 91 percent
dependent; Petersburg Medical Center was 100 percent
dependent; Heritage Place was 85 percent dependent;
Wrangell Medical Center was 99 percent dependent; and South
Penn Hospital was 93 percent dependent. Any reductions to
the services would put the entities out of business. He
requested no changes made to Medicaid for skilled nursing
facilities.
5:07:39 PM
Co-Chair Wilson asked for clarification. She noted that the
wordage provided a suggestion to the department, but it did
not prevent the department from excluding long-term care
facilities.
Representative Knopp agreed. The amendment included intent
language. He had corresponded with ASHNA and ASHNA had
corresponded with the department. The department had
recommended the intent language and had communicated it
would more than likely comply. He explained the department
recognized the need for the skilled nursing facilities.
Representative Carpenter thought there was a fine line with
the intent language being offered. He considered that if
the legislature could not prescribe process improvement
methodology to help organizations improve their thinking,
he thought telling the department it should not consider
rate reductions for a particular portion would also be
prescriptive and micromanaging. He did not understand where
the committee was going if it was picking and choosing
which prescriptive suggestion moved forward. He thought
they were micromanaging in one area and not another.
Co-Chair Wilson WITHDREW her OBJECTION.
Representative Carpenter OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Josephson, Johnston, Knopp, LeBon, Wilson,
Foster
OPPOSED: Sullivan-Leonard, Tilton, Carpenter, Merrick
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment H HSS 10 was ADOPTED.
5:10:36 PM
Representative LeBon MOVED to ADOPT Amendment H HSS 11
(copy on file):
Medicaid Services
H HSS 11 - Medicaid - Hospital Rate Reduction
Exemption
Wordage:
It is the intent of the legislature to exempt
hospitals with the dual federal designation of Sole
Community Hospital and Rural Referral Center in
addition to Critical Access Hospitals from the 5%
Medicaid rate reduction.
Explanation:
Fairbanks Memorial Hospital (FMH) is the only Sole
Community Hospital and Rural Referral Center dual
federally designated hospital in the state as well as
only one of 133 in the country. Given its proximity to
other communities, FMH is often utilized by rural
areas since the nearest like hospital is approximately
400 miles away; the requirement to be considered SCH
is only 35 miles. FMH has a high case-mix and high
discharge volume.
Co-Chair Wilson OBJECTED for discussion.
Representative LeBon reviewed the amendment that would
clarify the status of the Fairbanks Memorial Hospital (FMH)
as being worthy of "critical access" hospital designation.
He explained FMH was the only hospital in Alaska that had a
designation of a sole community hospital and a rural
referral center. He detailed there were only 133 (out of
4,700) of such hospitals in the country. He believed the
designation was worthy given the remote location of FMH in
relationship to the rest of the state.
5:11:32 PM
AT EASE
5:21:22 PM
RECONVENED
Representative LeBon reiterated his explanation of
Amendment H HSS 11. The amendment would publicly the status
of FMH as the only sole community hospital and rural
referral center in Alaska. The amendment clarified the
hospital should be entitled to the designation of a
critical access hospital. He acknowledged the budget
adopted by the committee had retained the Medicaid funding;
however, he wanted the information in Amendment H HSS 11 to
be on the record because he did not know what the
department may do.
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment H HSS 11 was
ADOPTED.
5:22:40 PM
Representative Tilton MOVED to ADOPT Amendment H HSS 12
(copy on file):
Medicaid Services (continued)
H HSS 12 - Remove Department level $30 million
transfer wordage between non-Medicaid Services
appropriations
This transfer authority is unnecessary and is counter
to truth in budgeting.
Co-Chair Wilson OBJECTED for discussion.
Representative Tilton reviewed the amendment that would
remove departmental intent language that was at the
commissioner's discretion to transfer up to $30 million
between appropriation lines within the DHSS budget. She
noted there was a caveat that the Medicaid Services
appropriation could not be removed. The language had been
first incorporated in FY 14 as a temporary measure when the
legislature had made the first reductions to the Medicaid
budget. She shared that she had been staff when the intent
language came forward and recalled it had been intended as
very temporary. She cautioned to be careful what was asked
because it could keep coming back in the future. She read
from a legal opinion she had received from Legislative
Legal Services:
Allowing the commissioner to transfer funds between
appropriations is most likely unlawful delegation of
the legislature's appropriation power. A violation of
the separation of powers doctrine, a violation of the
prohibition on transfers between appropriations under
AS 37.07.080, and a violation of the confinement
clause under Article 2, Section 13 of the
constitution.
Co-Chair Wilson supported the amendment. She reminded
subcommittee chairs that they had all removed similar
language out of their agencies. She noted that it was not
the agency's purview to transfer between appropriations.
She added that the legislature had divided appropriations
even more for many agencies because it wanted to ensure
funds were spent on what the legislature intended. She
noted that the language was no different than what had
already been removed. She had been frustrated the previous
year when the legislature had been told departments could
spend money wherever they wanted. She stressed that was not
her intent.
Representative Josephson mentioned Vice-Chair Johnston's
amendment to collapse appropriations. He asked how that
interplayed with the current amendment.
Vice-Chair Johnston replied it was her amendment because
she was concerned about how aggressively the department was
trying to make changes. She realized the process addressed
in Amendment H HSS 12 was not legal and should not occur.
She supported the amendment.
5:26:23 PM
Representative Sullivan-Leonard noted the issue had been
discussed the previous year. She had been concerned to see
that money could be moved as the department deemed fit. She
noted she had offered a $25 million reduction amendment the
prior year. She supported the amendment.
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment H HSS 12 was
ADOPTED.
5:27:09 PM
Representative Josephson MOVED to ADOPT Amendment H HSS 13
(copy on file):
Adult Preventative Dental Medicaid Services
H HSS 13 - Maintain Full Funding for Adult
Preventative Medicaid Dental Services
Wordage:
It is the intent of the legislature that the
Department of Health and Social Services maintain full
funding for adult preventative dental Medicaid
services
Explanation:
Ensures the adult preventative Medicaid dental program
will be maintained
Co-Chair Wilson OBJECTED for discussion.
Representative Josephson referenced an amendment by Vice-
Chair Johnston that her amendment cutting $58 million kept
adult dental intact. He offered the amendment in the same
vein that Representative LeBon had offered his recent
amendment. He could not know without great expertise, what
the department would do; however, the committee had been
told that the department may respond to intent language.
The committee had heard that an $8 million investment would
bring $18 million from the federal government. He
underscored that if the department cut adult preventative
dental, Alaska would join only three states that did not
offer the service. He emphasized the importance of the
service.
Representative Sullivan-Leonard recalled from a DHSS
presentation that individuals needing dental care would
receive it if the situation was an emergency. She did not
recall that the dental program would go away.
Vice-Chair Johnston clarified there were two programs -
emergency dental and adult preventative dental. The
emergency dental program more than likely caused
hospitalization and was for individuals in trauma who were
losing teeth. Whereas, the preventative dental program
caught numerous systemic issues. She cited diabetes as one
of the most important things that could be identified by
preventative dental services. Additionally, systemic
infections could be identified. For those reasons, she had
not included preventative dental in the Medicaid cuts [in
Amendment HSS B].
Co-Chair Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Johnston, Knopp, LeBon, Ortiz, Wilson,
Foster
OPPOSED: Sullivan-Leonard, Tilton, Carpenter, Merrick
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment H HSS 13 was ADOPTED.
5:30:34 PM
Representative Josephson WITHDREW Amendment H HSS 14 (copy
on file) related to Medicaid reductions.
Representative Sullivan-Leonard asked why the amendment was
not being offered.
Vice-Chair Johnston replied the amendment would not be
offered because the committee had already approved a $58
million reduction to Medicaid Services.
5:31:15 PM
Representative Josephson WITHDREW Amendments H HSS 15 and H
HSS 16 (copy on file).
Representative Josephson MOVED to ADOPT Amendment H HSS 17
(copy on file):
Medicaid Services
H HSS 17 - Honor the Small Facilities
Wordage:
It is the intent of the legislature that the
department of Health and social services honor the
terms, conditions, and rate schedules set out in the
already signed "Small Facility Medicaid Payment Rate
Agreements" with all facilities.
Co-Chair Wilson OBJECTED for discussion.
Representative Josephson reviewed the amendment that would
honor small facilities contracts. He read from a prepared
statement:
This amendment again deals with Medicaid rates and
directs DHSS to honor the contracts it has already
signed with critical access hospitals. The department
told us that critical access hospitals would be
protected under the drastic Medicaid proposal that -
in my view it was drastic, and we've scaled it back.
According to several experts who have come to us, the
department may be able to hold critical access
hospitals harmless from outpatient rate cuts, but they
can not guarantee with any level of comfort that these
hospitals will not be impacted by the proposed cuts.
Critical access hospitals operate both acute care and
long-term care services under one administrative
structure. The fact that DHSS has signed one small
facility agreement that includes rates for both acute
care and long term care demonstrates an integrated
facility. A cut to one part of the facility will
certainly impact the other part of the facility. Since
the department has no way of confidently articulating,
in my opinion, the harm that might be caused to
critical access hospitals through rate cuts, the best
way to protect critical access hospitals is to honor
the small facility agreements that DHSS has signed.
Representative Josephson noted that the contracts were
referred to in 7 AAC 150.190. He explained that DHSS had
come to the hospitals and asked them to enter into the
agreements. He did not want Medicaid reforms to interfere
with the agreements. He detailed that the agreements
outlined the payment rate and inflationary adjustment a
facility would receive annually for the four-year period of
the agreement, which would provide the hospitals with a
stable payment environment to meet community needs.
5:33:48 PM
Vice-Chair Johnston asked if the amendment precluded
reopening an agreement from both parties in the event of a
new rate structure or block grant.
Representative Josephson replied it was a good question. He
stated the four-year contracts should be abided by; if both
parties agreed to renew the contract, they could enter into
such a discussion.
Representative Carpenter opposed the amendment. He stated
the committee had not wanted to take many of the
administration's recommendations on budget cuts, but the
committee was willing to pass intent language on policy
matters. He thought the committee should focus its
attention on fiscal matters and have the courage to address
the budget deficit with meaningful cuts. He stated the
committee had cut approximately $59 million from a $3
billion budget.
Co-Chair Wilson MAINTAINED her OBJECTION.
Representative Josephson provided wrap up on the amendment.
He clarified that the committee had cut much more than $59
million. He pointed out the committee had cut more than
that in the cut to school bond debt reimbursement alone.
The committee had heard from the department about hospitals
covering two functions. He noted that Representative Knopp
had spoken about long-term care functions, which were also
functions of critical access hospitals. He stressed that
the department had approached the entities and had entered
into the contracts in good faith. He believed the
department should be required to comply with the contracts.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Johnston, Knopp, LeBon, Merrick,
Ortiz, Wilson, Foster
OPPOSED: Tilton, Carpenter, Sullivan-Leonard
The MOTION PASSED (8/3). There being NO further OBJECTION,
Amendment H HSS 17 was ADOPTED.
5:37:17 PM
Representative Tilton WITHDREW Amendment H HSS 18 (copy on
file).
Representative Tilton MOVED to ADOPT Amendments H HSS 19
and H HSS 20 (copy on file):
Medicaid Services
H HSS 19 - Limitation on Medicaid funding for
abortions.
Wordage:
No money appropriated in this appropriation may be
expended for an abortion that is not a mandatory
service required under AS 47.07.030(a). The money
appropriated for Health and Social Services may be
expended only for mandatory services required under
Title XIX of the Social Security Act and for optional
services offered by the state under the state plan for
medical assistance that has been approved by the
United States Department of Health and Human Services.
Explanation:
Leg. Legal Memo 31-GH1905R.5 attached
Medicaid Services
H HSS 20 - Decrement the UGF amount expended on
abortions in FY18
In FY2018 the Alaska Medicaid program paid for
abortions for 805 women at a cost of $334,669.11(per
the Department of Health and Social Services).
1004 Gen Fund {UGF) -334.7
Co-Chair Wilson OBJECTED for discussion.
Representative Tilton reviewed the amendments. The
amendments would add intent language into the budget to put
limitations on Medicaid spending for abortions. The
amendments would also remove $334,000 that had been paid as
the state portion for abortions that were not medically
necessary.
Representative Merrick supported the amendments. She shared
that she had been adopted at birth from an unwed teenager.
She stated that it broke her heart the state had paid for
805 babies to not get the chance she had. She shared that
her father and mother had passed away and she could not
think of a better way to honor their legacy than to
advocate for those babies. She believed using state funds
for abortions was morally and ethically wrong.
5:39:08 PM
Representative Carpenter was in favor of the amendments. He
shared that two days back marked the anniversary of his
family losing its first grandbaby. He expressed his belief
that abortion was wrong. He thought there was a better way
to deal with the problems in people's lives. He stated
people had a choice and could choose to adopt.
5:40:48 PM
Representative Sullivan-Leonard supported the amendments.
She recalled Alaskans testifying they wanted to see a moral
budget. She argued that the state's budget was not moral.
She believed the amendments were moral. She did not support
using state funds for abortions. She spoke about people who
would have loved to adopt a baby. She questioned when it
was the government's role to be involved with moral issues.
Representative Knopp expressed support for the amendments.
He shared that as a Catholic he was prolife, but he
characterized his views as "prolife with a slant." He
thought there was substantial value in a women's right to
choose. However, his preference was there would be no
abortions. He thought the use of public funds and Medicaid
services made it almost too convenient to have an abortion.
He would not oppose abortions and believed there were
different circumstances for everyone. However, he thought
the use of public funds may cause abortions to run rampant.
5:43:12 PM
Vice-Chair Ortiz agreed on the difficulty of the topic. He
associated his comments with comments made by
Representative Knopp. He shared that he came from a
Catholic family and was pro-life. He pointed out that the
particular amendments were not about ending abortions, but
about reducing access to abortions for those who were less
advantaged.
Co-Chair Wilson discussed that a few years ago there had
been a bill before the legislature, and she recalled the
same argument had been made - that passing the bill would
prevent individuals from finding the resources. She
disputed that claim. She pointed to Planned Parenthood as a
resource. She thought the organization made it too easy for
people, but it was the organization's choice. She believed
the amendments were not about whether a woman had a choice.
She would vote for the amendments because she liked
Representative Merrick and because it was public money
going to something that was not medically necessary. She
believed that sometimes if the choice was made a little
harder, people had to think more about a decision. She
stated it did not necessarily mean someone could not find
the service. She believed there should be parameters around
the subject. She thanked Representative Merrick for sharing
her story.
