Legislature(2021 - 2022)ADAMS 519
03/23/2022 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB281 || HB282 | |
| Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 281 | TELECONFERENCED | |
| += | HB 282 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 23, 2022
9:02 a.m.
9:02:22 AM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 9:02 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Bryce Edgmon
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen
Representative Steve Thompson
Representative Adam Wool
MEMBERS ABSENT
None
ALSO PRESENT
Alexei Painter, Director, Legislative Finance Division;
Neil Steininger, Director, Office of Management and Budget,
Office of the Governor; Kelly O'Sullivan, Fiscal Analyst,
Legislative Finance Division.
PRESENT VIA TELECONFERENCE
Marie Marx, Legal Counsel, Legislative Legal Services.
SUMMARY
HB 281 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 281 was HEARD and HELD in committee for
further consideration.
HB 282 APPROP: MENTAL HEALTH BUDGET
HB 282 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster reviewed the agenda for the meeting. The
committee would continue the amendment process on the
operating budget. He relayed the committee would pick up
where it left off the previous day.
HOUSE BILL NO. 281
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making reappropriations; making
supplemental 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. 282
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; making capital
appropriations and supplemental appropriations; and
providing for an effective date."
9:03:09 AM
^AMENDMENTS
Co-Chair Foster noted the committee would begin with
Amendment L12.
9:03:31 AM
AT EASE
9:16:43 AM
RECONVENED
Representative Thompson MOVED to ADOPT Amendment L12, 32-
GH2686\R.3 (Marx, 3/16/22) (copy on file):
Page 102, following line 15:
Insert a new subsection to read:
"(e) Notwithstanding (a) (d) of this section, the
operating budget appropriations made in sec. 1 of this
Act do not include amounts to
(l) pay a bonus or other financial incentive to an
employee of the executive branch
(A) who is subject to the salary schedule in AS
39.27.011 or whose compensation is based on the salary
schedule in AS 39.27.011; or
(B) who is a member of a bargaining unit; or
(2) implement the payment of a bonus or other
financial incentive to a member of a bargaining unit
under a collective bargaining agreement or other
agreement entered into under AS 23.40.070-23.40.260."
Representative Josephson OBJECTED.
Representative Thompson explained the amendment with a
prepared statement:
This amendment proposes a new subsection in the
language section and multiple transactions in the
numbers section of the operating budget. The purpose
of this amendment is to eliminate bonuses for
recruitment and retention where it appears within the
bill. Bonuses have been included in the budget of the
Department of Commerce, Community and Economic
Development, the Department of Family and Community
Services, the Department of Health, and in the
Criminal and Civil Divisions of the Department of Law.
An opinion from our Legislative Legal, which is
attached and very lengthy, to this amendment,
basically said providing such bonuses would probably
be found in violation of state statutes and the state
constitution. Under Article IX of the state
constitution, it states: "No money shall be withdrawn
from the Treasury except in accordance with
appropriations made in the law. No obligation for the
payment of money shall be incurred except as
authorized by law." The legal opinion goes into great
detail as to why bonuses to these employees who are
covered by a union shall have a letter of agreement
between the union and the department in order to
implement a bonus.
For noncovered employees, substantive legislative must
be enacted before bonuses or other monetary agreements
can be approved for appropriation. Then it is a matter
of fairness as to why some employees, covered or
noncovered, would receive a bonus while other
employees within the same agency do not. In addition,
if salaries are deemed not to be adequate, then salary
studies may be needed to be undertaken rather than
giving a bonus. It's a more equitable way to
distribute pay increases and not discriminatory
towards other employees within the same
classification. It should also be noted that in 2005,
the legislature passed a bill which was signed into
law, prohibiting legislative employees from being
awarded or paid a bonus as found in Alaska Statute
24.10.220; therefore, I'm offering this amendment.
Representative Thompson listed individuals available to
answer questions.
9:20:13 AM
Representative Josephson stated there were many different
ways to try to tackle the proposal. One was to query Ms.
Marie Marx [with Legislative Legal Services] whom he had
spoken with about her legal memo. First, he did not believe
the amendment was written well because it would be very
disruptive. He stated he had been told there were 16
bonuses paid that would be very disrupted, many of which
extended into the new fiscal year. He detailed that the
specific bonuses related to health practitioners at the
Department of Health and Social Services (DHSS), Department
of Corrections (DOC), the Department of Public Safety
(DPS), Alaska State Troopers, the Department of
Transportation and Public Facilities (DOT), and more.
Additionally, the amendment expanded beyond bonuses and
prohibited any incentives at all.
Representative Josephson highlighted that the
administration had new bonuses it wanted to offer to the
Office of Children's Services (OCS). He stated that the FY
22 [finance budget] subcommittee had recommended bonuses
for social workers, which had been passed by the
legislature to help acknowledge the trauma social workers
went through. The subcommittee had been told that the [OCS]
social workers were transformed by their experience and
came out damaged. Additionally, the legislature had
appointed a new clinician for the social workers. He
elaborated that the governor had struck all of the items,
but to his credit he had brought them all back.
Representative Josephson noted that the items had already
been scheduled to happen through a letter of agreement with
ASEA to the tune of $1,000. The governor had said more was
needed. He expounded that the turnover was chronic. He
explained that the amendment would disrupt the bonuses,
which would impact children's safety. He prefaced his
statement by acknowledging Ms. Marx for her work for
Legislative Legal. He stated that ultimately her memo
specified specific appropriations were necessary (which the
budget had), letters of agreement, and a temporary act for
workers in the partially exempt category.
9:23:57 AM
Representative Josephson remarked that he could not imagine
a union would object to the state wanting to pay its
workers more. He believed the memo to be premature because
the legislature could sew up the loose ends and accomplish
its objectives prior to the end of session. He stressed
that the current system was arcane and "just churns."
Representative Josephson relayed that typically if it was
possible to establish a rational basis for an action, the
courts would sign off. For example, was there a rational
basis for arguing a trooper may be more vital than an
administrative assistant. He believed so. He recognized
that administrative assistants were needed, but the
ramifications were greater with troopers. He opposed the
amendment.
9:25:31 AM
Representative Wool referenced discussion on bonuses for
Alaska Permanent Fund Corporation (APFC) investors. He
remarked it was standard in the industry to give bonuses
based on investment performance. He highlighted that the
legislature had agreed to those bonuses both the past year
and in the current year. He asked if the bonuses would be
ruled illegal. He pointed out there were recruitment and
retention issues. He relayed that the City of Fairbanks was
giving police officers signing bonuses to try to recruit
officers. He stated the practice was standard in the real
world. He thought it seemed logical for the state to use
the practice as well. He reasoned it was within the
legislature's purview if it was necessary to change some
laws or make adjustments. He asked if the APFC bonuses
would be eliminated and ruled against the law.
Representative Thompson asked Representative Wool to repeat
the end of his question.
Representative Wool complied.
Representative Thompson deferred to Legislative Legal
Services.
