Legislature(1997 - 1998)
04/24/1998 09:40 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE 24 April 1998 9:40 a.m. TAPES SFC-98, #140, Sides A and B CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 9:40 a.m. PRESENT In addition to Co-chair Pearce, Senators Sharp, Phillips, Donley, Torgerson, Parnell and Adams were present when the meeting was convened. ALSO ATTENDING: Annalee McConnell, Director, Office of Management and Budget; Dan Spencer, Chief Budget Analyst, Office of Management and Budget; Karen Rehfeld, Director, Education Support Services, Department of Education; Kevin Brooks, Director, Division of Administrative Services, Department of Fish and Game; Nico Bus, Administrative Services Manager, Division of Administrative Services, Department of Natural Resources; Pat Davidson, Director, Division of Legislative Audit; Chris Christensen, Staff Counsel, Alaska Court System; Sharon Barton, Director, Division of Administrative Services, Department of Administration; Juanita Hensley, Director, Division of Motor Vehicles; Nancy Slagle, Director, Division of Administrative Services, Department of Transportation and Public Facilities; Laura Baker, Fiscal Analyst, Office of Management and Budget; Mike Greany, Director, Division of Legislative Finance; Dave Tonkovich, Fiscal Analyst, Division of Legislative Finance; Jim Hauck, Fiscal Analyst, Division of Legislative Finance; Susan Taylor, Fiscal Analyst, Division of Legislative Finance; Fred Fisher, Fiscal Analyst, Division of Legislative Finance; aides to committee members and other Legislative members. SUMMARY INFORMATION HOUSE BILL NO. 325 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17c, Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." SENATE CS FOR CS FOR HOUSE BILL NO. 325(FIN) "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making appropriations under art. IX, sec. 17c, Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." HOUSE BILL NO. 326 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." SENATE CS FOR CS FOR HOUSE BILL NO. 326(FIN) "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." Co-chair Pearce introduced SCS HB 325 and SCS HB 326 the operating budget documents. After the adoption of the Legislative subcommittee closeout, Governor's subcommittee closeout and the University subcommittee closeout, Co-chair Pearce said the committee would review the front section and begin amendments. Senator Sharp MOVED adoption of the subcommittee budget closeout on the Legislative budget and that it be incorporated into HB 325. WITHOUT OBJECTION the Legislative budget was ADOPTED into HB 325. Senator Sharp MOVED adoption of the subcommittee budget closeout on the Governor's budget and that it be incorporated into HB 325. WITHOUT OBJECTION the Governor's budget was ADOPTED into HB 325. Senator Adams MOVED adoption of the subcommittee budget closeout on the University of Alaska budget and that it be incorporated into SB 229 and 230. He noted the subcommittee also included two Letters of Intent that the House adopted. There was no funding for salary increase. He called the committee's attention to the front section #7 and section #32. Senator Donley asked if there was anything addressing intent language regarding division of the two campuses? (note brief microphone malfunction) Senator Adams noted the intent language was in the members' packets. There was no intention to divide the two campuses. Senator Sharp clarified that the motion for the adoption of the subcommittee budget closeout on the University of Alaska should have been for HB 325 and 326. Senator Adams stood corrected. WITHOUT OBJECTION the University of Alaska subcommittee budget closeout was ADOPTED into HB 325 and 326. Co-chair Pearce asked the committee members to go to the front section. Co-chair Pearce explained UNIV #1 and said there was an unallocated reduction to the University of Alaska single BRU of $4,453.2 million GF and then an add to the University of Alaska Statewide Programs and Services for contract funding. The amendment, she explained, was to the Governor's requested number. The amendment would fully fund, with new general fund monies, the contractual agreements the University of Alaska brought before the Legislature. The total funding was $2,300.1 million. This would keep stable funding for the University at the FY '98 level and add $2 million for the contracts. (The committee took a brief at ease.) UNIV #1 MOVED by Senator Donley. Senator Adams OBJECTION. He moved an amendment to the amendment placing the number in parenthesis to a new number of $3,640.2 million. Senator Torgerson objected. Senator Adams clarified for Co-chair Pearce that this new number was still a negative. He further explained his amendment to UNIV #1 and said they were taking he number of the following contracts equal to that number so it was equal. If they continued to leave $4,445.3 million in the budget there would be an unallocated reduction from the University that they would have to cut their budget in the amount of $813,000. Then it would show the budget as taking a cut. However, the new number would still fully fund contracts. If there were any questions the University could come forward and testify to his amendment. Senator Torgerson said they were funding $2.3 million over the FY '98 level and felt the original amendment was adequate. Co-chair Pearce asked for a roll call vote. By a vote of 6 nays (Pearce, Sharp, Donley, Torgerson, Parnell, Phillips and 1 yea (Adams) the amendment to UNIV #1 FAILED. Senator Adams