5:45:40 PM
Vice-Chair Johnston stated her only concern was about
whether the amendment would survive a legal challenge.
Representative Tilton answered that the dollars had been
decreased from the budget for several years and the
decreases had survived.
Vice-Chair Johnston had seen it the last two years. She was
concerned "it has yet to pass and be signed." She asked if
she was accurate.
Representative Tilton answered that the increment had been
included in the budget and the budget had been reduced.
Vice-Chair Johnston observed that in FY 18 there had been
805 [abortions via the Medicaid program]. She asked if the
item passed the prior year.
Representative Tilton replied the funding had been in the
budget for FY 19, "not, the dollar amount was reduced in FY
19."
Vice-Chair Johnston shared that she would never personally
have an abortion. She believed the best thing the state
could do was to always offer birth control. There was an
aspect of having public funds used for abortions that she
found concerning.
Representative LeBon thanked the sponsor for bringing the
amendments forward. He expressed his support.
Co-Chair Wilson WITHDREW her OBJECTION to Amendments H HSS
19 and H HSS 20.
Representative Josephson OBJECTED.
5:48:29 PM
Representative Josephson recognized the validity of the
positions espoused by other members and would never engage
in a debate about those positions. However, the language
had been tested and found unconstitutional. He clarified
that did not mean he believed members should not support
the amendment. He needed a roll call to be taken on the
amendments.
Representative Tilton thanked members for sharing their
personal stories. She asked for members' support.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Johnston, Knopp, LeBon, Merrick,
Ortiz, Sullivan-Leonard, Tilton, Wilson
OPPOSED: Josephson, Foster
The MOTION PASSED (9/2). There being NO further OBJECTION,
Amendments H HSS 19 and H HSS 20 were ADOPTED.
5:50:25 PM
Vice-Chair Johnston MOVED to ADOPT Amendment H HSS 21 (copy
on file):
Alaska Pioneer Homes Pioneer Homes
GA 3/27 Implement Alaska Pioneer Homes Rate Increase
This fund source adjustment decreases the federal
receipt authority in the Pioneer Homes to align the
amount requested with what the Department believes is
realizable. There are also adjustments to the
interagency receipt authority in recognition of
initiatives to increase Medicaid reimbursement rates
in tandem with private-pay rate increases reflected as
general fund program receipts. This fund change
reverses a portion fund change reflected in the
original FY2020 Governor's Amended request.
1002 Fed Rcpts (Fed) -3,741.0
1005 GF/Prgm (DGF) -5,855.4
10071/A Rcpts (Other) 9,596.4
Co-Chair Wilson OBJECTED for discussion.
Vice-Chair Johnston reviewed the amendment related to
interagency receipt authority of $9,596,400 to anticipate
increased Medicaid reimbursement and private pay receipts.
Co-Chair Wilson understood it was a governor's amendment.
She assumed the Medicaid portion would be [paid with] the
federal receipts. She asked if the General Fund program
funds were related to insurance. She asked for verification
the amendment would not do anything for those people who
did not have the funds.
Vice-Chair Johnston agreed.
Representative Josephson asked Co-Chair Wilson to repeat
her question.
Co-Chair Wilson complied. She believed the General Fund
program must be receipts for the anticipation of those with
long care insurance. She assumed the federal receipts
related to Medicaid for the increase to the Pioneer Homes.
She wanted to make sure "that what we weren't looking at,
with people who didn't have the funds, that this somehow
was an increase on those individuals." She had been told
the amendment would not affect those individuals who
currently did not have insurance and were not on Medicaid.
5:52:30 PM
AT EASE
5:55:33 PM
RECONVENED
Representative Josephson reported his question had been
answered.
Co-Chair Wilson WITHDREW her OBJECTION to the amendment.
There being NO further OBJECTION, H HSS 21 was ADOPTED.
Representative Tilton WITHDREW H HSS 22 (copy on file).
5:57:07 PM
RECESSED
6:46:34 PM
RECONVENED
Co-Chair Foster explained the committee would hear a
language section amendment.
Representative Carpenter MOVED to ADOPT Language Section
Amendment 16, 31-GH1905\R.32 (Bruce, 4/1/19) (copy on
file):
Agency: Education & Early Dev
Appropriation: K-12 Aid to School Districts
Allocation: Additional Foundation Funding
Transaction Details
Title: Delete $30 Million Outside BSA
Section: Language
Type: Dec
Grants: -30,000.0
Funding
1004 Gen Fund -30,000.0
Delete additional $30 million outside of the BSA.
Page 76, line 27:
Delete all material and insert:
"* Sec. 30. Section 4, ch. 6, SLA 2018, and sec.
27(c), ch. 19, SLA 2018, are repealed."
Co-Chair Wilson OBJECTED.
Representative Carpenter explained the amendment was a
repeal of the $30 million funding outside the Base Student
Allocation (BSA) from the previous session.
Representative Josephson explained that the funding was
part of a settlement of the legislative session in FY 18
that included passage of SB 287 (curriculum monies and
other features). The BSA had not been raised in a number of
years and instead of fighting over the BSA (due to the
perceived permanency it created in the budget) the
legislature had added the money. He opposed changing course
and believed the money was necessary.
6:49:25 PM
Representative Knopp spoke against the amendment. He
relayed he had crafted the same amendment and had
considered introducing it. He noted that he did not expect
the state's fiscal situation to improve in the next couple
of years and he had been concerned about the $20 million
for the FY 18 and FY 19 and the $30 million for FY 20. He
did not want schools to start to count on the funds going
forward. He reasoned that because the budget needed to be
reduced and the increment had not yet been appropriated or
spent by districts, he thought making the reduction was
appropriate. However, since the school bond debt
reimbursement had been repealed, he would not support the
amendment. He explained that his district's percentage of
the [$30 million] amount was around $1 million. He believed
districts would feel the impact in the local contributions
that the borough provided the school district. He hoped the
[$30 million] increment would offset the reduction [to
school bond debt reimbursement].
Representative Sullivan-Leonard directed a question to
Vice-Chair Ortiz, the DEED subcommittee chair, and asked
what the education budget had been for FY 18, FY 19, and FY
20.
Co-Chair Wilson replied that in FY 18 there had been no
additional funds outside of the BSA. The total had been
about $1.3 billion. An additional $20 million had been
added for FY 19, although it had not yet been given to
districts - she remarked the funds were "still being held
hostage." The last figure she had seen was about $1.3
billion to education - the total amount fluctuated. They
had kept the BSA to the same amount for FY 20 with the
addition of the $30 million [one-time] funding outside the
BSA.
Representative Sullivan-Leonard was trying to determine how
much education funding had increased over the past three
years or whether funding had remained stable. She stated
she was interested in total cost.
Co-Chair Wilson assumed Representative Sullivan-Leonard was
interested in funds going to school districts and not the
budget for the department. She referenced the approximately
$1.2 billion for the BSA and explained that student numbers
had decreased but special needs had increased; therefore,
the cost had been fairly steady from year-to-year. The only
increases to districts had been in the BSA.
6:53:14 PM
AT EASE
6:55:48 PM
RECONVENED
Representative Sullivan-Leonard reported her question had
been answered.
Co-Chair Wilson would not support the amendment at present.
She saw the $30 million as an opportunity. She stated
currently there was $20 million going in. She considered
that perhaps the money could be split. She wondered about
incentivizing behavior the legislature may want to see. She
believed there was an opportunity to do so with the $30
million. She did not know what that incentivization would
look like at present; therefore, she was not prepared to
offer an amendment related to the subject. She thought the
legislature needed to address the situation with the DEED
commissioner. She noted the commissioner had a plan and was
looking for ways to incentivize things such as 3rd grade
reading. She continued it would not be ongoing operating
items, but things that may need some capital help such as
curriculum, testing, or other. She stated the legislature
had done the same thing in the past with security - items
that were capital projects.
Co-Chair Wilson considered whether there was an opportunity
to step down from the $20 million that was already in the
school budgets and get some better data in the next couple
of years for things like 3rd grade reading, high school
outcomes, graduation rates, and other. She stated it was
tied to SB 26 [Permanent Fund percent of market value
(POMV) legislation that passed the legislature in 2018] and
she had not voted for the bill because of the $30 million.
She clarified it was not because she did not want schools
to have money. She recalled listening to everyone talk
about wanting different outcomes. She thought perhaps it
was a good way to utilize the funds to jump start something
that schools did not have the opportunity to do because of
a lack of funds. She reasoned there was still more time in
the process to consider those avenues.
6:58:12 PM
Representative Carpenter provided wrap up on the amendment.
He spoke to the need to address the state's budget deficit
through spending cuts. He understood the concept of
incentivizing one action for another. He stated that "we
get the POMV and the reduction of Permanent Fund Dividends
to give $30 million to schools." He continued the past
legislative body had opted against the difficult task of
fixing the BSA. He added he had not been in the legislature
at the time and it was hard to criticize action taken
before he was in the legislature. He pointed out the action
tied the hands of a future legislature. He thought budget
items needed to be within an election cycle, but currently
the legislature's hands were tied with forward funding by a
past legislature. He stated that conditions had changed,
and the legislature needed to have the ability to address
the budget deficit. He had a philosophical problem with
incentivizing schools to do something they should be doing
already. He was opposed to tying better results to more
money, but he was open to creative solutions.
Co-Chair Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Sullivan-Leonard, Tilton, Carpenter
OPPOSED: Josephson, Johnston, Knopp, LeBon, Merrick, Ortiz,
Wilson, Foster
The MOTION to adopt Amendment LS 16 FAILED (3/8).
7:00:44 PM
Co-Chair Wilson MOVED to ADOPT Amendments H LAW 1, 2, 3, 4,
5, and 6 (copy on file):
Criminal Division
First Judicial District
H LAW 1 - First Judicial District Reduction
Remove one prosecutor and one support staff in Juneau,
and one support staff in Ketchikan.
1004 Gen Fund (UGF) -337.8
Second Judicial District
H LAW 2 - Delete one support staff in Nome
Delete one support staff (97.8)
1004 Gen Fund (UGF) -97.8
Third Judicial District: Anchorage
H LAW 3 - Delete two prosecutors and one support staff
in Anchorage
Delete two prosecutors and one support staff in the
Third Judicial District.
1004 Gen Fund (UGF) -426.9
Third Judicial District: Outside Anchorage
H LAW 4 - Delete Positions from Third Judicial
District
Delete two support staff from the Third Judicial
District.
1004 Gen Fund (UGF) -183.9
Fourth Judicial District
H LAW 5 - Delete one prosecutor and one support staff
in Fairbanks and one support staff in Bethel
Delete one prosecutor and one support staff in
Fairbanks and one support staff in Bethel.
1004 Gen Fund (UGF) -260.1
Criminal Appeals/Special Litigation
H LAW 6 - Delete one prosecutor and two support staff
in Anchorage
Delete one prosecutor and two support staff in
Anchorage.
1004 Gen Fund (UGF) -292.0
Representative Josephson OBJECTED.
Co-Chair Wilson reviewed the amendments. She explained the
amendments pertained to additions that had been made to the
Department of Law (DOL) with the anticipation they may
never see the light of day "because of where the crime
bills currently are." She had committed to working with
Representative Josephson on looking at the positions when
the committee received the crime bill. She stated that the
committee had never added positions in anticipation of
seeing or not seeing a bill. She was concerned about adding
positions to one department, but not another. She thought
adding the positions to one department may be nice for that
department, but harder for others. She wanted to begin
looking at things outside of silos. She believed the best
way to do so would be when a crime bill came to the
committee. She was asking to remove the positions for the
aforementioned reasons. She planned to revisit the issue in
the near future, hopefully prior to May 15.
Representative Josephson explained that the funds had not
been designed to supplant or replace anything that would
come from the crime bills (either SB 32 or HB 49 - the
bills that carried larger fiscal notes due to increased
sentencing that would result). He stressed that even if
there were no crime bills, the individuals impacted by the
amendments were needed, due to "absurdly great" caseloads.
Additionally, the U.S. Department of Justice had taken
(with $10,000 incentives) prosecutors from the district
attorney's office. He read from a recent letter from the
Department of Law addressed to Senator Bert Stedman: "The
overall turnover rate in for the Criminal Division in
calendar year 2018 - 93 of 213 positions." He emphasized
that the number reflected a 44 percent turnover rate (37
percent of prosecutors, 41 percent of paralegals, and 66
percent of legal support staff). He pointed out that two-
thirds of the support staff wanted out because they were
given an impossible task. He had never seen anything like
it. He reported the subcommittee had heard that in FY 14,
the Criminal Division had 245 budgeted positions; the
division currently had 212 budgeted positions.
7:04:43 PM
Representative Josephson read an excerpt from the
governor's proposed operating budget DOL agency narrative:
"With fewer staff, the Criminal Division must screen
case referrals to focus on the most serious crimes,
with an emphasis on sexual assault and other violent
crimes and taking fewer cases to trial. At the same
time that the Criminal Division's budget was being
reduced, the Criminal Division saw a dramatic increase
in the number of felony prosecutions filed in court.
Felony filings have increased by 18 percent between
2017 and 2018. While all types of felonies have
increased, the largest increases have been in the more
serious types of crime - felony assaults and
robberies. In addition to an increase in the felony
workload, the number of misdemeanors being filed has
also increased. With such dramatic increases in
workload, combined with staffing reductions, the
Criminal Division has been forced to resolve cases
short of trial and often at a lower level than
originally charged."
Representative Josephson noted the DOL agency narrative
also talked about morale issues and reductions in plea,
which he recognized was a way to resolve a case. He
submitted that the department was in a state of crisis. The
positions were not connected to a bill but were connected
to the budget. He stated the positions were part of what
the previous administration had said was needed as part of
the Public Safety Action Plan. The action plan recommended
five prosecutor positions per year for a three-year period.
The amendment would impact those five positions.
7:06:20 PM
AT EASE
7:08:01 PM
RECONVENED
Representative LeBon asked if the positions were proposed
or filled.
Co-Chair Wilson answered the positions were new and had not
yet been filled.
Representative Sullivan-Leonard had heard from the
administration that it wanted to repeal SB 91, that
prosecutors were needed, and that the state needed to
prosecute criminals. She wanted to know how the amendments
helped the cause to get criminals prosecuted and behind
bars.