Representative LeBon responded to the question as a
cosponsor on the amendment. He relayed that the bonuses
paid to APFC investment officers were based upon exceeding
guidelines or measurements agreed upon before the bonuses
were paid. He clarified that the bonuses were only paid
based on a formula of measured performance that exceeds the
minimum. He relayed that bonuses were stepped up as
performance improved or exceeded the minimum; it was
necessary to earn the bonus by performing at a higher
standard.
9:27:52 AM
Representative Wool asked about a signing bonus. He used
DOC as an example. He did not know whether DOC offered a
signing bonus. He wondered if it was considered a bonus
that would be eliminated.
Representative LeBon answered that a signing bonus was
different than a performance bonus. He noted that
Representative Wool's initial question had been about a
performance bonus. His answer had been about APFC and the
investors earning a bonus based on performance. He stated
that a signing bonus was common in the private sector. He
noted that professional athletes received signing bonuses.
He added that he had also received a signing bonus at one
point. He stated it was a different type of discussion.
Representative Wool was trying to understand what would be
eliminated by the amendment. He understood the difference
between performance and signing bonuses.
MARIE MARX, LEGAL COUNSEL, LEGISLATIVE LEGAL SERVICES (via
teleconference), prefaced her comments with a statement
that it was a policy choice to prohibit or approve
bonuses/financial incentives through letters of agreement
and Legislative Legal Services did not make those policy
choices. In response to Representative Wool's question, she
relayed that the amendment language would prohibit paying a
bonus or other financial incentive. She believed reading
that in context would include any kind of money outside of
regular pay. She added that the language would also be read
in context with the background documents the Legislative
Finance Division (LFD) receives in order to document what
it meant to remove the bonuses from the numbers section of
Section 1 [of the budget].
Ms. Marx elaborated that the amendment would prohibit
paying a bonus or any financial incentive (i.e., retention,
performance, or any kind of bonus) to an employee of the
executive branch who were subject to the salary schedule
under AS 39.27.011. She explained that the statute
addressed classified employees and partially exempt
employees who were not members of a union. The specific
subparagraph addressed nonunion employees under subsection
(e)(1)(a). She noted that subsection (e)(1)(b) talked about
members of a collective bargaining unit.
Ms. Marx relayed that the language would not prevent APFC
employees from receiving a bonus. She explained that
executive branch employees could be broken into categories:
employees who were members of a collective bargaining unit,
employees who were subject to a salary schedule in statute
(AS 39.27.011) or whose compensation was based on that
salary schedule (including partially exempt and classified
employees who were not members of a bargaining unit), and
fully exempt employees. She elaborated that under AS
39.25.110, the salary of fully exempt employees (including
APFC employees) was not based on a salary schedule set in
statute. Therefore, it was the opinion of Legislative Legal
Services that those bonuses would not be prevented by the
amendment. She expounded that the legislature could
authorize the bonuses by including background documentation
to explain the appropriation made in Section 1 of the
numbers section [of the budget]. She noted the payment had
been made in the past, she believed in 2021.
9:32:57 AM
Representative Wool stated his understanding that APFC
received bonuses, yet the amendment would eliminate bonuses
for executive branch positions that were desperately needed
like corrections officers, troopers, nurses, and
physician's assistants. He did not know why the bonuses
needed to be eliminated. He understood the argument that
the bonuses were not legal. He noted legislators were
lawmakers and the bonuses had already been occurring.
Vice-Chair Ortiz stated his understanding based on Ms.
Marx's comments. He asked for verification that Ms. Marx
was saying the bonuses addressed by the amendment were
illegal but could quickly be made legal if the committee
added language to the budget explaining or justifying the
bonuses or increases in pay.
Ms. Marx agreed. Under statutes and court decisions
highlighted in her memo, payments of bonuses for union
employees created a new monetary term of agreement that was
ineffective without a specific legislative appropriation
for the bonuses. She explained that the legislature could
make the policy call to make the monetary terms effective
by including the money for the bonuses in the numbers
section [of the budget] and making it clear in the numbers
section through background documentation, a list of letters
of agreement, or at a minimum, a list of the bargaining
units that had entered into letters of agreement. She
explained the action would clarify there was no question
the legislature was specifically funding the bonuses for
union employees. For nonunion employees it was more
complicated. She explained that because their pay was set
in statute and because statute could not be changed through
an appropriation bill, she recommended enacting temporary
or substantive law to allow bonuses in addition to the
employees' pay scale compensation. She noted the method had
been used in 2005 for legislative employee bonuses. There
were pathways to pay the bonuses and it was the
legislature's policy call to make.
9:36:32 AM
Representative Josephson repeated Ms. Marx's statement that
it was absolutely possible to pay bonuses as long as the
legislature followed the path she had outlined.
Ms. Marx agreed.
Representative Josephson quoted from page 6 of the
Legislative Legal memo: "Where the legislature has intended
to pay bonuses to state employees, it has done so through
either express language in the budget or through the
background documents for an appropriation." He asked for
verification it was the sort of thing Ms. Marx was
referring to.
Ms. Marx agreed.
Representative Josephson stated there had been reference to
a legislative prohibition on bonuses. He asked if there was
any comparable prohibition in the law for everyone else in
the government.
Ms. Marx replied, "No, there is not." She highlighted
existing statute referenced in her memo that addressed how
to pay more money to nonunion (partially exempt and
classified) employees subject to the pay scale under AS
39.27.011. There was a statute that provided a mechanism
for paying the employees outside of their pay scale. She
relayed that it seemed clear from the legislative history
that the governor and legislature intended AS 39.27.011(k)
to be the mechanism a department must use to compensate
employees covered by the statute outside the pay plan. She
added it seemed clear the provision was intended to only
allow flexibility for partially exempt employees. She
informed committee members there was no express prohibition
like the one mentioned by Representative Josephson under AS
24.10.220.
Representative Josephson asked if Representative Wool was
correct that if the legislature did none of the things Ms.
Marx suggested it could do, the net result would be bonuses
for financial investors at APFC who he suspected already
made $200,000 or more, while no other employee could
receive bonuses. He asked if it was Ms. Marx's concern.
9:39:20 AM
Ms. Marx asked for clarity on the question.
Representative Josephson asked if the legislature did not
secure and agree to letters of agreement, the only state
employees who could be confident their bonuses would hold
would be employees at APFC, while troopers, correctional
officers, nurses, and all other employees would be
ineligible.
Ms. Marx answered that she had discussed the issue with LFD
and had been told that currently none of the background
documentation indicated that the legislature knew it was
funding the bonuses. There was documentation that the
legislature made the decision to pay APFC bonuses. She
stated that the legislature could make the policy decision
to fund bonuses from past years such as FY 22 through a
supplemental appropriation. She explained that the
legislature was aware of the funded APFC bonuses, whereas
it was her understanding the legislature had not been aware
of the other letters of agreement and they were never
specifically funded. She stated the legislature could make
the policy call to make a supplemental appropriation for FY
22 or a current year appropriation for FY 23 if it chose to
do so.
9:41:40 AM
Representative Josephson remarked that there were many
smart people who worked for the legislature, the Department
of Law, and the Office of Management and Budget. He looked
at a document (copy not on file) showing that in July 2019,
the state was paying health practitioners $7,500 sign-on
bonuses to take care of prisoners through DOC.