WITHDREW his objection to UNIV #1. WITHOUT OBJECTION UNIV #1 was ADOPTED. Co-chair Pearce requested members to look at the draft front section, "L" by Mr. Utermohle, dated 4/24/98. She said she appreciated the time Mr. Utermohle, Legislative Finance staff and her staff put into this draft during the early morning hours. In reviewing the draft she noted section 7 was the CBR and section 9 differed from the House figures. Section 22 at line 16 would change due to the House inadvertently leaving out the new contracts for the confidential employees association. By her recollection the number should be around $76,000. On page 7, lines 13 through 19 represent the funding for the University contracts that were just added to the back section. Line 29 (f), all of pages 8, 9 and 10 through line 16 will have to have their numbers adjusted due to the changes in section 22 and the University. In continuing her review she said sections 23 through the end of the front section mirrored the House figures. As a final note, section 2 also differed from the House in that they had dropped the AIDEA section and now requested the Senate to put it back in. She said as soon as the new draft was completed it would be copied for members and also would be available to the public. Senator Adams questioned page 11, section 25 regarding State debt and other obligations. In particular, line 9 (c) which was the $46 million appropriated to the general fund, he did not believe was the total amount for the debt service. He suggested placing another $34 million out of the cigarette tax to equalize that amount. He also asked what was being done with the collected amount from last year. His interest was specifically in the cigarette tax. Co-chair Pearce said they were not planning here nor in the operating budget to deal with the FY '98 collection of the tobacco tax. She concurred with Senator Adams regarding the approximate $60 million cigarette tax collection in FY '98 that had not been dealt with. She said as soon as there was a collective decision of what to do with those funds it would be dealt with in the capital reappropriation bill. It may be that the Legislature, at the end of the session, will use that money for some FY '99 costs. Senator Adams further inquired to section 9 and would the language in that section cover the no appropriating of new program receipts or federal funds? Co-chair Pearce said the present language was different than the bill that passed. Senator Adams said he would take a closer look at that section. Co-chair Pearce did further explain that the Senate language would not allow the RPL process because they did not accept any federal funds other than those identified in the document. Any new federal funds would have to wait until next year because they would not come before the Legislature this election year as RPL's. They would also not be subject to the 45-day Rule. Co-chair Pearce then called DOA amendment #6. Senator Donley said this was a reduction in the money the department did not think they needed in order to free it up to pay for some other things. (There followed a brief at ease at approximately 10:15 a.m. Co-chair Pearce reconvened the committee at 10:20 a.m. with all members present.) DOA #6 was MOVED by Senator Phillips. Senator Adams had no objection. WITHOUT OBJECTION the amendment was ADOPTED. Co-chair Pearce said this amendment would take the Longevity Bonus grants line in the FY '99 budget to cover expected longevity bonus payments in FY '99. Co-chair Pearce then requested Senator Torgerson to work the committee through the Department of Transportation amendments. (A very brief at ease was taken by the committee at the request of Senator Torgerson.) Senator Torgerson said that most of the amendments had to do with a compromised package for the operation of the Malaspina as a day boat and the starting up of other feeder vessels and day boats in the rest of the Southeast Region. He felt most of this could have been handled through the normal budget process. But it had been necessary to send a letter to the Finance Committee co-chairs threatening to come out with a zero budget for the Department of Transportation and Public Facilities in order to get them to the table. The amendments to be presented today are just to the operating budget; however, there will be a series of amendments for the capital budget. These would basically go to the Southern Region to start supplying federal matching monies for the Inter-Island Authority and to get monies for access across certain areas of land and to complete the studies as to where facilities should be located. He said the department asked for about $2 million for operation of the Malaspina in the Lynn Canal. Most everyone rejected that request saying it was too high. Recently the department returned with a request for $577,000 in general funds as a subsidy to operate the Malaspina. Senator Torgerson still felt this amount was too high and felt the vessel could be operated at break- even. He further explained that a packet explaining the amendments had now been passed out to committee members. The amendments would have a zero impact on the budget. He said they would give the department authorization for half of the requested $577,000 which would come out of Southeast Vessel Operations. More directly, he said, it would come out of the fuel component because the price of fuel has dropped and there is a little leeway room there. He also expected the department to find concessions within their bargaining unit to allow