Co-Chair Wilson replied that was exactly her point - that
the issue did not only involve one agency. She discussed
that part of the current governor's public safety plan was
to address the concerns within whatever [crime] bills may
come before the committee. She elaborated the concerns were
addressed and considered multiple needs such as more
prosecutors and conflict attorneys, and whether courts
should stay open on Fridays. She emphasized it could not be
a silo issue. She thought the positions the amendments
would eliminate addressed the issue in a silo. She
clarified she was not claiming the positions were
unnecessary, but she thought taking care of only one agency
would not make things work any quicker.
7:10:02 PM
Representative Sullivan-Leonard wondered why the positions
would be removed if they were connected to the governor's
crime bills.
Co-Chair Wilson answered that was not the way the process
worked. She clarified the committee needed to wait until it
had the bills to know exactly what the bills would do (i.e.
if the bills would increase jail sentences or change more
penalties from misdemeanors to felonies). She explained the
changes would all fall into the fiscal notes. She continued
that if the committee decided to pass a crime bill, there
would be discussion about the number of prosecutors needed
and other. There would be a discussion with all involved
agencies present to ensure they had the desired number of
positions. She highlighted that the bills were not
currently in the committee's possession.
Representative Carpenter found it difficult to have
conversations about future things. He pointed to the
Department of Corrections problem the legislature was
trying to solve - contingent on future action. He was
frustrated that the current political climate was
indicating that most of the governor's requests were being
challenged by the [House] majority. He questioned whether
the committee would see crime bills come forward. He
wondered where the issues would be addressed if the
committee did not address them in the budget. He feared the
public would be left scratching their heads at the end of
session as to why the legislature failed to act.
7:12:24 PM
Representative Knopp was uncertain how he would vote on the
amendment. He did not like adding positions. He stated that
the issue of justice reform was part of a broader package.
He shared that the DOC deputy commissioner had told him
there were over 2,000 people on currently out on pretrial
release. He considered the request for prosecutors and
staff and asked what happened to the right to a speedy
trial. He thought there was no such thing anymore. He
wondered how long the 2,000 individuals would be out on
pretrial release before their trial took place. He wondered
about the reason they were not in trial. He had been
surprised to learn about the number of individuals out on
pretrial release. He considered that the program was fairly
new.
Representative Josephson asked for a repeat of the
question.
Representative Knopp clarified there were 2,000 people out
on the pretrial program that had been in place for
approximately one year. He thought that number seemed high.
He asked if adding the positions would expedite the process
to get through trials more quickly. He asked if a lack of
prosecutors was a barrier to getting work done.
Representative Josephson answered the state had always had
pretrial because people had been released. He affirmed
there were more people released (which had been the point
under SB 91), although SB 54 [crime reform legislation
passed in 2017] reined some of that in. He explained that
typically it was the defense that postponed trial. There
was a 90-day or 120-day speedy trial rule called Rule 45
and prosecutors could not generally ask for an extension of
the clock (the clock began when a person was charged). He
detailed that the defense could delay trial for various
reasons (e.g. a search warrant should have been filed, a
stop had been made illegally, etcetera). He explained that
prosecutors could not delay trial - they were required to
have a court room available for before trial if they wanted
the fastest trial possible. He added that if prosecutors
did not settle cases there would be more trials.
7:15:19 PM
Representative Knopp replied the answer was helpful, but he
speculated it may not be helpful in the way Representative
Josephson would like. He detailed that Representative
Josephson had indicated it was the defense attorneys
causing delays, not the prosecutors. He had been trying to
discern where the problem resided.
Representative Sullivan-Leonard found it to be surprising
that the arts and humanities seemed to be more important
than getting prosecutors into DOL. She did not believe the
arts were more important than prosecutors and fighting
crime. She did not support the amendment.
Representative Tilton agreed that increasing the number of
prosecutors was needed. She noted she had been one of the
original "no votes" on SB 91 and public safety was at the
forefront of her thoughts. She clarified that the addition
of the positions was not a request of the current
administration but had come from a Public Safety Action
Plan from the previous administration.
Co-Chair Wilson confirmed that the positions had not been
requested by the governor; they had been added in
subcommittee after discussions with DOL. She stated that
the Public Safety Action Plan was the former governor's
plan.
7:17:33 PM
AT EASE
7:26:36 PM
RECONVENED
Representative Carpenter highlighted the House had not yet
seen a bill that would result in a comprehensive
improvement to the criminal justice problem. He was opposed
to throwing a small amount of money and few positions at
the problem without a comprehensive plan. He thought the
public was communicating its desire for the legislature to
address crime in a major way. He believed it would be
fiscally responsible to spend money on a comprehensive
plan, not on a piecemeal approach. He supported the
amendment.
Representative Josephson MAINTAINED his OBJECTION.
Co-Chair Wilson provided wrap up on the amendments. She
reported that the current pretrial population was 1,075.
She believed the number was still too large. She reiterated
her earlier statements that she did not support addressing
the problem in silos. She stated the positions were only
one portion of a much bigger picture. She did not know
whether the positions were needed because it was not
possible to fix only one part of the problem and expect
"all the wheels to start turning." She stated the committee
had heard the same thing from prosecutors. She thought it
was likely one of the reasons why "admin" had not talked
about prosecutors because they knew some type of crime bill
would be addressed by the committee.
Co-Chair Wilson stated her constituents wanted the crime
bill [SB 91] changed. She referenced an earlier statement
that there were numerous DOL employees who had left. The
subject reminded her of a conversation with DOC where there
had been 70 vacancies and the department had wanted to add
10 more positions. She thought the idea was backwards. She
questioned how filling the positions would impact cases.
She spoke to the importance of fixing the overall system.
She highlighted that 45 percent of the state's inmates were
unsentenced sitting in jail. She emphasized there was a
system problem. She was requesting to focus on the system
as a whole, instead of on one part. She wanted to see if
the department was able to fill vacancies to see how it
would impact caseloads.
A roll call vote was taken on the motion.
IN FAVOR: Johnston, Knopp, LeBon, Tilton, Carpenter, Wilson
OPPOSED: Merrick, Sullivan-Leonard, Josephson, Ortiz,
Foster
The MOTION PASSED (6/5). There being NO further OBJECTION,
Amendments H LAW 1, 2, 3, 4, 5, and 6 were ADOPTED.
7:31:19 PM
Representative Merrick MOVED to ADOPT Amendment H DNR 1
(copy on file):
Administration & Support Services
Recorder's Office/Uniform Commercial Code
H DNR 1 - Recorder's Office Consolidation and
Efficiencies-Full
Restore Governor's FY2020 request to realize
additional efficiencies by consolidating the
Recorder's Offices. Delete five positions (two from
Juneau, two from Palmer, one from Fairbanks), and
relocate seven positions to Anchorage for
centralization (two from Juneau, one from Palmer, two
from Fairbanks, two from Kenai)
1005 GF/Prgm (DGF) -408.0
Representative Josephson OBJECTED.
Representative Merrick reviewed the amendment with a
prepared statement:
This amendment restores the governor's FY 2020 request
to realize additional efficiencies by consolidating
the Recorder's Offices. This will build on
consolidation efforts started in FY 16 and 18 by
closing the Fairbanks, Kenai, Juneau, and Palmer
Recording Offices. Offices will close for over the
counter customers and research and customers can
continue to record electronically by mail and in
person in Anchorage. Electronic recording, or e-
recording was first implemented in 2012 and available
statewide in 2013. Each year the percentage of e-
recording goes up, reducing the need to maintain
expensive offices throughout the state. Currently, 55
percent of documents are e-recorded, and 70 percent of
the revenue brought in is via e-recording. In FY 2016,
six single staff offices were closed, and five
positions deleted. Revenue generated from recordings
and filings were not affected by the closures as e-
recording and mail-in recording are still available.
Efforts in FY 2017 continued the promotion of e-
recording and streamlining process in the main
offices, which were Anchorage, Fairbanks, Palmer,
Juneau, and Kenai. The FY 2018 deleted seven positions
further consolidating offices. This FY 2020 reduction
would result in the deletion of five positions, two
from Juneau, two from Palmer, and one from Fairbanks;
and the relocation of seven positions to Anchorage for
centralization: two from Juneau, one from Palmer, two
from Fairbanks, two from Kenai.
7:33:23 PM
Co-Chair Foster asked whether Representative Merrick had
wanted to bundle two amendments [the answer was no].
Representative Knopp opposed the amendment. He reported the
issue had been heard in the Department of Natural Resources
(DNR) subcommittee and the subcommittee had overwhelmingly
supported the Recorder's Office increment. He shared that
he had supported the Kenai office and had worked with the
senator from Fairbanks who wanted to keep that office as
well. He noted representatives from Mat-Su and Juneau chose
to keep those offices as well. He did not believe the
proposed consolidation made sense. He explained that the
department was net-positive - it generated about $5.1
million annually and spent about $3.8 million annually. He
pointed out it sent about $1.5 million to the General Fund;
it paid for itself and generated additional revenue. He
recognized that 55 to 60 percent of the recording could be
done online, but about 40 to 45 percent could not be done
online (surveyors had to manually record their paper and
hand deliver it). He detailed that in Fairbanks and other
locations miners had to go to the Recorder's Office to file
their permit paperwork.
Representative Knopp pointed out that the administration
had acknowledged the need and considered a temporary office
in Mat-Su. He stated that some of the positions being
transferred would be part-time and move to full-time. He
explained they wanted to move the Kenai office to save on
lease space. He looked at the cost of lease space per
square foot - he noted there was room in the Kenai LIO
office. They had considered moving the Recorder's Office,
but it turned out the state charged itself more per square
foot for interagency receipts - $1.75 per square foot
versus $1.56 that they paid to lease the space. He
underscored the amendment would take services away from
people - about 40 percent of the services could not be done
online and there was no net gain in the change. He
reiterated having offices around the state was broadly
supported by legislators in those districts.
7:36:51 PM
Representative Carpenter stated it was an opportunity to
not do things as usual. He understood that recording was
computer-based and could be done by the private sector. He
continued that the policies and procedures were similar to
how the Division of Motor Vehicles (DMV) was working with
the private sector to provide services. He stated it was an
opportunity to move a profit center to the private sector,
which would grow the private sector. He believed it was the
right thing to do to get the state's economy going.
Representative LeBon floated the idea of a friendly
amendment to complete the consolidation of the offices in
Fairbanks.
7:37:51 PM
AT EASE
7:39:05 PM
RECONVENED
Representative Merrick did not support the proposal
suggested by Representative LeBon.
Co-Chair Wilson MAINTAINED the OBJECTION.
Representative Merrick provided wrap up on the amendment.
She detailed that all of the incoming revenue would
continue to come in, but at a greater percentage. She
emphasized that at a time when the state was looking to
increase revenue and decrease expenses, the consolidation
was a great opportunity to do so. She stressed that
everything could be done online, with the exception of
plats, which could be done by the Postal Service. She
detailed that any recording could be printed out, signed,
and mailed. She believed the consolidation was a great
opportunity to save money and increase revenues.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter,
Johnston
OPPOSED: Knopp, LeBon, Ortiz, Josephson, Wilson, Foster
The MOTION to adopt Amendment H DNR 2 FAILED (5/6).
7:41:18 PM
Representative Merrick MOVED to ADOPT Amendment H DNR 2
(copy on file):
Administration & Support Services
Recorder's Office/Uniform Commercial Code
H DNR 2 - Recorder's Office Consolidation and
Efficiencies-Partial
Restore part of Governor's FY2020 request to realize
additional efficiencies by consolidating the
Recorder's Offices. Delete four positions (two from
Juneau, two from Palmer), and relocate three positions
to Anchorage for centralization (two from Juneau, one
from Palmer).
1005 GF/Prgm (DGF) -301.0
Co-Chair Wilson OBJECTED for discussion.
Representative Merrick reviewed the amendment with a
prepared statement:
This amendment modifies the governor's FY 2020 request
to realize additional efficiencies by consolidating
the Recorder's Offices as proposed in the amendment
just discussed. Similarly, this will build on prior
consolidation efforts, but will close two of the four
Recording Offices - Juneau and Palmer, leaving offices
in Fairbanks and Kenai open. This should address the
concerns that the committee raised about seasonal need
for recording in these areas. This FY 2020 reduction
will result in the deletion of four positions - two
from Juneau and two from Palmer - and the relocation
of three positions to Anchorage for centralization
(two from Juneau, one from Palmer).
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment H DNR 2 was
ADOPTED.
7:42:53 PM
Representative LeBon MOVED to ADOPT Amendments H DNR 3, H
DNR 4, and H UA 5 [motion subsequently corrected to
Amendment H UA 6] (copy on file):
Agriculture
Agricultural Development
H DNR 3 - Transfer of Similar Services from Division
of Agriculture to UA Cooperative Extension Service
Linked to H UOA 6 - Transfer of Similar Services from
Division of Agriculture to UA Cooperative Extension
Service
This would transfer 591.7 and 3PFT positions from the
Division of Agriculture, Agricultural Development to
the University of Alaska, Fairbanks Campus with the
intended destination of the Cooperative Extension
Service (CES). CES and the Division of Agriculture
perform similar tasks in respect to marketing,
education, and outreach.
This is the marketing only leaving all other functions
in the division. It does not affect the Plant
Materials Center or Agricultural Revolving Loan Fund.
The functions of the marketing program align with the
functions of CES. CES has a greater reach statewide
with more office locations and resources than the
Division of Agriculture's limited locations. This
transfer is done with the intent of expanded service
with more efficient use of state resources
1002 Fed Repts (Fed) -424.4
1004 Gen Fund (UGF) -162.3
1005 GF/Prgm {DGF) -5.0
Agriculture
Agricultural Development
H DNR 4 - Deletion of Division of Agriculture
Positions
This deletes Publication Specialist II (PCN 10-3074)
and Development Specialist II (PCN 10-3072).
The Publication Specialist II is a vacant position
with responsibilities and functions already delivered
by Cooperative Extension Service.
The Development Specialist II is a management position
that would no longer be necessary with the transfer of
the marketing office to the University of Alaska
Cooperative Extension Service.