Additionally, the employees had received another $7,500 for
sticking it out for a year. He observed the employees must
have been desperately needed. He asked if Ms. Marx was
saying that someone could litigate, and it could be decided
the individuals may need to pay the bonuses back because
the legislature did not rubber stamp them.
Ms. Marx answered that she would not try to assume what
would happen for past bonuses. She thought it would be
unlikely that a court would make employees pay those
bonuses back. She relayed that the Alaska Supreme Court
would say that the monetary terms were ineffective without
a specific legislative appropriation for the bonuses. She
stated whatever that meant for the union employee and the
bargaining unit, it was something outside of the
legislature's power to make appropriations; the power did
not reside with the executive branch or bargaining units.
The court had stated that the agreements were ineffective
without a specific appropriation for the bonuses. She
relayed that the court had specified that if the state was
free or required to reallocate its present appropriation,
the appropriation power of the legislature would be
frustrated. She explained it was the issue at hand: the
legislature had the power to decide whether to fund the
bonuses in an appropriation bill. She stated the law
required the Department of Administration (DOA) to submit
the letters of agreement to the legislature for funding
approval. She reiterated that the Alaska Supreme Court had
said the monetary terms were ineffective without a specific
legislative appropriation for the bonuses.
9:44:20 AM
Representative LeBon stated that the bonus program for APFC
investment officers was performance-based. He clarified the
performance measures required exceeding the benchmark. He
detailed that the bonus was paid out of the higher return
for the Permanent Fund; therefore, he reasoned in a sense,
the bonuses were self-funded. He stated if the benchmark
was not exceeded set by the APFC Board of Directors, no
bonus was received.
Representative Thompson stated his understanding that
letters of agreement for bonuses needed to be presented to
the legislature for approval.
Ms. Marx cited statute AS 23.40.215 and agreed.
Representative Thompson stated he was not against bonuses,
but he felt they needed to be done according to law. He
remarked the legislature had not properly followed the law
to approve the bonuses.
9:46:22 AM
Vice-Chair Ortiz appreciated the prior comment by
Representative Thompson. Additionally, he appreciated the
amendment because it highlighted some of the issues the
legislature would have in the manner it was attempting to
forward, which appeared to be illegal without addressing
the issue. He did not want to handcuff the ability for
agencies such as OCS and troopers to recruit and retain
people. He thought the amendment would likely slow up the
process. He asked if the amendment would handcuff the
ability for agencies like OCS and DPS from hiring. He
stressed the state had a real problem with recruitment and
retention. He was unclear on how to vote on the amendment.
He reasoned that voting in favor of the amendment would be
voting in favor of the law; however, at the same time, it
was necessary to address recruitment and retention problems
facing the state.
9:48:03 AM
AT EASE
9:56:59 AM
RECONVENED
Co-Chair Foster relayed that the committee would roll the
Amendment L12 to a later time to give Legislative Legal
Services time to work on contingency language.
Representative Wool reviewed his earlier question about
following the law. He clarified he had not meant to be glib
about following laws. He knew that in the current and
previous budgets, the legislature had often included bonus
language drafted by Legislative Legal Services. He hoped
the issue could be resolved without getting rid of the
bonus program that he believed was much needed. He stated
that a trooper hired the previous month received a sign-on
bonus and another bonus in a year's time. He did not want
to be the one to renege on the bonus.
Representative Josephson believed the trooper
Representative Wool had spoken of would have a claim in
restitution, reliance, and equitable remedies. He stated
that the employee had signed a contract in reliance on
those things and would likely to win the contract. He
believed the other body was aware of the issue and working
on it. He pointed out that the legislature frequently wrote
budgets with "these sorts of curative fixes and triggers."
He shared the governor's grave concern about the 60 percent
turnover at OCS.
Co-Chair Foster noted the committee would come back to
Amendment L12 at a later time.
9:59:25 AM
Representative Wool MOVED to ADOPT Amendment L13, 32-
GH2686\R.17 (Marx, 3/17/22) (copy on file):
Page 81, line 11:
Delete "50,000,000"
Insert "57,000,000"
Representative Rasmussen OBJECTED.
Representative Wool highlighted that the current budget
added $50 million as a one-time increment to education.
There was a proposed Base Student Allocation (BSA) increase
bill the committee had heard that would raise the BSA by
about $57 million. He believed the BSA had not been
increased since 2017. He elaborated that when adjusted for
inflation from 2017 to 2022, the increase was approaching
$100 million. He believed the bill sponsor only went back
to the last one-time increment of $30 million, which was
more recent than 2017. He stated the contingency language
in the budget bill for $50 million was included in the
event the BSA bill did not pass. He spoke to the desire to
increase education funding because school districts were in
desperate need for funding, primarily because flat funding
did not account for increases in expenses. He explained the
amendment would increase the $50 million in the current
budget with $57 million to be equivalent with the BSA bill.
Representative Wool provided wrap up on the amendment. He
stated that education was a primary core service that had
been flat funded for a long time. He elaborated that the
committee had heard from educators, principals, and
superintendents that schools were having a tough time. He
highlighted increased fuel costs. He remarked that school
districts did not receive a supplemental energy check. He
relayed that his school district had a $17 million to $19
million deficit at present. He noted that the $57 million
increase would mean his district would still have a large
deficit it was working to overcome. He thought the
amendment was a small ask to equal the BSA bill increase.
Representative Rasmussen saw another upcoming $450 million
proposal [in the amendment packet]. She was trying to
understand whether the proposals were related in any way.
She asked if they were both for education funding.
Co-Chair Foster confirmed there were two separate
amendments both addressing education funding.
10:03:15 AM
AT EASE
10:04:56 AM
RECONVENED
Representative Wool stated the amendment was a one-time
increment of $57 million to education to go toward BSA-type
expenditures for students, classrooms, and teachers. He
stated the amendment contained the same funding amount as
the BSA specific legislation. He stated that schools needed
the funding. He did not want to include language
micromanaging exactly how the funds would be spent. He
believed schools had enough needs and the schools knew what
those needs were.
Representative Rasmussen supported the $50 million
[currently in the budget]. She opposed the amendment to
increase the number to $57 million.
Representative Rasmussen MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, LeBon, Ortiz, Thompson, Wool, Edgmon,
Foster
OPPOSED: Rasmussen, Carpenter, Johnson, Merrick
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment L13 was ADOPTED.
10:07:15 AM
Co-Chair Foster reviewed the schedule for the day.
Vice-Chair Ortiz MOVED to ADOPT Amendment L14, 32-
GH2686\R.28 (Marx, 3/19/22). [Note: due to the length of
the amendment it has not been included. See copy on file
for detail.]
Representative LeBon OBJECTED.
Vice-Chair Ortiz explained the amendment with prepared
remarks:
This amendment is to address the potential high cost
of fuel associated with high crude oil prices. If the
fiscal year average price of Alaska North Slope crude
oil exceeds $70 per barrel for the period from July 1,
2022 to December 1, 2022, money will be transferred
from the General Fund to the Office of the Governor to
be distributed to state agencies to offset increased
fuel and utility costs for the fiscal year ending June
30, 2023.