the vessel operate. Senator Torgerson said he was further suggesting that monies be appropriated for the Kennicott and the Malaspina in one BRU because there is still a level mistrust. This would make the Malaspina operate as a back up to the Kennicott. He feels that public pressure and sentiment on running the Malaspina will keep the department to their course as far as spending money for the operation. He said this was a four-year plan and the department did not feel they would require any subsidy for FY years 2001 and 2002. The department said they only needed approximately $1.7 million in FY '99 for needed repairs on the Malaspina. They will be able to run the vessel for the next four years with maintenance just to keep it Coast Guard certified. DOT #1 was MOVED by Senator Torgerson. He further explained that another difficulty with the department was not letting travel agents into the reservations system. He said the Legislature had appropriated somewhere around $3.5 million for new computer reservations system. The system is up and running, however, the department was reluctant to open that up to travel agents. When one calls the 800 number they cannot get through and therefore the department is losing money. It should be opened up to the private sector through travel agents in order to get folks taken care of. The Senator said at yesterday's meeting the department agreed to open up the travel agent services in Sitka, Ketchikan, Wrangell, Juneau and Skagway. He would like to submit this intent language in case the department does not carry through. Senator Phillips asked if Haines travel agents were included? Senator Torgerson said those cities listed were the ones where the largest need would be. Senator Parnell had questions on the language regarding the department putting out the bid for travel agent services. He noted the intent language says the Department of Transportation will offer travel agent services and said the language was pretty loose. He did not want to build travel agencies within the department other than already existed. He suggested the word "offer" be replaced by "contract for". Senator Torgerson concurred. Senator Parnell MOVED amendment to DOT #1, deleting "offer" on line one and inserting "contract for". WITHOUT OBJECTION the amended DOT #1 was ADOPTED. DOT #11 was MOVED by Senator Torgerson. He said this would set up a separate BRU combining the Kennicott and the Malaspina as one unit and the increased authority in the amount of $2,767,351. This would authorize the department to draw down this amount on the Marine Highway fund. WITHOUT OBJECTION amendment DOT #11 was ADOPTED. DOT #2 was MOVED by Senator Torgerson. This amendment would take $288,591 out of Southeast Vessel Operations and put it into the BRU in DOT #11. Senator Adams OBJECTED. He asked what the funding source was. Senator Torgerson responded saying from Southeast Vessel Operations. Senator Adams WITHDREW his objection. WITHOUT OBJECTION amendment DOT #2 was ADOPTED. DOT #3 was WITHDRAWN by Senator Torgerson. DOT #4 was MOVED by Senator Torgerson. He noted a drafting error and said there should be no brackets around the amendment as it was an add back of $78,000 in authority. He advised the committee that the longshoring agents had upped their rates substantially. WITHOUT OBJECTION amendment DOT #4 was ADOPTED. DOT #5 was MOVED by Senator Torgerson. He said this was intent language having to do with securing right-of-way and starting preliminary engineering for land across the Cleveland Peninsula. It is one of the identified links for the feeder vessel component in the Southeast Region. To date the subcommittee is concerned that there is not a lot of action to secure this right-of-way. That is why this letter of intent is being offered. WITHOUT OBJECTION amendment DOT #5 was ADOPTED. DOT #6 was MOVED by Senator Torgerson. He said this amendment would take $90,000 out of the Southeast Shore Operations, which was recognizing the agreement with British Columbia. That agreement forgave $90,000/year for the next nine years in tie-up fees at the Prince Rupert dock. WITHOUT OBJECTION amendment DOT #6 was ADOPTED. DOT #7 was MOVED by Senator Torgerson. Senator Adams OBJECTED. Senator Torgerson said this was a clean up of lapsed funds given to the department last year. He explained the department had reduced the authorization on the federal portion but kept the general fund portion. Senator Adams said if DOT #7 were adopted there would be some impact on Southeast Support Services in their funding. Some federal funds were needed through the utilization of general fund dollars. He said his main objection was that this was being deleted in this particular amendment and these federal funds were at best difficult to get. Senator Torgerson explained that it was a one-time lapse. Co-chair Pearce noted the objection of Senator Adams and requested a roll call vote. By a vote of 6 yeas (Pearce, Sharp, Donley, Torgerson, Parnell, Phillips) and 1 nay (Adams) DOT #7 was ADOPTED. DOT #8 was MOVED by Senator Torgerson. He explained this was also a one-time lapse being denied. WITHOUT OBJECTION amendment DOT #8 was ADOPTED. DOT #9 was MOVED by Senator Torgerson. Senator Adams OBJECTED. Senator Torgerson explained this was $800,000 the department requested to go into the Highway Stabilization Fund. He said it was being denied. Senator Adams said anytime changes were made to a department or division the impact was usually not realized. In order to accomplish the changes some funding was needed