1004 Gen Fund (UGF) -229.2
University of Alaska
Fairbanks Campus
H UOA 6 - Transfer of Similar Services from Division
of Agriculture to UA Cooperative Extension Service
Linked to H DNR 3 - Transfer of Similar Services from
Division of Agriculture to UA Cooperative Extension
Service ATrout 355777
This would transfer 591.7 and 3PFT positions from the
Division of Agriculture, Agricultural Development to
the University of Alaska, Fairbanks Campus with the
intended destination of the Cooperative Extension
Service(CES). CES and the Division of Agriculture
perform similar tasks in respect to marketing,
education, and outreach. This is the marketing only
leaving all other functions in the division. It does
not affect the Plant Materials Center or Agricultural
Revolving Loan Fund. The functions of the marketing
program align with the functions of CES. CES has a
greater reach statewide with more office locations and
resources than the Division of Agriculture's limited
locations. This transfer is done with the intent of
expanded service with more efficient use of state
resources
1002 Fed Repts (Fed) 424.4
1004 Gen Fund (UGF) 162.3
1005 GF/Prgm (DGF) 5.0
Co-Chair Wilson OBJECTED for discussion.
Representative LeBon explained the amendments. He
referenced a recent presentation to the committee by DNR
that included a suggestion to eliminate the Division of
Agriculture. He thought the suggestion by the
administration had been a little bold. The amendments aimed
to take essential services from the Division of Agriculture
and protect them under the University of Alaska Cooperative
Extension Service. He had received feedback on his
suggestion and reported that there was some opposition to
the idea. He highlighted Alaska Housing Finance Corporation
(AHFC) and Alaska Industrial Development and Export
Authority (AIDEA) as an example of two worlds that balanced
but did not overlap. He explained that the worlds of the
Division of Agriculture and Cooperative Extension Service
overlapped. He reported there was significant commonality
in services provided. He shared that he had reached out to
the University and had received a response from the
Chancellor's Office. He requested an "at ease."
7:46:24 PM
AT EASE
7:47:20 PM
RECONVENED
Representative LeBon corrected his earlier motion to
included Amendment H UA 6 instead of Amendment H UA 5.
Co-Chair Foster clarified the motion currently being
considered.
Representative LeBon believed a deeper dive was needed on
the issue. He reported he had heard back from the
University of Alaska - Fairbanks (UAF) chancellor who had
communicated that UAF was prepared to accept the positions,
but they had some concerns that needed vetting. He planned
to make it a summer project to dig into the Division of
Agriculture and the Cooperative Extension Service to
identify the commonality in services they provide and
determine the clientele of both entities. He thought he
could also take a look at their revolving loan program. He
thought the issue deserved additional study. He thought
Representative Carpenter may want to join him in taking a
look at the issue, given his knowledge about the farming
industry. He added the USDA [United States Department of
Agriculture] was also a player. He wanted to determine the
existing duplication in services. He WITHDREW Amendments H
DNR 3, H DNR 4, and H UA 6.
7:49:26 PM
Representative Merrick MOVED to ADOPT Amendments H DNR 5
and H DNR 6 (copy on file). She explained that DNR had told
her it was not possible to have one of the amendments
without the other due to overlap.
Agriculture
Agricultural Development
H DNR 5 - Reduce Lower Priority Programs in
Agricultural Development
Allow the Department of Natural Resources to focus on
its core mission and preserve the highest priority
programs in the Division of Agriculture.
1002 Fed Rcpts (Fed) - 724.2
1004 Gen Fund {UGF) -525.9
1005 GF/Prgm (DGF) -6.5
1007 I/A Repts (other) -20.0
1021 Agric RLF (DGF) -79.3
1153 State Land (DGF) -176.9
Agriculture
North Latitude Plant Material Center
H DNR 6 - Reduce Lower Priority Programs in the North
Latitude Plant Material Center
Allow the Department of Natural Resources to focus on
its core mission and preserve the highest priority
programs in the Division of Agriculture
1002 Fed Repts {Fed) -148.4
1004 Gen Fund {UGF) -840.2
1005 GF/Prgm (OGF) -0.2
1007 I/A Rcpts (Other) -70.3
1108 Stat Desig (Other) -2.0
Representative Merrick clarified that there was not a move
to eliminate the Division of Agriculture. The effort was to
reduce lower priority programs in the division. She
reviewed the amendments with a prepared statement:
This amendment allows the Department of Natural
Resources to focus on its core mission and preserve
priority programs in the Division of Agriculture.
DNR's priorities are developing Alaska's resources,
fire protection, and natural disaster protection. The
department ranked programs high, medium, or low, based
on these priorities. Programs that will be maintained
include phytosanitary timber inspections, invasive
plants and pests, seed protection, cleaning and
testing, and agricultural land sales. Programs that
will be removed are agricultural marketing and the
farm to institution program. These reductions would
shift the economics of agriculture operations back to
market driven rather than state supported.
Co-Chair Wilson OBJECTED for discussion.
Representative Carpenter declared a conflict of interest
related to the phytosanitary inspections. He shared that he
owned a peony farm that would potentially use the
inspection service. He was intrigued by the cost savings
brought by the amendments and was in support.
7:51:42 PM
Representative Knopp did not support the amendments. He
reported the issue had been discussed by the DNR budget
subcommittee. He found it ironic many of the amendments
reflected the governor's requests that had resoundingly
been rejected by the budget subcommittees. He noted he had
no conflict of interest. He estimated the subcommittee had
received 150 to 200 letters, emails, phone calls, and
office visits regarding their concern about what was being
done to agriculture.
Representative Knopp recalled 15 to 20 years earlier the
state did not have much agriculture - the state had come a
long way. He thought the program was working in a sense. He
pointed to products going to the state's schools and the
Alaska Grown marketing that was state supported. He thought
that in a state that was open for business, he believed
agriculture was one of the industries slowly moving
forward. He noted it was not currently a major profit
maker, but some people were making money off agriculture.
He shared he had received emails from people in Southeast,
the Interior, Mat-Su, Kenai, and places in the state he had
not known agriculture was an issue.
7:53:52 PM
Co-Chair Wilson asked if the cut was unallocated and would
tell the Division of Agriculture to cut a certain number of
programs out of a list. Alternatively, she asked if it was
the sponsor's intent to specify the programs to be deleted.
Representative Merrick answered that the priorities from
the department.
Co-Chair Wilson asked for the priorities.
Representative Merrick relayed programs that would be
maintained included phytosanitary timber inspections,
invasive plants and pests, seed protection, cleaning and
testing, and agricultural land sales. Programs that would
be removed were agricultural marketing and the farm to
institution program.
Co-Chair Wilson asked if the farm to institutional program
was connected to the correctional center. She asked if they
were talking about closing a farm for corrections that had
one of the lowest costs in terms of inmates. She asked if
that farm would be closed. Alternatively, she wondered if
the amendment addressed a farm where the state was paying
private vendors to bring produce into correctional
institutions or schools.
Representative Merrick answered that the farm to
institution program promoted the use of Alaskan grown
specialty crops in institutions including schools,
correctional facilities, and hospitals. She clarified the
amendment did not pertain to the farm itself, it was
related to the marketing of farms.
Representative LeBon stated he planned to do a deeper dive
in the interim related to farmers, the cooperative
extension, and how the USDA intermingled with all of the
programs. He would oppose the amendment because he wanted
to find out more about the issues.
Representative Josephson was disinclined to support the
amendments. He was told that some of the many duties of the
marketing team included working on developing institutional
and international retail markets for Alaska's agricultural
industry, the enforcement of proper labeling Alaskan
products, the federally required country of origin labeling
in grocery stores, and managing grants (including the
specialty crop block grant) to industry for enhancing
markets and competitiveness of products. He stated that the
subject was not his forte. He spoke to the need to
diversify the state's economy and to reward strong efforts
and devoted people.
7:57:43 PM
Co-Chair Wilson MAINTAINED her OBJECTION.
Representative Merrick provided wrap up on the amendments.
She reiterated the amendments would remove agricultural
marketing and the farm to institution programs only. The
amendments would save the state $2.5 million, which she
believed was a good investment. She spoke to an earlier
statement that the amendments had been rejected in
subcommittee and pointed out that the legislative process
allowed for offering the amendments to the full committee
in order for all members to participate in the vote. She
believed the savings were worthwhile.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter,
Wilson
OPPOSED: LeBon, Ortiz, Josephson, Johnston, Knopp, Foster
The MOTION to adopt Amendments H DNR 5 and H DNR 6 FAILED
(5/6).
7:59:15 PM
Co-Chair Foster recognized Representative Sarah Rasmussen
in the audience.
Co-Chair Wilson MOVED to ADOPT Amendment H DNR 7 (copy on
file):
Agriculture
Agriculture Revolving Loan Program Administration
H DNR 7 - Reduce the funding for programs in the
Agriculture Revolving Loan Program.
This reduces the Agriculture Revolving Loan Fund by
approximately 50%.
1021 Agric RLF (DGF) -204.6
Vice-Chair Ortiz OBJECTED for discussion.
Co-Chair Wilson reviewed the amendment that would reduce
the Agriculture Revolving Loan Program by approximately 50
percent. She explained it had been some time since the
program had made any loans; the amendment would leave half
of the funds available for the program, in addition to any
incoming funds from existing loans. She recalled that
during her first year in the legislature all of the money
had been depleted and no one seemed to know where it had
gone. She remarked there must not have been good
accounting. She clarified she was not blaming the loan
program as she believed the funds had been used elsewhere
in DNR. She reported the legislature had appropriated more
funds to the program that year in order to have funds
available to loan out. She did not believe it was time for
the fund to completely go away. She detailed that reducing
the balance to $204,600 would still allow loans to be made
and the legislature could consider whether the program
still needed that amount in the following year. She
suggested that Representative LeBon may consider how the
change would interplay with his ideas [over the interim].
Representative Josephson asked for verification there was
about $400,000 in a fund that loaned money to people
interested in agriculture development, yet people were not
seeking to borrow from the fund.
Co-Chair Wilson clarified that it was only possible to
borrow from the fund if a person had been rejected for a
loan by a bank. She elaborated there were currently quite a
few loans that were bringing money back into the fund. She
remarked there were many regulations on agriculture, which
she believed needed to be reviewed if the goal was to see
the agriculture industry grow. She did not believe there
were as many people going into the agriculture business as
there had been in the past. She thought it was likely
family farms would begin to disappear. She communicated
that individuals had not utilized the fund as they had in
the past.
Representative Josephson asked if the $204,000 would be
repurposed to the General Fund.
Co-Chair Wilson replied in the affirmative. She noted the
funds had originally come from the General Fund.
Vice-Chair Ortiz asked when the revolving loan program for
agriculture had started, what the original balance had
been, and how many requests for loans there had been in the
past two years.
8:02:43 PM
Co-Chair Wilson replied she did not know the detailed
history of the fund. She reported it had been a couple of
years since any loans had gone out from the program. She
elaborated that the proposed reduction would cut the
balance in half, but there were quite a few past loans
being repaid and bringing additional money into the fund.
Representative Knopp shared that he had opposed the
proposal in subcommittee. He thought he may have been the
only opposition as it had passed almost unanimously. He
recognized the need to pull back the budget and understood
the fund had not been frequently utilized in recent years.
He pointed out that it had been used in the past. He
thought it was a reasonable compromise to reduce the
balance, while maintaining the program. He would support
the amendment.
Representative LeBon stated that in theory a revolving loan
amount did not go away, it revolved. He elaborated that a
loan was made for a purpose such as putting in a crop,
financing a piece of equipment, or for another working
capital need. He explained that when the money was paid
back it was reutilized by returning it to borrowers; the
cycle continued to repeat itself. He planned to look into
how the loan program was managed. He was interested in who
the borrowers were and to learn about their performance,
default rate, and delinquency rate.
Representative LeBon referenced Co-Chair Wilson's comment
that in the past money seemed to be missing from the fund.
He expressed doubt the money was actually missing, but
thought it may be lost because it had never been paid back.
He planned to find that information out as well. He
believed the program must have sets of policies,
procedures, standards, and underwriting rules and
conditions. He shared that he had made many loans in his 42
years as a banker, but he had never learned much about the
particular revolving loan program. He had done
participation loans with AIDEA, AHFC, the Bureau of Indian
Affairs, and more. He planned to vote against the amendment
in order to spend time looking into the whole picture.
8:05:44 PM
Vice-Chair Ortiz referenced Co-Chair Wilson's statement
that the funds had disappeared in the past. He asked if
there had been another reseeding of the program or if the
funds had reappeared.
Co-Chair Wilson replied that new money had been put in the
fund. She addressed Representative LeBon and highlighted
that the amendment would leave half the fund balance
intact. She shared that about 10 years back the funds had
disappeared because someone in the legislature had used
them. She did not believe the disappearance of funds had
anything to do with mismanagement of the program. She
believed the funds had been utilized for a DNR project. She
still wondered what happened to the money.
Representative LeBon stated the amount of money in the
program was secondary to the program. He considered the
quality of the program, how borrowers were treated, whether
credit decisions were sound, and what the terms and
conditions of a loan through the program were. He believed
those things were the most important component of the
process.
8:07:21 PM
Vice-Chair Ortiz MAINTAINED his OBJECTION.
Co-Chair Wilson provided wrap up on the amendment. She had
not taken all of the money from the fund because she
believed there was a purpose for the funds - there was
$200,000 remaining plus the money being repaid monthly. She
highlighted that the money had not been utilized and she
questioned why the money was sitting there when it could be
utilized for other projects unrelated to agriculture.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter,
Josephson, Johnston, Knopp, LeBon, Ortiz, Wilson, Foster
OPPOSED:
The MOTION PASSED (11/0). There being NO further OBJECTION,
Amendment H DNR 7 was ADOPTED.
8:09:14 PM
Representative Merrick MOVED to ADOPT Amendment H DNR 8
(copy on file):
Parks & Outdoor Recreation Parks Management & Access
H DNR 8 - Reorganization of Recreational Trails
Program
The Recreational Trails Program (RTP) administers a
$1,500.0 federal grant program for trail
infrastructure throughout the state. The RTP also
administers the snowmobile trail grooming grant
program. This decrement eliminates one position
associated with the program, streamlining the process
for efficiencies and administering the grant programs
through existing administrative and management
positions. This decrement of $100.0 capital
improvement project receipts has a corresponding
$100.0 general fund reduction in the capital budget.
1061 GIP Rcpts (Other) -100.0
Co-Chair Wilson OBJECTED for discussion.
Representative Merrick reviewed the amendment with a
prepared statement:
The Recreational Trails Program administers a $1,500.0
federal grant program for trail infrastructure
throughout the state. The RTP also administers the
snowmobile trail grooming grant program - this
amendment does not affect that program at all; that's
part of the capital budget. This will not affect it;
they just administer the grant. This amendment
eliminates one position in the Parks Management
Department. The department has indicated that they
would be able to absorb this decrement going from two
employees to one.
Vice-Chair Johnston asked if the position was in or out of
the office.