Vice-Chair Ortiz pointed to page 1, line 12 through page 3,
line 19 (subsection (c)), which outlined the amount to be
transferred given the average per barrel of oil price
rounded to the nearest dollar. He explained it was a
sliding scale scenario. He continued reading from prepared
remarks:
For example, if the average price of oil from July 1
to December 1 is $125 or more per barrel, the amount
transferred to the Office of the Governor would be $27
million. That would be the maximum amount transferred
with the adoption of this amendment. However, if the
average price is $80 per barrel, then $4.5 million
will be transferred (a sliding scale depending on what
the average price per barrel ends up being).
The governor is directed to distribute that money in a
subsection of this amendment, page 3, line 22 through
page 4, line 1 in the following manner: DOT would get
65 percent of the total that's put forward or minus 10
percent; the University of Alaska gets 15 percent of
the total plus or minus 3 percent; the Department of
Family and Community Services gets not more than 5
percent of the total, the Department of Corrections
gets not more than 5 percent of the total; and any
other agency, like for example, Fish and Game, gets
not more than 4 percent of the total.
Vice-Chair Ortiz explained that the amendment tried to
address would acknowledge high fuel costs and the impacts
on agencies. He explained it was similar to the proposed
energy rebate that would go to residents in recognition of
higher costs at home. He wanted agencies to be able to do
what they were asked to do and did not want them to be
handcuffed by rising costs.
10:11:09 AM
Representative Johnson asked how many years a payment would
have been triggered in the past 15 years based on the
amendment specifications. She thought the average price of
oil per barrel had been close to $72 the previous year,
which meant money would have been paid that year.
Vice-Chair Ortiz answered that during previous times when
energy prices had spiked, the legislature had adopted a
fuel trigger process. He did not know how many times it had
occurred in the past.
Representative Johnson asked if the legislature would have
been required to pay the money the previous year [if the
amendment had been in effect]. She was trying to recall the
average fuel price the previous year.
Vice-Chair Ortiz answered there had been no fuel trigger
appropriation put forward in the last budget.
Representative Johnson understood. She clarified she wanted
to know if the amount would have paid [if a fuel trigger
had been in place]. She remarked that oil prices had been
hanging around $70 per barrel. She thought the fuel trigger
seemed close to what prices had been.
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
thought the average oil price was below $70 per barrel the
past year. He explained that $70 had been chosen because
the projection had been $71 per barrel in the fall
forecast. He explained that if oil prices were above the
fall forecast that the governor's budget was built on, the
fuel trigger would take effect. Likewise, if the price was
below what the governor's budget had been built on, the
fuel trigger would not go into effect. He relayed that in
the past, when there had been fuel triggers, the range
varied significantly in terms of the starting point and the
maximum ceiling. The justification in the current year was
to start at the fall forecast due to the way the governor's
budget was constructed.
10:14:47 AM
Representative LeBon asked if it would be a logical
approach to deal with a higher fuel cost among different
agencies in a supplemental budget the following January
after the first six months of the fiscal year had played
out to know how budgets had been impacted.
Mr. Painter answered that the timing of the amendment was
based on prices through December. He explained that if
agencies still needed more money, additional funding could
be included in the supplemental. He relayed that in recent
years there had rarely been supplementals that had been
effective until June. He elaborated that giving agencies
funding in June for the fiscal year that was nearly over,
did not necessarily address a shortfall during the year. In
particular with the Alaska Marine Highway System (AMHS)
that had moved to a calendar year schedule, its operations
in calendar year 2022 would be complete by the time the
legislature came back [into session]. He detailed that if
AMHS was impacted by high fuel cost in the current budget
that had been appropriated the previous year under lower
oil prices, there would not be an opportunity to address
the situation in a supplemental because its appropriation
was effective during the calendar year.
Mr. Painter relayed that other agencies may be able to
adjust during the year. He referenced historical fuel
triggers and explained there had often been multiple
distributions in the year. He expounded that in the last
one in FY 15, there had been a distribution based on prices
through the end of July and another one in December. The
fuel trigger had been structured so it would happen
multiple times throughout the year so that as prices went
up, agencies did not have to adjust their operations based
on oil prices. He stated it was the rationale behind
including the trigger at present versus later on.
10:17:21 AM
Representative Josephson asked if the funds according to
intent language (on pages 1 and 3 of the amendment) would
be constrained to their intended purpose. He had read the
Knowles v Legislative Council decision a couple of times.
He asked if Mr. Painter believed the agencies would do what
the legislature was asking them to do or if they would do
something entirely different.
Mr. Painter stated it was difficult to predict. He used
AMHS as an example and explained that it had budgeted on
fuel in the range of over $2.00 based on where prices had
been several months previous. He explained that if AMHS saw
much higher fuel bills, it would use additional money (it
had previously been appropriated) to offset the fuel bills
because it was a real cost to the agency. He stated there
may be other agencies where fuel was perhaps not a major
cost. He would hope the governor's office would distribute
the money according to fuel need rather than other goals.
Representative Carpenter asked if there was a way to tie a
spending increase to cost versus the price of oil. He
highlighted the amendment was an automatic spending
increase when oil prices went up that was not tied to
actual cost. He asked if there was another way to approach
the issue.
Mr. Painter replied that the price of oil had been used in
the past because it was an easy to identify and consistent
number. He relayed that it could be tied to the price of
fuel, but it would differ by location and type of fuel,
which would be significantly more legwork by the Office of
Management and Budget (OMB). He suggested perhaps the OMB
director could speak to the issue. He reiterated the
advantage of using the ANS [Alaska North Slope] price is it
was a single known number, instead of trying to track down
fuel prices throughout the state, but he could imagine the
option.
Representative Wool liked the amendment because although
high oil prices were good for the state budget, anyone who
used fuel felt the adverse effect. He remarked that the
energy checks to individuals were intended to offset the
high cost. He highlighted that DOT was the number one
recipient under the amendment because it burned a lot of
fuel on ferries, snowplows, and other. He assumed the
numbers were not made up and tracked the price of oil. He
presumed the amendment was based on history of fuel
consumption. He remarked that $71 per barrel was the base
number and as price increased each of the recipients would
have a higher fuel bill. He thought the amendment likely
used a calculation that added a percentage to an agency's
prior fuel cost.
Mr. Painter replied that the amendment used the historical
calculation that had been used the last time it was in the
budget. He elaborated it was $500,000 increments per $1 of
ANS in addition to the percentages used in the historical
calculation. He could not say whether the numbers were
still the right ones to use; the numbers had been used
eight years earlier. As far as he knew, there was not a
recent study of fuel consumption by agency to provide
updated numbers.
Representative Wool noted he supported the amendment.
10:21:38 AM
Representative Thompson used DOT as an example because it
was likely the largest consumer of fuel within state
departments. He assumed the ferry system had long-term
contracts for purchasing fuel for ferries. He did not know
whether there were price escalators included in the
contracts. He did not know how much fuel the department
consumed and how much it stored in expectation of prices
going up. He did not know where it fit if there was any
kind of contract with a set price and amount for a given
period of time.
Mr. Painter responded that he did not know the process for
DOT.