to help. Senator Parnell asked what the size of the fund was and its purpose. Senator Torgerson said he thought the balance was around $40 million. He said this was made up of funds from spare sales for one year. These were put into a forward fund for the following year. Co-chair Pearce noted the objection of Senator Adams and requested a roll call vote. By a vote of 6 yeas (Pearce, Sharp, Donley, Torgerson, Parnell, Phillips) and 1 nay (Adams) DOT #9 was ADOPTED. Senator Torgerson WITHDREW amendment DOT #12. DNR #1 was MOVED by Senator Torgerson. Senator Adams OBJECTED. Senator Torgerson said this amendment would correspond with DOT #5, which was a letter of intent asking for the right-of-way to be secured across the Cleveland Peninsula, needed for a feeder vessel in the Southeast Region. Senator Adams WITHDREW his objection. WITHOUT OBJECTION amendment DNR #1 was ADOPTED. Senator Torgerson said presently he had no more amendments. However, he may have further intent language to be offered on Sunday to insure the department does not come back for supplementals for the operation of the Malaspina. Senator Adams advised that the minority may have further amendments for Sunday also. DOA #1 was MOVED by Senator Adams. Co-chair Pearce noted OBJECTION. Senator Adams said this amendment referred to the Office of Public Advocacy. In looking at the annual cost of this particular agency it is entirely case driven. This caseload is very high and it is necessary to look at the supplemental funding. Every time the budget is shortchanged it is necessary to consider supplementals. He noted that the guardian ad litem responsibilities had greatly increased their workload. Also the ratio of civil to criminal cases in the State has increased. He did not believe the offices of the Public Advocate nor Public Defender had abused the kinds of cases they took on. He noted that judges of the Alaska Court System ordered the cases to be taken by these two offices. He further said he was open to any compromise figure. Otherwise the committee will be here next year discussing the same matters in a supplemental budget. (Tape #140 switched to side B, log #591 at 10:45 a.m.) Co-chair Pearce noted an objection and requested a roll call vote. By a vote of 1 yea (Adams) and 6 nays (Pearce, Sharp, Donley, Torgerson, Parnell, Phillips) amendment DOA DOA #2 was MOVED by Senator Adams. Co-chair Pearce OBJECTED. Senator Adams explained that he was asking for approximately $1.7 million for the Office of the Public Defender. He said it was the same argument as for DOA #1. This was also a caseload driven office; eighty-eight percent in criminal cases and twelve percent in civil cases. Neither the office of the Public Defender nor the Public Advocate abused the cases they were required to take. Senator Donley did not feel that Legislative changes was increasing the costs of the agency. He felt significant progress had been made in the criminal justice laws over the past five to six years that have reduced the cost of the administration of criminal justice and reduced the cost to the public defenders. He cited conspiracy laws, finger- printing of minors law, automatic waiver of juvenile laws, laws on DNA testing and laws on 404(b) regarding rules of evidence. It is therefore, not true, to say every new law passed by the Legislature increases the cost in this area. He said many of the reforms were reducing costs. Senator Adams said a decrease in prosecution had not been seen. He said something needed to be done about the caseloads, citing too many cases per individual attorney. It needs to be taken care of; however, the Legislature was not doing it. Co-chair Pearce noted an objection and requested a roll call vote. By a roll call vote of 1 yea (Adams) and 6 nays (Pearce, Sharp, Donley, Torgerson, Parnell, Phillips) DOA DOA #3 was MOVED by Senator Adams. Senator Torgerson OBJECTED. Senator Adams explained this amendment had to do with economic development. It had two increments; one in the amount of $200,000 and the second in the amount of $50,000. Last year there was a twenty-five percent increase in drilling permits, mainly in his district. The loss of the first increment in the amount of $200,000 would result in a negative impact to the State and the oil industry. The other $50,000 increment covered the State's membership in International Oil and Gas Commission. He felt the State needed to be involved in this commission because of its active role in supporting and lobbying for issues such as the continuation of trying to open ANWR and trying to maintain the Resource Conservation Reclamation Act. Co-chair Pearce noted an objection and requested a roll call vote. By a roll call vote of 1 yea (Adams) and 6 nays (Pearce, Sharp, Donley, Torgerson, Parnell, Phillips) DOA Senator Adams WITHDREW amendments DOA #4 and DOA #5. Senator Parnell asked what the House did regarding the budgets for Office of Public Advocate and Office of the Public Defender. Co-chair Pearce indicated that both have increases over FY '98, however not to the extent of the Governor's request. Co-chair Pearce noted the Senate Floor bells had rung and asked that Senate Finance reconvene again on Sunday afternoon at 2:00 p.m. She advised Senator Adams the committee would commence with his amendments. She hoped the committee would also adopt the front section at that time upon its completion. ADJOURNMENT Co-chair Pearce recessed the committee at approximately 10:55 a.m. SFC-98 -12- 4/24/98
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