Representative Merrick believed it was in-office.
Co-Chair Wilson WITHDREW her OBJECTION.
Representative LeBon OBJECTED. He thought the program was
valuable and did not consume a significant amount of money.
He wanted the committee to go on the record with a vote on
the subject.
Representative Knopp reported the issue had been discussed
thoroughly in subcommittee. He noted that the subcommittee
had not felt one position was enough.
Co-Chair Wilson stated it was her understanding that the
program would not go away and would have one person
administering a grant, not two. The funds would still be
there. She had been curious why there had been funds for
the program in the operating budget because it all
pertained to capital grants. She believed there should be
one administrator for the grant. She thought the program
staff had likely grown when the state had money. She
concluded that because the state no longer had money, the
program could likely shrink down to a more appropriate size
with one administrator.
Representative LeBon MAINTAINED his OBJECTION.
Representative Merrick provided wrap up on the amendment.
She emphasized the amendment would not eliminate the
Recreational Trail Program but would eliminate one
position. The department had communicated it could absorb
the decrement. Additionally, DNR had shared that part of
the position's responsibility was counting money. She
explained that due to increases in technology, much of the
counting of money would no longer be necessary. The
workload would be decreased, and she believed one staff
could handle the responsibility.
8:12:47 PM
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Sullivan-Leonard, Tilton, Carpenter,
Johnston, Knopp, Merrick, Wilson
OPPOSED: LeBon, Josephson, Foster
The MOTION PASSED (8/3). There being NO further OBJECTION,
Amendment H DNR 8 was ADOPTED.
8:13:38 PM
Co-Chair Foster MOVED to ADOPT Amendment H DPS 1 (copy on
file):
Alaska State Troopers
Alaska State Trooper Detachments
H DPS 1 - Remove incorrect fund source added in a
salary adjustment
This is a technical correction that removes a fund
source that should not be included in the AST
Detachments' budget.
1055 IA/OIL HAZ (Other) -0.l
Co-Chair Wilson OBJECTED for discussion.
Co-Chair Foster explained the amendment was a technical
correction that would remove an improperly used fund
source. The Oil and Hazardous Fund could not be used to
fund trooper detachments; it was used to clean up oil
spills and hazardous waste spills. He detailed the fund
source had mistakenly been used by the Office of Management
and Budget and salary adjustments to spill prevention and
response in the Department of Public Safety.
Co-Chair Wilson WITHDREW her OBJECTION. There being NO
further OBJECTION, Amendment H DPS 1 was ADOPTED.
8:14:42 PM
Representative Merrick MOVED to ADOPT Amendment H DPS 2
(copy on file):
Alaska State Troopers
Alaska Bureau of Investigation
H DPS 2 - Reverse Full-Funding for Two New State
Trooper/Investigator Positions Added in FY19
Reverse additional funding to fully fund two new State
Trooper/Investigator positions added in FY19.
1004 Gen Fund (UGF) -125.3
Representative Josephson OBJECTED.
Representative Merrick reviewed the amendment that would
reverse full funding for two new state trooper/investigator
positions added in FY 19. She explained the two positions
had been created the previous year and had been funded at
75 percent in FY 19 because the department did not believe
it would be able to fill the positions by July 1. The [DPS]
subcommittee had added the balance of the funding for FY
20. The amendment would reverse the 25 percent increment.
She reported the subcommittee had been told DPS had
significant vacancies (approximately 40) and could absorb
the personnel costs with existing resources.
Representative LeBon objected to the amendment.
Representative Sullivan-Leonard asked if the two positions
had been filled. Alternatively, she wondered if the funding
was for potentially two positions.
Representative Merrick replied the positions were in the
process of being filled. They had been funded at 75 percent
[initially] because the department did not believe it would
need the full funding given it currently had 40 vacancies.
The department communicated it could absorb the extra 25
percent with the vacancies. She noted one position was
located in Fairbanks - the department was in the process of
filling the position and planned to have it filled by July
1. The second position, located in Bethel, was still
vacant.
Representative Sullivan-Leonard wanted to ensure they were
not reducing trooper positions when they were vitally
needed statewide.
Representative Josephson referenced Representative
Merrick's statement that there were 40 vacancies. He stated
the implication had been that money was sent to DPS to pay
for the 40 vacancies (notwithstanding their being filled).
He asked if that was the process.
Co-Chair Wilson replied that the positions were budgeted
for DPS. She furthered that hopefully the department would
give the money back if it was not spent, but it could also
spend it on something else. The money was readily available
to the department through the budget process.
8:17:38 PM
Vice-Chair Ortiz asked if it had been common in the past
several years for the department to return money associated
with the unfilled positions to the General Fund.
Co-Chair Wilson replied that the Alaska State Troopers had
returned $2 million in the last year because they had been
unable to fill the positions.
8:18:12 PM
AT EASE
8:20:20 PM
RECONVENED
Representative Josephson stated that a couple of things may
change the scenario. He mentioned HB 79 [peace
officer/firefighter retirement benefits legislation
introduced in 2019] and believed the bill would make the
[vacant] positions more attractive. He discussed that the
troopers had seen a well deserved increase in [salary]
steps or ranges. He hoped the jobs would become more
attractive and would bring in the talent needed to protect
the public.
Co-Chair Wilson clarified the 7.5 percent had been added in
October or November 2018 and there were still 40 open
positions. She speculated the increase had not resulted in
many new recruits. She understood HB 79 related to
retirement and noted it may or may not get to the
committee. She reasoned that in the worst case scenario, if
the 42 positions were all filled, there may be a small
supplemental to cover the 25 percent [to cover the two
positions]. She referenced the $2 million the department
had given back in the recent past and noted the 40
vacancies was a higher number than in the past. She
believed the division could cover the [two] positions and
utilize "people into the investigations versus just
troopers on the street." She wanted to see the 40 [vacant]
positions filled before adding more.
Representative Merrick reported it was her understanding
that in the past few years DPS had lapsed several million
dollars. However, she believed most recently the department
had used the extra money to buy capital.
Representative Knopp supported the amendment. He believed
the amendment aligned with a bigger plan Representative
Carpenter and others had talked about earlier when
discussing the Department of Law and the Department of
Corrections. He shared he had met with the deputy
commissioner of DPS earlier in the year and had talked
about the idea of utilizing park rangers in DPS because
they ran through the same academy and cost the same amount
to go through the academy. He had wondered whether the idea
was a better use of the resource. At the time he had been
made aware of the department's empty positions and
associated extra funding. He agreed that the department was
fine [in terms of funding]. He reported DPS had indicated
there were currently 60 new recruits in the academy and it
was hoping to fill the vacancies rather quickly.
8:24:03 PM
Representative LeBon reported that the subcommittee had
voted to establish the positions. He opposed the amendment.
Co-Chair Wilson MAINTAINED the OBJECTION.
Representative Merrick clarified that the amendment would
not remove the two positions. The amendment would remove 25
percent of the funding for each of the positions. She
elaborated that even if HB 79 passed, it was highly
unlikely the positions would be filled along with the 40
others. The amendment was a decrement of $125,000 (25
percent of the full funded trooper positions).
A roll call vote was taken on the motion.
IN FAVOR: Sullivan-Leonard, Tilton, Carpenter, Johnston,
Knopp, Merrick, Wilson
OPPOSED: Josephson, Ortiz, LeBon, Foster
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment H DPS 2 was ADOPTED.
8:25:58 PM
Representative Merrick MOVED to ADOPT Amendment H DPS 3
(copy on file):
Village Public Safety Officer Program
H DPS 3 - Align Village Public Safety Officer Funding
Reduce the Village Public Safety Officer (VPSO)
program funding to align with vacancy rate.
1004 Gen Fund (UGF) -2.143.0
Co-Chair Wilson OBJECTED for discussion.
Representative Merrick reviewed the amendment. She
indicated that the Village Public Safety Officer (VPSO)
program had historically lapsed funds, primarily due to
unfilled positions. She reported that at the end of
December 2018, 10 of the 55 (18 percent) of the authorized
positions were vacant. The amendment proposed to reduce the
VPSO grant by 18 percent, which would account for the
unspent money due to the vacancies. The total was less than
the $3 million decrement requested in the governor's
proposed budget.
Representative LeBon opposed the amendment.
Co-Chair Wilson referred to Amendments DPS 3 and DPS 4 and
noted that both would reduce VPSO program funding to align
with vacancy rates. She asked which amendment aligned with
the vacancy rate.
Representative Merrick answered that DPS 4 was a reduction
of 10 percent as opposed to 18 percent. She reiterated that
the program lapsed funds each year and the amendment
attempted to accurately reflect the funding necessary with
expenditures. She believed the matter was a truth in
budgeting issue. She emphasized the public was closely
watching the legislature's budget to see where it was
spending money. She stressed the importance of giving the
public an accurate picture of where the money was being
spent.
Co-Chair Foster did not support the amendment. He
highlighted that there were villages lacking any public
safety component or ability to ensure the safety of
residents. He explained that in the previous year the
legislature had passed intent language to allow excess
funding for recruitment and retention. He did not believe
that recruitment and retention efforts had been occurring.
He remarked the vacancies existed and yet there was money
intended to try to attract individuals into the jobs.
Co-Chair Wilson stated that improved language had been
included and there appeared to be a disconnect between the
DPS and the VPSO program. She elaborated they were supposed
to allow better housing and other things that did not
happen. She knew a substantial amount of money had been
given back; therefore, she understood where the amendment
was coming from. She noted the commissioner-designee was
looking at the program much differently than the previous
commissioner. She considered what needed to be done and
reasoned it was not only about hiring someone, but pointed
out housing was a necessary component. She shared that she
travelled to [undecipherable] in the past year and had
observed that the houses had little to no insulation and
had no facilities for holding detainees. She did not think
that was the way the state wanted to do business. She
remarked "there appears to be cuts here." She wondered
whether the new commissioner would view the program
differently and ensure that an officer would be safe. She
did not believe the state should make it the practice for a
VPSO to stay all night to watch a potentially dangerous
detainee until the next plane. She thought there was
disconnect that was currently being worked on.
Representative LeBon opposed the amendment. shared that the
DPS subcommittee had heard from VPSO grant recipients who
had been concerned the original budget cut of $3 million
was very harsh. He speculated that committee members could
probably all agree. He was inclined to give the program
another year to fill open positions and have the funding
available to do so.
Representative Josephson voiced strong opposition to the
amendment. He detailed that Alaska had roughly 230 villages
and approximately 230 troopers. He deduced that if one
trooper was placed in each village there would be no
troopers left in urban areas. He wanted to illustrate the
scope of the state. He shared that when he had lived in a
Yupik village for several years, he had only seen a trooper
once or twice. As a prosecutor in Kotzebue he had relied on
the VPSOs to provide assessments in the event of a death
(accidental or involving criminal activity) - VPSOs were
sometimes witnesses. He believed the real problem was that
VPSOs were not treated with the stature they should be
treated. He cited a trooper death benefits bill he had
sponsored two years ago and explained that VPSOs had not
been covered by the legislation. He explained VPSOs were
often short-changed. He wanted the problem solved and felt
the amendment prevented a solution.
8:32:21 PM
Vice-Chair Ortiz reported that the Tribal Affairs Committee
had heard about the VPSO issue from the DPS commissioner-
designee. He agreed with Co-Chair Wilson that the
commissioner-designee had spoken about a different vision
and had been clear of her intent to meet with the different
tribal groups to talk about their vision for the program.
He felt that eliminating the funds might prohibit
implementation of necessary changes to the program.
Co-Chair Wilson MAINTAINED her OBJECTION.
Representative Merrick provided wrap up on the amendment.
She related that she had met with DPS and talked about
recruitment and retention problems for the VPSO program,
she had asked why VPSOs were not part of the state
troopers. She had been told it was too expensive to pay the
benefits. She thought that it was up to the legislature to
decide whether village public safety was of that
importance. She personally believed it the answer was yes,
but she stressed the state could not continue to give money
for the program if it would not be spent. She stated there
was intent language the previous year for the department to
spend the money, but it had not been spent. She reasoned
that if all of the money was used, the department could
come back for a supplemental [budget request]. She thought
being a VPSO would be an incredibly difficult job. She
speculated that VPSOs likely were related to much of the
community they lived in and were responsible for being law
enforcement agents. She had been told the job of a VPSO was
to act as a first responder and not a law enforcement
agent. She respected the individuals doing the job and if
the department demonstrated that the funds were needed, she
would support a supplemental appropriation. She
characterized the issue as "truth in budgeting."
8:34:52 PM
A roll call vote was taken on the motion.
IN FAVOR: Tilton, Carpenter, Merrick, Sullivan-Leonard
OPPOSED: Josephson, Johnston, Knopp, LeBon, Ortiz, Wilson,
Foster
The MOTION to adopt Amendment H DPS 3 FAILED (4/7).
8:35:32 PM
Representative Merrick MOVED to ADOPT Amendment H DPS 4
(copy on file):
Village Public Safety Officer Program
H DPS 4 - Align Village Public Safety Officer Funding
Reduce the Village Public Safety Officer (VPSO)
program funding to align with vacancy rate
1004 Gen Fund (UGF) -1,190.0
Co-Chair Wilson OBJECTED for discussion.
Representative Merrick reviewed the amendment that would
reduce the VPSO funding by 10 percent versus 18 percent [as
in the previous offered amendment]. She indicated that the
amendment left a cushion of 8 percent for other grant
funding that may be used for things other than salaries.
She stated the decrement of $1.2 million would leave a
cushion if the department needed to fill any of the
vacancies. She highlighted that supplemental funding could
be requested by the department if positions were filled.
Representative LeBon opposed the amendment due to lengthy
discussion held in subcommittee. He relayed that DPS and
VPSOs had testified to the subcommittee and subcommittee
members had felt strongly about protecting the program. He
reported that at the end of the subcommittee process,
unfortunately for the Alaska State Troopers, their budget
had been reduced; however, the subcommittee had not reduced
the VPSO budget.
Co-Chair Foster opposed the amendment. He voiced that he
could not imagine what living in Juneau would be like
without law enforcement. He pointed out there was law
enforcement present in the Capitol Building. He could not
imagine what it was like to live in a village without law
enforcement.
Co-Chair Wilson MAINTAINED her OBJECTION.
Representative Merrick provided wrap up on the amendment.