Co-Chair Foster noted that DOT was not online. He asked to
hear from OMB. He briefly restated the question.
Representative Thompson restated his question.
NEIL STEININGER, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, recalled that the AMHS contract for
ferry fuel was based on the market rate sold at the pump
specifically in the Port of Bellingham, W.A. He elaborated
the contract to purchase the fuel did not set a fuel price
in advance and was based on the daily price of fuel
purchased at the time. He relayed there could have been a
change in the process, and he would follow up with DOT for
clarification.
10:24:37 AM
Representative LeBon considered that if a private sector
transportation company such as Alaska Airlines paid more
for fuel, the company had to look at its business model and
decide how much to pass on in ticket prices. He asked if
AMHS looked at its ticket prices and what it charged users
to help offset an increase in the fuel cost.
Mr. Steininger answered that he did know the specific
answer. He relayed that all of the different cost factors
of the AMHS were part of setting the rates. He elaborated
that DOT had moved to some level of dynamic rate setting
for the farebox charges and he believed there was some
level of incorporation of fuel cost, but he did not know
how it specifically impacted ticket price.
Co-Chair Foster asked if the money lapsed if it was not
used by AMHS for fuel within a year.
Mr. Steininger confirmed that if money for fuel in the AMHS
budget was not spent it would lapse back to the appropriate
account, either the General Fund or the Marine Highway
System Fund.
Representative LeBon MAINTAINED the OBJECTION.
Vice-Chair Ortiz provided wrap up on the amendment. He
stated the process was imperfect and reflected the process
used in the past. The amendment recognized that oil prices
were higher than when the governor submitted his original
budget. The amendment would allow agencies to adjust to the
higher prices.
[Note: The first roll call was VOIDED, and a second roll
call was taken.]
A roll call vote was taken on the motion to adopt Amendment
L14.
IN FAVOR: Ortiz, Wool, Edgmon, Johnson, Josephson, Foster
OPPOSED: LeBon, Rasmussen, Thompson, Carpenter, Merrick
The MOTION PASSED (6/5). There being NO further OBJECTION,
Amendment L14 was ADOPTED.
10:28:40 AM
AT EASE
10:42:19 AM
RECONVENED
Co-Chair Foster noted that Amendment L15 would be taken up
a bit later. He relayed the committee would move to
amendments to the numbers section of the bill.
Representative Josephson asked if the committee would go to
numbers amendments and then back to supplemental language
amendments.
Co-Chair Foster clarified that the committee would hear the
amendments in the following order: language section,
numbers section, supplemental numbers section, supplemental
capital section, capital, and handful of additional
amendments.
10:44:33 AM
Representative Wool did not offer Amendment H DOA 1 (copy
on file).
Representative Wool did not offer Amendment H DOA 2 (copy
on file).
10:45:53 AM
Representative Josephson MOVED to ADOPT Amendment DOA A
(copy on file):
Department: Administration
Appropriation: Legal and Advocacy Services
Allocation: Public Defender Agency
Add: $1,381,500 UGF (1004), Personal Services IncOIT
Allocation: Office of Public Advocacy
Add: $968,400 UGF (1004), Personal Services IncOIT
Explanation:
The Public Defender Agency and the Office of Public
Advocacy have serious recruitment and retention
problems. Without a skilled and qualified workforce,
these agencies that are essential to our criminal
justice system have decreased ability to effectively
serve Alaskans.
The additional funding will be used to provide
retention bonuses to Public Defender Agency and Office
of Public Advocacy staff who are employed on June 30,
st
2022, and continue to be employed on May 31 2023. The
bonuses should be allocated as follows:
- $10,000 for attorney positions
- $5,000 for associate attorneys, paralegals,
investigators, and similar positions
- $3,000 for law office assistants, public
guardians, and general office personnel.
It is not the intent of the amendment to provide
bonuses to the Public Defender, OPA Division Director,
or nonpermanent positions.
Representative Carpenter OBJECTED.
Representative Josephson explained the amendment. He stated
that Representative Thompson had discussed the importance
of equity and avoiding discrimination in hiring practices.
He noted it was his strong understanding and the opinion of
Legislative Legal Services that it could be done if a
rational basis was established. He stated that DOA had not
been his subcommittee, but the previous year he had
successfully introduced increases to the Public Defender
Agency, which may or may not have held after the
[governor's] veto. He believed they had been designed to
parallel other increases in the Department of Law (DOL)
that may have been introduced by the administration. He had
not personally recommended bonuses to DOL. His amendment
was designed to be the other side of the debate on salary
increases for attorneys currently in the committee
substitute. He noted there was an amendment partly offered
by Representative LeBon and separately later on [in the
packet] to strip out prosecutor and other attorney salary
increases. The current amendment was designed to parallel
the DOL increases.
Representative Josephson continued to explain the
amendment. He had heard second hand that the Public
Defender Agency and the Office of Public Advocacy, both
housed under DOA, had an increased caseload making
retention challenging. Additionally, the agencies'
attorneys were being poached by the private sector. He
remarked that some of the issue was likely a defined
benefit problem. He elaborated that because the agencies
had a recruitment and retention problem they had to
contract with private counsel, which had always been the
case. He recalled when he was a prosecutor, the Office of
Public Advocacy would sometimes contract with private
counsel. He stated it was more costly than holding their
own staff. He highlighted that Alaska had a shortage of
attorneys and state agencies were competing for the same
small candidate pool.
Representative Josephson reiterated that he had not been on
or attended the DOA subcommittee meetings. He shared that
DOL had been demonstrative and effusive about the problem
without endorsing the increases. He had not directly heard
from the Public Defender Agency or Office of Public
Advocacy on the topic. He relayed he was offering the
amendment in the interest of fairness.
Co-Chair Foster acknowledged Representative Mike Cronk in
the audience.
Co-Chair Merrick referenced Representative Josephson's
statement that the increase the previous year may or may
not have survived veto. She asked OMB if the amount was
vetoed the previous year.
Mr. Steininger replied that there had been no vetoes to
legal and advocacy services the previous year.
10:51:10 AM
Representative Thompson asked if the amendment was
contingent upon the passage of language authorizing the
bonuses.
Co-Chair Foster stated that it likely was connected to the
other amendment offered earlier by Representative Thompson,
which had been held. He suggested perhaps he should have
held Amendment DOA A to be taken up after Representative
Thompson's amendment [Amendment L12].
Representative Josephson responded affirmatively to
Representative Thompson's question. He noted that the
numbers had been painstakingly reviewed by looking at page
after page of PCNs. He elaborated that some of the
employees were likely in bargaining units, while many
certainly if they were attorneys were not. He stated in
the former case there would have to be a letter of
agreement and in the latter case there would have to be a
temporary act.
Co-Chair Foster held Amendment DOA A until the other
related contingency language the Legislative Legal Services
was currently working on had been received.
10:52:48 AM
Representative Johnson MOVED to ADOPT Amendment H CED 1
(copy on file):
H CED 1
Department of Commerce, Community and Economic
Development
Executive Administration
Delete small business grants for small business
innovation research or small business technology
transfer grantees. No impact on DCCED.
1004 General Fund (UGF) -$250,000
Vice-Chair Ortiz OBJECTED.
Representative Johnson explained the amendment. She
explained that $250,000 had been put in the budget in
subcommittee to support innovation and technology grants
for businesses. She remarked that the biggest challenge was
ensuring existing businesses had support. She elaborated
there were hundreds of businesses trying to recover from
the pandemic and some had shut down. She believed the state
needed to help impacted businesses first and encourage
innovation through other means. She did not oppose the
goal, she was merely prioritizing. She noted that the money
[added in subcommittee] was in addition to the work DCCED
already did. She stated it was not necessarily supported or
opposed by DCCED, but it added to the department's workload
because it would add a programmatic component related to
the federal program as well.
10:54:39 AM
Representative Wool stated his understanding that the
funding included by the subcommittee was intended for
businesses that had already applied successfully for
federal grant funding. He believed the increment was the
last dollar in by the state to complete the funding
process. He elaborated that the federal government often
wanted to see the state or other entities put "skin in the
game." He did not think including the funding would inhibit
any other aid to business the department was already doing
or had done. He stated the funding was for innovation and
new businesses. He remarked it was not at the detriment of
existing business; the funding was intended to create new
businesses and innovation. He detailed that a business
would apply to a federal grant and use the state dollars to
complete the deal. He thought the businesses themselves
would be doing much of the work. He wanted to encourage new
innovation and new businesses. He noted that Alaska ranked
near the bottom with federal business support grant money.
He supported the program and opposed the amendment.
Representative Rasmussen thought there was a lot of relief
for government programs in the public sector in the budget
bill. She did not see as much emphasis on the private
sector as she would like. She saw the need for trying to
leverage federal grants. She stated that $250,000 was a
decent amount but relatively minor compared to many other
appropriations. In an effort to support the private sector
and help businesses secure some of the federal grants, she
opposed the amendment.
10:57:25 AM
Representative Wool stated the funding did not take away
businesses that needed help. He stressed that the grants
were not intended to help businesses hurting from COVID or
any other reason. He stated the grants were aimed at
starting new, innovative technology businesses and other
things. He pointed out that $250,000 was small in terms of
the budget. He stated the funds would leverage much larger
federal grants.
10:58:21 AM
AT EASE
10:59:25 AM
RECONVENED
Representative Wool clarified that he had misunderstood
Representative Rasmussen who had spoken in support of
maintaining the funding in the budget. He agreed with
Representative Rasmussen on [opposing] the amendment.
Representative Carpenter stated that $250,000 in the larger
scheme of the budget was fairly insignificant, but it was
still $250,000. He was philosophically opposed to the
concept that handing out free money to startup businesses
was in a business's best interest. He stated that the
struggle was real, and the struggle was valuable. He
opposed to using government money for startup. He stated
there were plenty of opportunities for businesses to seek
funds from the private sector. He did not support spending
$250,000 on seed money for businesses.
Representative Johnson provided wrap up on the amendment.
She clarified she did not oppose innovation, technology,
startups, or any of those things. She highlighted that her
district had some of the most innovative business,
recognized federally and recently by the governor. She
expected she would know people who would apply for the
grant. She stated that $250,000 was still a lot of money to
not have a plan to go forward with. She thought deleting
the money was prudent and vigilant.
Vice-Chair Ortiz MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Johnson, LeBon
OPPOSED: Ortiz, Rasmussen, Thompson, Wool, Edgmon,
Josephson, Merrick, Foster
The MOTION to adopt Amendment H CED 1 FAILED (3/8).
11:03:10 AM
AT EASE
11:04:11 AM
RECONVENED
Representative Rasmussen MOVED to ADOPT Amendment H DOC 1
(copy on file):
H DOC 1
Department of Corrections
Population Management
Four additional drug dogs to combat contraband
Adds authority for four (4) additional drug dogs to
combat contraband at all the department's facilities.
Drug dogs are used for module and cell searches; they
attend and screen visitor events and are used for
staff searches as needed. Finding contraband greatly
increases the safety of inmates and staff.
There are vacant CO positions within the department
that can be reclassified as handler for these new
dogs. If the department is able to secure the dogs in
FY23, the department estimates additional annual
maintenance costs of 47.5 per dog.
One time first year start-up costs include:
Initial Purchase Price
Initial Veterinary Costs
Initial Set-up, Crates, Gear, Fencing, etc.
Basic 6-week Training (increased OT 2 Cos full-time
for 2 months)
Vehicle with K9 upfitting/maintenance
1004 General Fund (UGF) $568,000
Representative Josephson OBJECTED for discussion.
Representative Rasmussen explained the amendment would add
authority for four additional drug dogs within the DOC for
$568,000. The committee had recently seen a presentation
from DOC highlighting work the department was doing to
combat contraband in the department facilities. She
elaborated that dogs were used for module and cell
searches, screening visitor events, and staff searches as
needed. She thought it was a great safety mechanism for
inmates and staff. She acknowledged that $568,000 was a
good sum of money, but believed it was money well spent to
increase inmate and staff safety.
Vice-Chair Ortiz tended to think he would be supportive of
the amendment. He asked if the amendment gave receipt
authority or was a General Fund appropriation.
Representative Rasmussen answered that the amendment would
reclassify a couple of positions for the dog handlers and
there was some GF to pay for the initial purchase of the
dogs, veterinary cost, set up and gear including crates and
fencing, six-week training, and the vehicle necessary to
incorporate the canine upfitting and maintenance.
11:06:32 AM
Vice-Chair Ortiz asked if the amendment had been addressed
at the subcommittee level.
Representative Rasmussen answered that the amendment had
not been done at the subcommittee level. She elaborated
that the amendment had been written after the committee had
heard a presentation by DOC, which had taken place after
subcommittees had concluded.
Representative LeBon asked if the department had requested
additional dogs. He asked if DOC had specifically requested
funding for four dogs.
Representative Rasmussen answered that the department
discussed the success of the program. She was open to
adding to the four dogs proposed in her amendment if
someone wanted to propose a conceptual amendment. She had
landed on four, which would increase the total number from
three to seven. She thought they would want dogs in all
corrections facilities if possible.
Representative LeBon thought he had been reading the
amendment incorrectly as adding four additional dogs. He
asked for the number of additional dogs the amendment would
add.
Representative Rasmussen clarified that the amendment would
bring the current number of three dogs up to seven dogs.
She stated one of the current dogs was going through
training. She referenced documentation showing the current
number of dogs. The amendment would add the additional dogs
to continue the success of the program.
11:08:34 AM
Representative Edgmon liked where the amendment was going.
He stated that with every drug dog came a handler that was
with the dog around the clock. He asked if the $568,000
included in the amendment encapsulated the cost for the
additional positions.
Representative Rasmussen answered that she had worked with
the department to reclassify four existing unfilled
positions to work with the dogs. She elaborated that if the
program continued success, perhaps several positions could
be added to bring the program to full capacity in all DOC
facilities.
Representative Josephson thought it sounded like
Representative Rasmussen had consulted with the department.
He stated his understanding the department was not
necessarily requesting the additional dogs. He wondered if
the department agreed there was need.