She commended the hard work of VPSOs. She noted that the
subcommittee added the intent language to fully utilize the
funds. She hoped the department would expend all of the
funds on needs such as housing and/or a rate increase to
fill the positions. She observed that village public safety
was obviously important to everyone on the committee.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Merrick, Tilton
OPPOSED: Josephson, Johnston, Knopp, LeBon, Ortiz,
Sullivan-Leonard, Wilson, Foster
The MOTION to adopt Amendment H DPS 4 FAILED (3/8).
8:39:49 PM
AT EASE
8:58:00 PM
RECONVENED
Vice-Chair Ortiz MOVED to RESCIND action on Amendments H
DEC 6 and 7 [see pages 28 through 32 for amendment
details].
Representative Carpenter OBJECTED.
Vice-Chair Ortiz spoke to his proposal. He reminded the
committee the funds [for the Shellfish Biotoxin and Growing
Water Testing Program] came from the Commercial Passenger
Vessel Environmental Compliance Fund for the past ten
years. He believed rescinding the committee's previous
action would be positive for the development of the state's
mariculture industry, which had significant promise.
Representative Carpenter MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Johnston, Knopp, LeBon, Wilson, Foster
OPPOSED: Merrick, Sullivan-Leonard, Tilton, Carpenter
The MOTION to RESCIND action on Amendments H DEC 6 and 7
PASSED (7/4). [Note: Representative Merrick made a motion
to adopt the amendments at 9:02 p.m. The motion failed on a
vote of (4/7). See pages 142 and 143 for detail.]
Co-Chair Foster clarified that the money would remain in
the budget.
9:00:16 PM
Representative LeBon MOVED to ADOPT Amendments H DPS 5 and
6 (copy on file):
Fire and Life Safety Fire and Life Safety
H DPS 5
GA 3/27 Inc/Dec Pair: Transfer from Administrative
Services to Align Budget Authority with Operational
Needs
This transfer of $90.0 UGF from Administrative
Services is to align budget authority with operational
needs. The department recognizes the need to address
significant building plan review backlogs, especially
during the months leading up to the summer
construction season. The department will expand the
use of third-party contractors to alleviate the
backlog and reduce turnaround times. The department
anticipates that this need can be met with current
resources. A related supplemental amendment has been
requested to address immediate needs for FY2019.
1004 Gen Fund (UGF) 90.0
Statewide Support
Administrative Services
H DPS 6
GA 3/27: Inc/Dec Pair: Transfer to Fire and Life
Safety to Align Budget Authority with Operational
Needs
This transfer of $90.0 UGF to Fire & Life Safety is to
align budget authority with operational needs. The
department recognizes the need to address significant
building plan review backlogs, especially during the
months leading up to the summer construction season.
The department will expand the use of third-party
contractors to alleviate the backlog and reduce
turnaround times. The department anticipates that this
need can be met with current resources. A related
supplemental amendment has been requested to address
immediate needs for FY2019.
1004 Gen Fund (UGF) -90.0
Co-Chair Wilson OBJECTED for discussion.
Representative LeBon reviewed the amendments that was a
transfer from Administrative Services to align budget
authority with operational needs. The amendments would
transfer $90,000 UGF from Administrative Services to align
with budgetary needs connected to Fire and Life Safety
(fire marshal review of plans). He explained there was a
backlog of 17 weeks for plan reviews; the intent was to cut
the time in half. The governor's office had submitted the
change to the DPS subcommittee after it had closed out its
budget. He elaborated that the Building Plan Review Office,
which performed the critical functions for approval of
plans for construction projects needed a quicker
turnaround. The hope was to be responsive to plan review
for construction projects to allow projects to get moving
quickly and to get people working.
9:02:20 PM
Co-Chair Wilson stated her understanding of the amendments.
She believed Administrative Services had $90,000 it did not
need and Fire and Life Safety wanted the funds. She
surmised the amendments resulted in a net zero.
Representative LeBon agreed.
Co-Chair Wilson WITHDREW her OBJECTION. There being NO
further OBJECTION, Amendments H DPS 5 and 6 were ADOPTED.
9:02:55 PM
Representative Merrick MOVED to ADOPT Amendments H DEC 6
and 7. [Note: Amendments H DEC 6 and 7 were adopted at
11:49 a.m. (see page 32). Action on the amendments was
subsequently rescinded at 8:58 p.m. (see page 140).]
Co-Chair Wilson OBJECTED and MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter
OPPOSED: Johnston, Knopp, Ortiz, Josephson, LeBon, Wilson,
Foster
The MOTION to adopt Amendments H DEC 6 and 7 FAILED (4/7).
9:05:20 PM
Co-Chair Wilson MOVED to ADOPT Amendment H DOR 1 (copy on
file):
Taxation and Treasury Tax Division
H DOR 1 - Delete 2 gaming positions
Delete gaming positions (08-2059 and 08-2064)
1061 CIP Rcpts (Other) -212.2
Representative Sullivan-Leonard OBJECTED.
Co-Chair Wilson reported the amendment would delete two
gaming positions that were no longer needed.
Representative Sullivan-Leonard asked if there would still
be oversight for charitable gaming funding and for
organizations governed under the positions.
9:06:16 PM
AT EASE
9:07:08 PM
RECONVENED
Co-Chair Wilson WITHDREW Amendment H DOR 1 because she had
not realized a separate bill (HB 73) would deal with the
two positions if passed.
9:07:43 PM
Representative Tilton MOVED to ADOPT Amendment DOR 2 (copy
on file):
Alaska Mental Health Trust Authority Mental Health
Trust Operations
H DOR 2 - 50% reduction in executive travel
Restore FY20GOVAmend reduction to executive travel.
1094 MHT Admin (Other) -40.0
Representative Josephson OBJECTED.
Representative Tilton reviewed the amendment that was part
of the 50 percent travel reductions to the agencies. She
stated that the reductions were made to discretionary
travel and did not impair the mission or primary function
of the agency.
Representative Josephson asked if it was customary for the
legislature intervene in the Alaska Mental Health Trust
Authority (AMHTA) budget.
Co-Chair Wilson believed the state was in different times.
She noted they had heard the same thing about the
governor's and legislature's budgets, and she had changed
both. She thought the current situation fell outside what
tradition had been. She believed the committee should
consider each amendment at face value and determine whether
the decrements would negatively impact an agency.
Vice-Chair Ortiz stated that because he came from a region
where AMHTA had significant involvement through its timber
program, he knew it was not customary for the legislature
make changes to the mental health budget. He reported that
the budget AMHTA submitted to the legislature was generally
approved.
9:09:49 PM
Representative Knopp reported the budget subcommittee had
been uncomfortable with travel restrictions because of
AMHTA's need to manage its land. He elaborated that when
AMHTA made its timber sales and harvest, it required
significant travel.
Representative Josephson MAINTAINED his OBJECTION.
Representative Tilton provided wrap up. The amendment was a
50 percent travel reduction that had been made throughout
all agencies. She stated that current times were different,
and she believed it was necessary to look at all funds
being spent. She noted the reductions were to discretionary
travel and would not impair the primary functions of the
agency.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter,
Wilson
OPPOSED: Knopp, LeBon, Ortiz, Johnston, Josephson, Foster
The MOTION to adopt Amendment H DOR 2 FAILED (5/6).
9:12:59 PM
Representative Tilton MOVED to ADOPT Amendment H DOR 3
(copy on file):
Long Term Care Ombudsman Office
H DOR 3 - 50% reduction to executive travel
Restores FY20GOVAmend executive travel reduction.
1007 I/A Repts (Other) -12.5
1037 GF/MH(UGF) -4.2
Co-Chair Wilson OBJECTED for discussion.
Representative Tilton reviewed the amendment. The amendment
would reduce 50 percent of the travel. She reported the
reduction was to discretionary travel and would not impair
the core mission or primary function of the agency.
Co-Chair Wilson WITHDREW her OBJECTION.
Representative Josephson OBJECTED. He felt more strongly
about the current amendment than the previous amendment. He
highlighted that the long-term care ombudsman needed to
travel to see how seniors or individuals in long-term care
were being treated. He opposed the reduction.
Representative Josephson MAINTAINED his OBJECTION.
9:14:02 PM
AT EASE
9:14:22 PM
RECONVENED
Representative Tilton provided wrap up on the amendment.
She agreed that the long-term care ombudsman needed to have
some money to travel; however, the reduction was to
discretionary travel and would not impair the agency's
mission.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter,
Wilson
OPPOSED: Ortiz, Josephson, Johnston, Knopp, LeBon, Foster
The MOTION to adopt Amendment H DOR 3 FAILED (5/6).
9:15:46 PM
Representative LeBon MOVED to ADOPT Amendment DOR 4 (copy
on file):
Alaska Permanent Fund Corporation APFC Investment
Management Fees
H DOR 4 - Information to be Included in APFC Annual
Report
Wordage:
It is the intent of the legislature that all fees
associated with the income producing investments of
the Fund be incorporated in the APFC Annual Report:
Fees funded by investments, fees funded by
appropriation and corporate expenses.
Explanation:
APFC currently produces a Quarterly Investment
Management Fee report that discloses the fees
associated with the income producing investments of
the Fund. Adding this information to the APFC Annual
Report will provide an additional layer of
transparency associated with the investment management
fees.
Co-Chair Wilson OBJECTED for discussion.
Representative LeBon reviewed the amendment that included
intent language to increase the Alaska Permanent Fund
Corporation (APFC) management fee cost authority. The
amendment would allow APFC to place investments and pay the
fees related to those investments. He explained that if the
investments were not placed, no fee would be due.
Representative Knopp was not comfortable enough to support
the amendment. He thought the APFC director had advocated
for some time to pay the external fund managers more money;
however, the state was already paying out over a half
billion dollars per year in external management fees. He
could not support the amendment at present.
9:16:58 PM
AT EASE
9:26:10 PM
RECONVENED
Representative LeBon clarified the amendment description.
He explained the amendment was information from the APFC
annual report whereby the corporation would disclose the
fees imbedded in investments on its annual reporting. He
elucidated the amendment had no fiscal impact. The
corporation currently produced a quarterly investment
management fee report that disclosed the fees associated
with the income producing investments of the fund. Adding
the information to the APFC annual report would provide an
additional layer of transparency associated with the
investment management fees. The amendment would result in
additional information.
Co-Chair Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment H DOR 4 was
ADOPTED.
9:27:42 PM
Representative LeBon MOVED to ADOPT Amendment H DOR 5 (copy
on file):
Alaska Permanent Fund Corporation
H DOR 5 - Increase Alaska Permanent Fund
Corporation Management Fee Costs
APFC's Board of Trustees authorized an increment to
the investment management fee allocation that reflects
growing assets under management and the increased cost
of the tools needed to manage them effectively. The
proposed increase in the investment management
allocation for the APFC's FY20 budget totals $5.3
million and is not reflected in the current CS.
1105 PF Gross (Other) 5.296.3
Representative LeBon reviewed the amendment. He explained
the amendment would set aside a pool of money to help cover
the investment cost for future investments. The money would
only be utilized if the investments were placed.
Co-Chair Wilson OBJECTED for discussion.
Representative Josephson asked for the back story on the
amendment.
Representative LeBon replied APFC invested money
continuously; the investments came at a cost. He explained
that APFC required a pool of money to pay the fees
associated with the investments - if the investment was
placed and a fee was due, APFC required a source of funds
to pay the fee.
9:29:11 PM
AT EASE
9:35:13 PM
RECONVENED
Co-Chair Wilson was uneasy about the amendment. She shared
that she was not an investment banker, but it was her
understanding that APFC already had $150 million of fee
authority and the amendment would add an additional $5.2
million. She believed the amendment only pertained to fees
and did not include salaries. She was unsure what exactly
the amendment did; therefore, she was in opposition until
she learned more information.
Representative LeBon answered that the APFC board of
trustees had requested the additional increment in its
investment management fee allocation in anticipation that
additional investments may push the portfolio value up and
result in associated fees.
Representative Knopp stated the amendment was ambiguous to
him as well. He thought APFC currently had $180 million in
fee authority. He remarked that the legislature's finance
department had [indecipherable] with APFC. He was uneasy
about the amendment and opposed it.
Representative Sullivan-Leonard asked for clarification on
the fund source. She looked at the funding source for the
$5,296,000 from APFC receipts. She remarked the funds were
not UGF.
Representative LeBon deferred the question to Vice-Chair
Johnston.
Vice-Chair Johnston replied that the fund source was
corporation funds used to pay fees. She clarified that APFC
was asking for an additional $5 million in anticipation it
may exceed its $150 million authorization. She explained
that if APFC exceeded its current authorization, a
supplemental fund request would be required in the future.
The amendment would increase the corporation's fee schedule
for investments. She furthered that the market was doing
quite well and many of the fees were based on a percentage
of an investment - fees could increase incrementally in a
good market.
9:38:44 PM
Representative Josephson asked if APFC had asked the
amendment sponsor, as chair of the subcommittee, to
introduce the amendment. Alternatively, he wondered if the
sponsor had introduced the amendment on his own accord.
Representative LeBon replied the issue came to him at the
eleventh hour before the amendment deadline. He reported
that the APFC executive director had presented him with the
request and had asked for the committee's consideration on
the increased [management fee authorization] ceiling. He
did not believe the ask was big in the banking world; APFC
was asking for the capacity to pay the fees if the
investments came to be. He explained that if the
investments did not come to be, the money would not be
spent. He explained that the increase was not a risk for
the legislature, it gave APFC more flexibility - currently
if APFC bumped against the ceiling it would have to come
back to the legislature for a supplemental. He deferred to
the judgement of the APFC executive director. He added the
request was not out of the ordinary.
Vice-Chair Ortiz thought hitting the [management fee
authorization] ceiling would be a good thing because it was
an indication of good returns and increased investments.
Representative LeBon agreed. He explained that if the
legislature did not hear from APFC, perhaps the corporation
needed some of the money and perhaps it did not. He
reported the executive director anticipated the need for
the additional capacity to pay an investment fee after
placing an investment.
9:41:10 PM
Vice-Chair Johnston recalled being asked about opportunity
loss when the committee had been considering other
amendments. She reported that the issue under discussion
was a situation where there could be opportunity loss.
Representative Knopp remarked he thought it was interesting
the amendment had come at the eleventh hour. He thought the
issue was probably not new and it had not been heard by any
committees. He found those things problematic.
Co-Chair Wilson asked if the fees were all listed in the
APFC [quarterly investment management fee] report.