Representative Rasmussen replied that based on a
conversation with the department she understood it was an
amendment DOC could implement and it would not cause a
major burden on the department. The department had
highlighted the success of the program. She noted the
committee had heard the commissioner state that if there
were more canine officers added, the department would
happily be able to put them to work.
Representative Wool clarified that he was not anti-dog. He
stated the department had presented and he understood that
one of the dogs had died somewhat recently. He thought
replacing one with two would be an improvement. He was
concerned there was a shortage of corrections officers, and
that the reclassification of positions would mean fewer
officers. He did not know what the recruitment of canine
staff was like currently and he did not know the number of
dogs available. He thought the funding included in the
amendment seemed like a large amount for four dogs. He
remarked that DOC no longer allowed inmates to get their
own mail in the interest of discovering drugs; inmates
received a photocopy of their mail. He stated that the
request had been denied in subcommittee a couple of years
earlier and the department had made the change anyway. He
considered that perhaps dogs sniffing mail would be better
so that inmates could receive handwritten letters from
their families. He would support a conceptual amendment for
two dogs and half the amount.
Representative Rasmussen thought the proposal to reduce the
number to two additional dogs would be going backwards if
the goal was to have dogs in all DOC facilities. She stated
the retention efforts appeared to be better when there were
canines in the facility. She elaborated that the handler
was still in the facility and the amendment would not
eliminate a correctional officer from any facilities. She
highlighted that DOC's dog Koda had died in 2021 and had
identified 25,263 grams of heroin, 22,484 grams of
methamphetamine, and 16,434 grams of cocaine. She believed
less than $150,000 was well worth the accomplishments of
the one dog's efforts. She thought the more that could be
done to identify [drugs] and improve safety for inmates and
correctional officers was money well spent.
11:13:56 AM
Representative Wool believed a corrections officer would
handle the dog and would be taken off the floor. He thought
their job description would change and they would not
necessarily be doing their previous job as a corrections
officer. He believed whatever unit they were taken from
would need to replace them. He thought adding two dogs when
one was lost was adding and not going backwards. He had not
heard the department say its goal was to have a dog in
every facility. He thought perhaps if there was a dog at
every facility a vehicle would not be needed because the
dogs could live at each facility. He MOVED to ADOPT
conceptual Amendment 1 to H DOC 1 to reduce the number of
additional dogs to two and half the cost.
Representative Rasmussen OBJECTED.
Representative Thompson stated the issue could get
complicated. He highlighted a scenario where a correctional
facility was having a problem but there was no dog on site.
He reasoned it meant they would be looking at taking a dog
from another location. He reasoned it would mean added
transportation cost to take the dog between facilities. He
supported the original amendment that would add four dogs.
Representative Rasmussen MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Wool, Johnson, LeBon, Merrick
OPPOSED: Rasmussen, Thompson, Edgmon, Josephson, Ortiz,
Foster
The MOTION to adopt conceptual Amendment 1 to Amendment H
DOC 1 FAILED (5/6).
11:17:28 AM
Representative Rasmussen wrapped up the amendment. She
believed the need for the dogs had been highlighted and she
asked for members' support on the amendment.
Representative Josephson WITHDREW the OBJECTION.
Representative LeBon OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Thompson, Edgmon, Johnson, Josephson, Ortiz,
Rasmussen, Merrick, Foster
OPPOSED: Wool, Carpenter, LeBon
The MOTION PASSED (8/3). There being NO further OBJECTION,
Amendment H DOC 1 was ADOPTED.
11:18:34 AM
Representative Carpenter MOVED to ADOPT Amendment H DOE 1
(copy on file):
H DOE 1
Department of Education and Early Development
Education Support and Administrative Services
Reverse increase in temporary increment for Pre-
Kindergarten Grants (FY2023-FY2024)
1004 General Fund (UGF) -$2.5 million
Vice-Chair Ortiz OBJECTED.
Representative Carpenter explained the amendment would
remove $2.5 million for Pre-K grants from the budget. He
stated it was a policy call to remove the increment added
in the subcommittee.
Vice-Chair Ortiz considered that the committee was pretty
good at appropriating resources towards an end problem. He
clarified the committee was good at (and should be good at)
putting resources towards law enforcement, corrections, and
public safety. He stated the state's task of helping to
provide for public safety was outlined in the state
constitution. He pointed out that the legislature was not
as good at trying to prevent problems from happening. He
underscored that Alaska ranked 49th in the country in
providing access to Pre-K. He elaborated that the
administration spoke about its goal of children reading by
third grade. He believed everyone on the committee believed
it was a valuable goal. He remarked it was one thing to set
a goal and another thing to put policies in place to
achieve the goal. He discussed that the subcommittee had
put in $2.5 million to try to promote more opportunity for
some students across the state to have access to Pre-K.
Vice-Chair Ortiz emphasized that 90 percent of a child's
brain development happened before the age of five. He
stressed the relatively small investment resulted in
substantial positive benefits including school readiness,
stronger social skills, parent involvement in their child's
education, and early intervention for at-risk behaviors. He
emphasized that better outcomes required investment. He
stated that the $2.5 million had been included in the
budget in recognition that the Reads Act may not get
passed, which was another way to address Pre-K
opportunities. He stated the increment matched the amount
included in prior budgets before the recent years of
economic hardship. He added that the increment had been
included in the budget the previous year and it had been
vetoed by the governor. He stated the increment was not
growing government. He stressed it was a small amount to
provide opportunity for better education and life outcomes.
He strongly opposed the amendment.
11:23:31 AM
Representative LeBon stated that when he had served on a
school board in the past, the board had been concerned with
accepting grants. He elaborated that board members had
wanted to know the duration of the grant. He stated that
many of the grants were short-term. He expounded that the
proposal did not expand the BSA formula to include four-
year-old children. He recalled that years back the
Fairbanks School Board had been given a grant opportunity
to expand a program to four-year-old children. The board
had passed on the opportunity because the four-year-old was
not brought into the BSA formula and the funding had been
on the district to absorb the cost or to ask the borough to
cover the expense. He believed the current debate needed a
bigger discussion at a bigger level to include the BSA
formula. He supported the amendment to reduce the funding.
Representative Thompson agreed with Representative LeBon.
He stated it was only a one-time grant for a year. He
detailed that a school district would start a Pre-K program
and the following year the district would be expected to
continue the program and figure out how to pay going
forward. He supported the amendment.
11:25:52 AM
Representative Josephson opposed the amendment. He stated
committee members had all met with the Association of
School Boards, Association of Superintendents, and other
related associations. He emphasized they had never been
asked to cut Pre-K because it was a problem. He stated that
unfortunately he was not able to follow the Reads Act and
he noted there were likely differences between the two
chambers. He stated that even though there would still be
some descent, it was not the direction they wanted to go;
they wanted to go in the opposite direction. He reiterated
his opposition to the amendment.
Representative Wool asked if the $2.5 million was in
addition to other monies designated for Pre-K. He
understood there had been various Pre-K pilot programs for
a decade or more. He asked how many children were in Pre-K
currently.
Co-Chair Foster noted that Vice-Chair Ortiz was the
education subcommittee chair.