Representative LeBon could not say for certain, but the
fees were charged to APFC by investment houses placing
investments on its behalf. He elaborated that in some cases
the fees were negotiated like a bank loan. He explained the
fee could be negotiated with the borrower and there was
[not always] a set fee. He considered what the fee was on
investments made by APFC that could be in the billions of
dollars. The dollar amount included in the amendment was
not big in APFC's world. He discussed a $200 million
ceiling and pointed out it could be argued "you're just
talking capacity" to pay a fee related to an approved
investment. He stated that if the fee was not paid, a
transaction would not be placed, and the money would sit in
the bank.
Co-Chair Wilson explained that she had seen the fees
online, but she did not know "the fees compared to what."
She stated that a $20 million [fee] may seem like a lot,
but it was not a lot if it was on $200 million. However, if
an investment was $40 million, a $20 million fee was
substantial. She remarked on not being able to see the
transparency of the fees and how they were negotiated. She
had been concerned when she had received a visit that "it
seemed like a lot of those were paid first, we got what was
left over, which was not necessarily a bad thing." She was
concerned about not getting the whole picture of how much
money there was invested and what the attached fees were.
9:44:00 PM
Representative LeBon shared that DOR 4 had addressed
transparency in fees. He explained that some investments
would remove the fee from the investment returns and send
the net. He detailed that in those cases the fee was not
discernable. He furthered that the prior amendment included
instruction to APFC to disclose the fees. The current
amendment identified the fee upfront and the pool of money
to pay the fees if the investment was placed.
Co-Chair Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Sullivan-Leonard, Tilton, Johnston, LeBon,
Foster
OPPOSED: Merrick, Carpenter, Knopp, Josephson, Wilson
The MOTION PASSED (6/5). There being NO further OBJECTION,
Amendment H DOR 5 was ADOPTED.
9:46:02 PM
AT EASE
9:52:56 PM
RECONVENED
Co-Chair Foster reported the committee would move to
Department of Transportation and Public Facilities (DOT)
amendments.
Co-Chair Wilson requested to bundle Amendments H DOT 1 and
2 [motion was cut short due to a request from another
member for an at ease].
9:53:33 PM
AT EASE
9:53:59 PM
RECONVENED
Co-Chair Foster requested that members allow other members
to complete their motions.
Co-Chair Wilson asked permission to bundle Amendments H DOT
1, 2, 3, 4, and 6. There being NO OBJECTION, it was so
ordered.
Co-Chair Wilson MOVED to ADOPT Amendments H DOT 1, 2, 3, 4,
and 6 (copy on file).
Highways, Aviation and Facilities Central Region
Facilities
H DOT 1 - 5% UGF reduction
Represents a 5% UGF reduction from the FY20 Adjusted
Base
1004 Gen Fund (UGF) -352.8
Northern Region Facilities
H DOT 2 - 5% UGF reduction
Represents a 5% UGF reduction from the FY20 Adjusted
Base
1004 Gen Fund (UGF) -526.8
Central Region Highways and Aviation
H DOT 3 - 5% UGF Reduction
Represents a 5% UGF reduction from the FY20 Adjusted
Base
1004 Gen Fund (UGF) -923.5
Northern Region Highways and Aviation
H DOT 4 - 5% UGF Reduction
Represents a 5% UGF reduction from the FY20 Adjusted
Base
1004 Gen Fund (UGF) -1,636.2
H DOT 6 - Marine Highway reduction
Reduced funding requiring the department to find
efficiencies in operations.
1004 Gen Fund (UGF) -10,000.0
Representative Sullivan-Leonard OBJECTED.
Co-Chair Wilson reviewed the amendments. She stated that
many thought the state had two different highway systems,
but she noted they merged together. She explained that
Amendments H DOT 1, 2, 3, and 4 included a 5 percent
reduction in central and northern regions for a total of
$3,439,300 and a Alaska Marine Highway System (AMHS)
reduction of $10 million.
Representative Sullivan-Leonard MOVED to SPLIT the
QUESTION. She requested to consider Amendments H DOT 1, 2,
3, and 4 separately from Amendment H DOT 5 [Amendment H DOT
6].
Co-Chair Wilson OBJECTED. She restated the request by
Representative Sullivan-Leonard.
Co-Chair Foster asked if the statement was correct.
Representative Sullivan-Leonard agreed. She believed there
were two separate pieces [included in the amendments].
Co-Chair Foster clarified the motion to take up Amendment H
DOT 6 separately from the other amendments.
Co-Chair Wilson elucidated the motion was to separate the
initial amendment into two parts. She spoke to her
objection. She explained she had bundled the amendments
because the pain was statewide. She did not want to pit
highways against AMHS. She elaborated that people all
traveled different ways and utilized different types of
transportation. She did not want to pass one of the
amendments without the others. She wanted to ensure all of
the named areas took a reduction.
9:57:42 PM
Representative LeBon supported Co-Chair Wilson's argument
to keep the amendments together as a bundle. He stated the
amendments all pertained to one issue and should remain
together.
Representative Sullivan-Leonard asked if the 5 percent
reduction for the regions [identified in Amendments H DOT
1, 2, 3, and 4] also applied to the AMHS reduction.
Co-Chair Wilson clarified the proposed reduction to AMHS
was more than 5 percent because there were also DGF funds
available for AMHS to utilize. There were no DGF funds for
the highways and aviation system.
Representative Sullivan-Leonard believed the issue was
separate.
Co-Chair Wilson MAINTAINED her OBJECTION.
Co-Chair Foster clarified the question.
A roll call vote was taken on the motion.
IN FAVOR: Sullivan-Leonard, Tilton, Carpenter, Merrick
OPPOSED: Josephson, Johnston, Knopp, LeBon, Ortiz, Wilson,
Foster
The MOTION to separate Amendment H DOT 6 from Amendments H
DOT 1, 2, 3, and 4 FAILED (4/7).
10:00:26 PM
Representative Josephson opposed the amendments. He
reported that he had yet to sit on the House Transportation
Committee or the DOT subcommittee; however, he was aware of
the budget situation and aware that highways and aviation
and AMHS had sustained serious cuts. He did not know the
purpose of the cuts.
Vice-Chair Ortiz stated that his district would be hit
twice if the amendments were adopted because it utilized
the highways and AMHS. He reported AMHS was down $25
million in GF since 2015. He underscored that AMHS was the
highway system for Southeast. The system had been started
and boats had been built before the state had oil money. He
highlighted that it had been a priority at the time, and he
did not know how it was any less of a priority at present.
The state had more people and more dependency on the system
than it had when AMHS had started. He remarked that it was
unfortunate that part of the state was made up of islands,
but "it is what it is."
Representative Knopp believed the amendments were not about
the AMHS or the highway system, but they were about the
need for strategic budget reductions due to the state's
fiscal situation. He believed the amendments reflected an
appropriate method for departments to share in the burden.
He supported the amendments but did not like them.
10:03:38 PM
AT EASE
10:05:19 PM
RECONVENED
Vice-Chair Ortiz MAINTAINED his OBJECTION.
Co-Chair Wilson provided wrap up. She clarified the
amendments were not a shot at highways and aviation or
AMHS. She explained the amendments were about reducing
costs. She had bundled the amendments together because she
did not believe it was appropriate to make reductions to
only one entity.
A roll call vote was taken on the motion.
IN FAVOR: Tilton, Carpenter, Johnston, Knopp, LeBon,
Merrick, Sullivan-Leonard, Wilson, Foster
OPPOSED: Josephson, Ortiz
The MOTION PASSED (9/2). There being NO further OBJECTION,
Amendments H DOT 1, 2, 3, 4, and 6 were ADOPTED.
10:06:45 PM
Co-Chair Wilson WITHDREW Amendment H DOT 5 (copy on file).
Representative Sullivan-Leonard MOVED to ADOPT Amendment H
DOT 7 (copy on file):
H DOT 7 - Maximize Fare Box Recovery and Provide
Service to All Alaska Ports
This amendment would allow AMHS to operate their
current published schedule from July-August of 2019.
In September 2019 it would provide some service to all
ports and from October 2019 to June 2020 it would
provide some service to all ports except Prince
Rupert. Service weeks would total 281.8 and the Fare
Box Recovery rate would be 45%.
1004 Gen Fund (UGF) -36,042.8
1076 Marine Hwy (DGF) -4,719.4
Co-Chair Wilson OBJECTED for discussion.
Representative Sullivan-Leonard reviewed the amendment. She
stated the amendment would not decimate the AMHS. The
amendment would make some modifications so that AMHS could
move forward in a way that best met the needs of users. The
amendment reflected "scenario 2" that had been presented by
the department to the DOT subcommittee. She elaborated the
department had provided detailed information about how AMHS
worked, who the users were, and incoming fare revenue. The
amendment would eliminate service for Prince Rupert from
October [2019] to June [2020]. She explained that all other
schedules would be maintained.
Representative Sullivan-Leonard reported there had been an
extensive look at AMHS and she had talked with DOT. She
reported that Representative Harriet Drummond had asked for
a comparison with regard to the highway system through
Southcentral and AMHS to see how each area was being
supplemented. She reported the comparison was striking and
the supplement received by AMHS was greater than $93
million. She believed it was an incredible amount of money
in relation to fees generated through AMHS. She thought the
state could not continue to supplement a system that needed
to be reviewed and revamped. She hoped the end result was a
system that worked for many. She shared that Mat-Su had a
ferry in the past, but the numbers did not pan out for
getting people between Anchorage and Mat-Su. She asked for
a $36 million GF reduction and a $4.7 million reduction in
the AMHS Fund. The amendment would leave a total of $55
million in the account.
Co-Chair Foster pointed out that Amendment H DOT 6 had
passed, which was a $10 million reduction to AMHS. He
highlighted that if the current amendment was adopted, the
reduction would total $51 million.
Vice-Chair Ortiz strongly opposed the amendment. He
stressed that Prince Rupert was one of the main ports that
fed to Ketchikan. He appreciated the thought of attempting
to save the state money, but to discontinue service from
Prince Rupert would have a major impact on the state's
economy.
10:11:51 PM
Representative Sullivan-Leonard clarified the amendment
would reduce funds, not eliminate service to Prince Rupert.
Representative LeBon believed the cut was much too large.
He supported the Prince Rupert port.
Representative Josephson voiced strong opposition to the
amendment. He shared that he had lived all across Alaska
including Western and Northern Alaska, Fairbanks, Kenai,
Anchorage, and Juneau. He noted that although he had been
born and raised in Anchorage, he agreed on the issue
completely with his colleague from Southeast Alaska. He
stressed that Southeast was one of the greatest parts of
the state, which was the reason cruise ships traveled to
the region. He was shocked that the administration was
interested in having as part of its legacy something that
was iconic for the state.
Representative Carpenter believed the committee was being
presented with a false and disingenuous choice. He
clarified that no one was talking about ending the ferry
system, but they were talking about doing something
"smarter, different than we've ever done before" that would
not require the state to lose money or at a minimum would
lose less. He opined that continuing the status quo meant
the state would continue to lose money. He stressed that
fiscal responsibility demanded that the state find a better
way. He reiterated that the amendment would not eliminate
ferry service.
10:14:25 PM
Representative Tilton believed that Representative
Sullivan-Leonard had seen several options and had selected
the best option for the [ferry] system overall.
Vice-Chair Ortiz clarified that the governor's proposal
would end the AMHS at the end of September.
Representative Merrick was torn on the issue - she had
grown up in Southeast riding the ferry but was also worried
about the state's budget crisis. She asked the amendment
sponsor if she would consider a 50 percent reduction to the
proposed $40 million cut. She could not support a total cut
of $50 million.
Representative Sullivan-Leonard stated it was up to
Representative Merrick.
10:16:09 PM
AT EASE
10:20:46 PM
RECONVENED
Representative Merrick MOVED to ADOPT Amendment 1 to
Amendment H DOT 7. The amendment would reduce the $40
million to $18,021,400 GF and $2,359,700 from the AMHS.
Co-Chair Foster clarified the amendment was Amendment 1 to
Amendment H DOT 7.
Representative Merrick agreed.
There being NO OBJECTION, Amendment 1 to Amendment H DOT 7
was ADOPTED.
10:22:06 PM
Co-Chair Wilson MAINTAINED her OBJECTION to Amendment H DOT
7 as AMENDED.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Merrick, Sullivan-Leonard, Tilton
OPPOSED: Josephson, Johnston, Knopp, LeBon, Ortiz, Wilson,
Foster
The MOTION to adopt Amendment DOT 7 as amended FAILED
(4/7).
10:23:08 PM
Representative Sullivan-Leonard WITHDREW Amendment H DOT 8
(copy on file).
Representative Merrick MOVED to ADOPT Amendment H DOT 9
(copy on file):
Marine Highway System
Marine Vessel Operations
H DOT 9 - Divest Alaska Marine Highway System of
Vessels
It is the intent of the legislature that the Alaska
Marine Highway System divest of at least two vessels.
Explanation:
Due to increased fleet size in recent years, operating
costs of the Alaska Marine Highway System have
increased significantly. Divesting of at least two
vessels will reduce operating costs.
Co-Chair Wilson OBJECTED for discussion [Representative
Josephson also OBJECTED].
Representative Merrick reviewed the amendment with a
prepared statement:
This amendment adds intent language to encourage the
department to divest the Marine Highway System of at
least two vessels. The fleet size has grown from 9 to
12 since 2004, which has contributed to the increased
operating costs we've seen over the last decade. The
department indicated that back when they added 2
vessels in 2004 and 2005, they intended to offset the
increase by getting rid of 2 vessels, but that didn't
happen as planned. This year 2 new vessels will be
joining the fleet, further increasing the number. I
think its time for the Alaska Marine Highway System to
look at reducing the number of vessels operating in
effort to contain costs.
Vice-Chair Ortiz did not see the purpose for the language
recommendation. He elaborated that AMHS had a plan that
included waiting to see would happen once a consultant was
hired [by the administration]. He thought adopting the
language would give direction to the department that was
not needed.
Representative Knopp asked the amendment sponsor to repeat
the vessel information she had provided. He asked if the
number of vessels had increased from 9 to 12.
Representative Merrick confirmed that over the last decade
the number of vessels had increased from 9 to 12. She
elaborated that 2 vessels had been added in 2004 and 2005.
The AMHS had planned on getting rid of 2 vessels, but that
did not happen. In the current year, 2 new Alaska Class
ferries the Tazlina and Hubbard were coming on board, which
would increase the fleet by 2.
10:25:23 PM
AT EASE
10:25:35 PM
RECONVENED
Representative Knopp shared that he was looking at a
component vessel operations management sheet from 2006
showing AMHS operated 10 ships. He noted the same sheet for
2019 reported AMHS oversaw the operation of 10 vessels. He
had received a note that the Taku had been sold and AMHS
was in the process of selling the Chenega and Fairweather.