Vice-Chair Ortiz answered that the [$2.5 million] increment
was the only money being put forward for Pre-K in terms of
state resources [this statement was corrected by Vice-Chair
Ortiz at 11:40 a.m.]. There were federally funded Head
Start programs across the state. He shared that the state
used to put in significantly more funding towards Pre-K. He
emphasized that statistically, children who received Pre-K
were seven times less likely to be incarcerated. He
highlighted there were serious long-term expenses
associated with incarceration. He stated that anything the
state could do on the upstream was money saved in the long-
term.
Representative Rasmussen shared that she currently had a
child in Pre-K. She thought eliminating the funding created
more challenges for teachers when kids entered kindergarten
and first grade because they had to catch up to the kids
who had the opportunity to participate in a Pre-K program.
She thought there was likely a pool of kids in the middle
without the means to pay for Pre-K. She relayed that Head
Start was a needs-based program and could not accept all
applicants. She believed disparity was created for one
group of students who were caught in the middle. She wanted
to ensure the state created every effort possible to have
students start their K-12 education on the best foot
possible and allow teachers to teach students who were on
the same level academically as much as possible. She
opposed the amendment. She observed that the budget added
$57 million to the K-12 budget and she believed it would be
an error not to fund the increment for Pre-K.
11:30:29 AM
Representative LeBon thought the legislature needed to have
its eyes open when it came to the funding. He asked about
the duration of the funding. He asked how the money was
spread out. He asked about the formula and whether the
Fairbanks School District received a portion of the
funding. He asked if the funding would be targeted to see
how well a program worked in model schools with a
requirement to report back to the legislature. He thought
it was a bigger discussion. He did not know who the
beneficiary of the program was. He thought there were
numerous holes in the proposal.
11:31:37 AM
AT EASE
11:40:26 AM
RECONVENED
Vice-Chair Ortiz made a correction to his previous
statement that the $2.5 million was the only state funded
increment in the budget for Pre-K. The budget also included
$3.2 million for Pre-K. He provided a handout from the
Department of Education and Early Development showing
current Pre-K recipients funded by the $3.2 million (copy
on file).
Representative LeBon appreciated the information because he
had been led to believe the [$2.5 million] increment was
for a new program. He asked if the additional $2.5 million
was added to the existing program and the money was
allocated based on a formula. He asked if the funding was
equally distributed to everyone or based on the number of
students. He asked how the additional $2.5 million would be
allocated across the current recipients.
Vice-Chair Ortiz asked to hear from the Legislative Finance
Division. He added that the $2.5 million had been included
in the budget in previous budget cycles, but it had been
eliminated in recent budgets. He clarified that the $2.5
million restored funding for programs that had been
available in the past.
KELLY O'SULLIVAN, FISCAL ANALYST, LEGISLATIVE FINANCE
DIVISION, answered that it was a competitive application
process awarded to school districts.
Representative LeBon observed that the most common dollar
amount appeared to be around $150,000 given to districts.
He pointed out that the number of students in the program
varied widely in districts receiving the funding. For
example, the Fairbanks North Star School District received
$150,000 for 120 students, while the Juneau School District
received the same funding with half the students. He
wondered why the dollars did not match up the number of
students. He thought it appeared to be an oddity. He
highlighted that the Anchorage School District had 85
students and received $810,000. He did not understand the
formula. He thought the issue required a bigger discussion.
Ms. O'Sullivan did not know what each districts' proposal
was and why some were more expensive than others.
Representative Wool agreed with Representative LeBon there
was more going on than met the eye. He referenced the
program in Fairbanks receiving $150,000 for 120 students.
He stated that traditional Pre-K cost around $1,000 per
month per student. He reasoned there had to be more money
from another source. He did not know where 120 Pre-K kids
were in Fairbanks and did not believe they were in the K-6
schools. He believed the legislature needed to take a
comprehensive look at Pre-K and have a bill that dealt with
the issue. He supported the direction they were going but
believed it was inadequate.
11:45:43 AM
Representative Rasmussen observed that FY 22 was the second
of the third year and FY 23 would be year three of the
program. She stated that Anchorage had several schools with
Pre-K students in classrooms. She believed there were
testing requirements that a student had exhibited enough
disparity in their skill level compared to peers in order
to qualify. She thought a deep dive into Pre-K was needed.
Additionally, she hoped a separate reading bill would pass
the legislature. She stated the funding was for an existing
program and funded the third year of the grant program. She
explained that cutting the increment would cut off the
program.
Representative LeBon referenced the three-year program and
surmised the funding for the program was already in place.
He asked if the $2.5 million was on top of the funding that
was already in place.
Ms. O'Sullivan answered that it was a two-year increase to
an existing $3.2 million. She explained that the $2.5
million would be each year for two years on top of the $3.2
million.
Representative LeBon stated his understanding it was the
third year of a two-year Pre-K program. He asked if the
legislature would know the results of the Pre-K grant
program for selective school districts to see whether it
had been successful. He wondered if the legislature would
hear from the department on whether the funding was money
well spent. For example, he wondered if the legislature
would hear if the money should be added to, rolled into the
BSA, or if the new education model should be Pre-K-12. He
stated it was the bigger discussion.
Ms. O'Sullivan clarified that $3.2 million was included in
the base budget.
Representative Carpenter provided wrap up on Amendment H
DOE 1. He had not intended to muddy the water. He thought
Representative LeBon summed it up appropriately that more
discussion was needed. He remarked it was very easy to say
the increment was only $2.5 million. He pointed out that
small increments led to larger budgets and expectations of
continued funding. He elaborated they had talked about $3.2
million in funding in a previous year and now the committee
was talking about adding another $2.5 million. He reasoned
they would be talking about continuing the increment in the
next budget cycle. He stated that a small increment in the
current year would lead to policy change over time.
Representative Carpenter highlighted that the legislature
had not reached agreement yet on a policy change to include
Pre-K in the education system. He stressed it was an
additional year of school in the state's education system
and the legislature did not have agreement on the topic. He
thought adding the funding was an effort to get in the back
door to make the policy. He did not know the base budget
sent $75,000 to the Sitka School District for two projected
students, while his district would receive $20,000 for
seven projected students. He stated that Fairbanks received
$1,200 per student for 120 students. He did not understand
how the numbers were determined. He did not believe the
numbers reflected an even playing field for students across
the state. He stated that the average funding per student
for a projected 714 students was $4,481. He thought they
needed a larger conversation about the topic.
Vice-Chair Ortiz MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Johnson, LeBon, Thompson
OPPOSED: Edgmon, Josephson, Ortiz, Rasmussen, Wool,
Merrick, Foster
The MOTION to adopt Amendment H DOE 1 FAILED (7/4).
Co-Chair Foster relayed that the committee would continue
with amendments at the afternoon meeting.
HB 281 was HEARD and HELD in committee for further
consideration.
HB 282 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
11:53:00 AM
The meeting was adjourned at 11:52 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 281 & HB 282 Backup Amendment H DOE 1 Ortiz 032322.pdf |
HFIN 3/23/2022 9:00:00 AM |
HB 281 HB 282 |