He wondered how many ships AMHS truly had.
Representative Merrick answered she believed the numbers
she was citing were from the department, but she would
confirm that information.
10:26:43 PM
AT EASE
10:29:10 PM
RECONVENED
Representative Merrick replied that in 2004 the AMHS had 9
ferries and added the Fairweather; in 2005 the Chenega had
been added, which brought the fleet to 11. The Taku had
been sold and the Tazlina and Hubbard had been added, which
brought the total vessel number to 12.
Representative Knopp replied that he had been going off of
the vessel report provided by the department that showed 10
vessels. He did not support any reductions or changes to
AMHS due to the unresolved nature of the situation. He
noted the administration and legislature needed to figure
the system out.
Co-Chair Wilson MAINTAINED her OBJECTION.
Representative Merrick pointed out that the amendment was
intent language, which was a suggestion to the department.
She elaborated that the department had planned to divest 2
of its current vessels when the Chenega and Fairweather
came online, but that had not occurred. The amendment would
encourage the department to divest two vessels in order to
contain costs and provide better service.
A roll call vote was taken on the motion.
IN FAVOR: Merrick, Sullivan-Leonard, Tilton, Carpenter
OPPOSED: Johnston, Knopp, LeBon, Ortiz, Josephson, Wilson,
Foster
The MOTION to adopt Amendment H DOT 9 FAILED (4/7).
10:32:01 PM
Representative Josephson WITHDREW Amendment H UOA 1 (copy
on file).
Representative Knopp MOVED to ADOPT Amendment H UOA 2 (copy
on file):
University of Alaska
Budget Reductions/Additions - Systemwide
H UOA 2 - Reduce University UGF funding to match FY18
Actuals Funding Level
This amendment would reduce University of Alaska
Unrestricted General Fund appropriation to match FY18
actuals funding levels. This would reduce the
University's FY20 UGF amount to $316,991.4.
1004 Gen Fund (UGF) -20,042.1
Representative Josephson OBJECTED for discussion. He wanted
to offer an amendment to Amendment H UOA 2 [Co-Chair Wilson
OBJECTED].
Representative Knopp reviewed Amendment H UOA 2. The
amendment would reduce University of Alaska funding to FY
18 actuals - a proposed reduction of $20 million. He
explained the reduction would be to a $10 million increment
added during the subcommittee and a $10 million reduction
from the FY 19 management plan.
Representative Josephson MOVED to ADOPT Amendment 1 to
Amendment H UOA 2.
Co-Chair Wilson OBJECTED.
Representative Josephson explained conceptual Amendment 1
would increase the grant from $316,991,400 to $326,991,400.
He pointed out that the University had highlighted it had
suffered cumulative cuts totaling just under $200 million
in the past four fiscal years. He elaborated that in FY 14
or FY 15 the University received $371 million, but in
subsequent years the grant had been $200 million lower in
aggregate. He detailed that the Board of Regents had
requested a $31 million increase over the current FY 19
budget. The subcommittee had rejected the request by 66
percent and only provided a $10 million increase.
Representative Josephson furthered that Amendment 1 would
not give the $10 million increase and would flat fund the
University budget. The University would also have new
requirements including Title IV enhancements of close to $2
million, facilities maintenance costs of close to $10
million, and utility cost increases of $1.3 million. He
explained the aforementioned costs were only in one budget
component and did not include other investments they would
like to make. He underscored that the University raised
about two-thirds of its total budget of approximately $900
million. The University raised funds through tuition, fees,
grants, research endowment money, federal money, and other.
He stressed the University was a major engine in Alaska.
10:36:19 PM
Representative Knopp asked for a repeat of the number. He
asked if the amendment to Amendment H UOA 2 included an
increase of $20 million.
Representative Josephson replied it would be an increase of
$10 million over Amendment H UOA 2, which would bring the
total to $326,991,400.
Vice-Chair Ortiz supported the amendment to the amendment.
He noted it had been said by several members of the
committee the previous year that it was not possible to cut
to prosperity. He detailed that during his last several
years of teaching the University had been in its better
years of support. He reported that as the University grew
it had seen more and more students staying within Alaska
taking advantage of the scholarship programs and other
available options. He highlighted that more people were
staying in-state for education and were spending their
education money in the state, which led to more people
remaining in Alaska. He recognized that education took
money, but it was a worthwhile investment.
10:38:04 PM
Representative LeBon supported the amendment to the
amendment. He shared that he and the University went way
back, and it was the reason he was where he was currently.
He was appreciative of what the University had done for him
and his family.
Representative Knopp opposed the amendment to the
amendment. He discussed that for two months the legislature
had been talking about how to share the burden of the cost
reductions. He emphasized that Amendment H UOA 2 was not a
cut from FY 19; the amendment was a status quo budget. He
believed the University would be happy with the proposal
compared to what the governor had offered.
Representative Carpenter did not support the amendment. He
noted that he had attended college out of state. He
discussed there were many students and alumni who
appreciated their experiences. He did not believe the
current fiscal situation should reflect on that. He thought
the University had a problem with its finances because it
was bloated, administration top heavy, and its decisions in
recent years had made it less competitive in the
marketplace. He stated that the legislature was going to
take an unprecedented amount of the peoples' PFD to
continue spending the way it had been.
10:40:03 PM
Co-Chair Wilson MAINTAINED her OBJECTION to Amendment 1 to
Amendment H UOA 2.
A roll call vote was taken on the motion.
IN FAVOR: LeBon, Ortiz, Josephson
OPPOSED: Knopp, Merrick, Sullivan-Leonard, Tilton,
Carpenter, Johnston, Wilson, Foster
The MOTION to adopt Amendment 1 to Amendment H UOA 2 FAILED
(3/8).
Representative Knopp provided wrap up on Amendment H UOA 2.
He recognized that the amendment likely cut too much for
some and not enough for others. He believed overall the
committee had done a good job for all of the departments
throughout the budget process. He asked for members'
support.
Co-Chair Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: LeBon, Merrick, Sullivan-Leonard, Tilton,
Carpenter, Johnston, Knopp, Wilson, Foster
OPPOSED: Josephson, Ortiz
The MOTION PASSED (9/2). There being NO further OBJECTION,
Amendment H UOA 2 was ADOPTED.
10:42:15 PM
Representative Sullivan-Leonard WITHDREW Amendment H UOA 3
(copy on file).
Representative Sullivan-Leonard MOVED to ADOPT Amendment H
UOA 4 (copy on file):
University of Alaska
Budget Reductions/Additions - Systemwide
H UOA 4 - University of Alaska Reduction
This is an alternative to Governor Dunleavy's proposed
FY20 UGF reduction to the University budget. This
$56,301.7 amendment includes a reduction of $46,301.7
(30% of the Governor's reduction) and removes the $10
million dollar increment added by the House Finance
Subcommittee. This is a compromise from the original
$154,339.1 decrement offered in the FY20 Governor's
amended budget.
1004 Gen Fund (UGF) -56,301.7
Co-Chair Wilson OBJECTED.
Representative Sullivan-Leonard reviewed the amendment. She
relayed the topic had been discussed by the budget
subcommittee. She reported she had brought the amendment
forward at the request of the representative from Homer.
She elaborated that the subcommittee discussions had been
that some legislators felt the governor's proposed
reductions were too much. The amendment was 30 percent of
the governor's reduction or $56 million. She considered how
much the state supported the University students in
comparison to the rest of the U.S.
Representative Sullivan-Leonard cited figures showing that
Alaska students cost the state $16,000, whereas the U.S.
average was approximately $7,600. She stressed the
importance of bringing down the numbers. She expounded that
the University brought in $454 million in revenue, with
expenditures exceeding $583 million. She stated it was not
balanced or what she wanted to see for a university. She
noted that the University was a land grant university and
it continued to look for funds from foundation work,
philanthropy, fundraising, and through land sales.
Co-Chair Wilson asked for verification that if the $56
million reduction was adopted that the total reduction
would be $76 million given the passage of the previous
amendment [Amendment H UOA 2].
Representative Sullivan-Leonard replied "sure."
Representative Josephson considered what would happen if
the amendment passed. He observed that it was ostensible
the governor would decide to veto additional funding from
the University budget, which he believed would be
consistent with the governor's actions. He thought it could
mean the University would shutter and close one of its
three main campuses. He stressed it would be a cultural
shift for the state. He responded to comments made by the
amendment sponsor and reported that the subcommittee had
learned that although Alaska was the largest state, its
land grant was comparable to Delaware's, which he believed
was the second smallest state. Additionally, there was no
community college system in Alaska - the University
welcomed all students.
Representative Josephson elaborated that in other states
community colleges provided revenue for the greater college
and university statewide system, while in Alaska only
around $1 million came in from Kodiak and he believed
Valdez. He continued that the state had asked the
University to do all of those things - he noted there was a
full page list of statutory items the University was
required to do. He thought the issue needed much more
consideration.
10:46:41 PM
Co-Chair Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Sullivan-Leonard, Tilton, Carpenter
OPPOSED: Merrick, Ortiz, Josephson, Johnston, Knopp, LeBon,
Wilson, Foster
The MOTION to adopt Amendment H UOA 4 FAILED (3/8).
10:47:40 PM
Representative LeBon WITHDREW Amendment H UOA 5 (copy on
file).
Co-Chair Foster noted that Amendment H UOA 6 had been
previously withdrawn.
Representative Merrick WITHDREW Amendment H JUD 1 (copy on
file).
Co-Chair Wilson MOVED to ADOPT Amendments H LEG 1, 2, and 3
(copy on file):
Budget and Audit Committee
Legislative Finance
H LEG 1 - Reduction to align the FY 20 funding level
with FY 18 actual expenditures.
Reduction to align the FY 20 funding level with FY 18
actual expenditures.
1004 Gen Fund (UGF) -800.0
Budget and Audit Committee
Committee Expenses
H LEG 2 - Reduction to more closely align the FY 20
funding level with FY 18 actual expenditures.
Reduction to more closely align the FY 20 funding
level with FY 18 actual expenditures.
1004 Gen Fund (UGF) -800.0
Legislative Operating Budget
H LEG 3 - Reduce Legislative Operating Budget to align
more closely with FY 18 actual expenditures
Reduce Legislative Operating Budget to align more
closely with FY 18 actual expenditures.
1004 Gen Fund (UGF) -1,000.0
Vice-Chair Ortiz OBJECTED for discussion.
Co-Chair Wilson reviewed the amendments. She believed it
was about time the legislature took a bit out of its own
budget after taking out of all of the other budgets. She
intended to review the three amendments separately for
clarity. She began with Amendment H LEG 1 pertaining to the
budget for Budget and Audit Committee and Legislative
Finance Division. She reported that budget had been
$1,952,300 in FY 17, $6,121,300 in FY 18, $6,778,900 in FY
19, and $7,855,500 in FY 20. She reported they had been
lapsing funds and the amendment would reduce the budget by
$800,000 (half of the lapsing funds that occurred in the
past two years).
Co-Chair Wilson explained that Amendment H LEG 2 was the
funding level for Budget and Audit Committee expenses. She
reported that committee expenses had been $701,000 in FY
17, $615,600 in FY 18, and a request of $1,907,700 for FY
20. The amendment would reduce the budget by $800,000 (half
of the lapsing funds that occurred in the past two years).
Co-Chair Wilson concluded with Amendment H LEG 3 pertaining
to the legislative operating budget. She detailed that
budget had been $8.8 million in FY 17, $9.3 million in FY
18, $10.8 million in FY 20. The proposed cut of $1 million
represented half of the funds that had been lapsing funds.
She explained that lapsing funds typically went towards the
capital projects and did not go into the General Fund.
Co-Chair Foster asked why there had been a jump in cost for
the committees [in Amendment H LEG 1].
Co-Chair Wilson replied it was because the legislature had
asked for more money.
Co-Chair Foster asked if the increase had to do with an
increase in the number of Senate Finance Committee members.
Co-Chair Wilson responded that the addition "was another
portion of the agencies."
Vice-Chair Ortiz asked where the reductions would be seen
within the legislature.
10:51:31 PM
Co-Chair Wilson replied that the $800,000 went to committee
expenses - money was allocated amongst the various
committees. For instance, the pizza committee members had
for dinner that evening had come from a fund. The funds
were in allocations and would be determined by each
committee. She reiterated her earlier statement that the
reduction equaled half of the lapsing funds from the past
couple of years. The reduction meant there would be fewer
funds to lapse into the capital budget. She added that even
with the reduction, funds would most likely lapse. She
reported that funds had lapsed even after special sessions.
She believed the legislature should feel "some of the pain"
as all other agencies and departments had. She stated it
was one of the budgets that had grown because the Senate
had added a couple of positions.
Co-Chair Foster recognized Representatives Matt Claman,
Adam Wool, and Lance Pruitt in the audience.
Representative Josephson believed there were ways the
legislature could reduce its budget. He asked if the
amendment considered things like special session travel and
other.
Co-Chair Wilson responded that in the last couple of years
there had been five special sessions - even after those
five sessions there had been money that lapsed to the
capital budget.
Representative Knopp asked if the $2.6 million would go
back to the capital budget or the General Fund.
Co-Chair Wilson replied her intent was for the funds to go
back to the General Fund like all of the other savings made
by the amendments.
Representative Knopp remarked that he would prefer the
funds to go to capital projects.
Co-Chair Wilson noted that not everyone got a choice. She
added that she was responsible for the capital budget and
may change her mind later.
Vice-Chair Ortiz WITHDREW his OBJECTION.
There being NO further OBJECTION, Amendments H LEG 1, 2,
and 3 were ADOPTED.
Co-Chair Foster reported the committee had concluded
amendments on the operating budget.
HB 39 was HEARD and HELD in committee for further
consideration.
HB 40 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the schedule for the following
day.
ADJOURNMENT
10:56:00 PM
The meeting was adjourned at 10:55 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 39 Am Actions 4.4AM.pdf |
HFIN 4/4/2019 9:00:00 AM |
HB 39 |
| HB 39 Amendment Language LS16.pdf |
HFIN 4/4/2019 9:00:00 AM |
HB 39 |
| HB 39 Am Actions 4.4PM.pdf |
HFIN 4/4/2019 9:00:00 AM |
HB 39 |
| HB 39 Packet 7 Public Testimony Op Budget.pdf |
HFIN 4/4/2019 9:00:00 AM |
HB 39 |