Legislature(1999 - 2000)

05/06/2000 04:48 PM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                          MINUTES                                                                                             
                 SENATE FINANCE COMMITTEE                                                                                     
                   THIRD SPECIAL SESSION                                                                                      
                        May 6, 2000                                                                                           
                          9:05 AM                                                                                             
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-00 3rd SS # 3, Side A                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair   John   Torgerson    convened   the   meeting   at                                                                    
approximately 9:05 AM.                                                                                                          
                                                                                                                                
PRESENT  Co-Chair  John  Torgerson, Co-Chair  Sean  Parnell,                                                                
Senator Al  Adams, Senator Dave Donley,  Senator Pete Kelly,                                                                    
Senator Randy Phillips and Senator  Gary Wilken were present                                                                    
when  the meeting  convened. Senator  Green arrived  shortly                                                                    
thereafter.                                                                                                                     
                                                                                                                                
Also   Attending:   ALYSON   ELGEE,   Deputy   Commissioner,                                                                  
Department of  Administration; ANNALEE  MCCONNELL, Director,                                                                    
Office of Management and Budget, Office of the Governor                                                                         
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 3002-NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT                                                                               
                                                                                                                                
The  Committee  heard  testimony   from  the  Department  of                                                                    
Administration and reported the bill from Committee.                                                                            
                                                                                                                                
HB 3001-APPROPRIATION: EMPLOYEE SALARY & BENEFITS                                                                               
                                                                                                                                
The Committee heard testimony from  the Office of Management                                                                    
and Budget and reported the bill from Committee.                                                                                
                                                                                                                                
It was noted for the  record that Co-Chair Torgerson chaired                                                                    
this meeting on behalf of Co-Chair Parnell.                                                                                     
                                                                                                                                
     COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 3001(FIN) am                                                                       
     "An  Act making  an appropriation  to cover  the fiscal                                                                    
     year 2001  monetary terms of the  collective bargaining                                                                    
     agreements for  employees of  the University  of Alaska                                                                    
     and   the  fiscal   year   2001   salary  and   benefit                                                                    
     adjustments  for  university   employees  who  are  not                                                                    
     members  of   a  collective  bargaining   unit;  making                                                                    
     appropriations  and   reappropriations  to   cover  the                                                                    
     fiscal  year  2001  monetary  terms  of  all  executive                                                                    
     branch collective bargaining  agreements and the fiscal                                                                    
     year 2001  salary and  benefit adjustments  for elected                                                                    
     officials,  officers, and  employees  of the  executive                                                                    
     branch who  are not members of  a collective bargaining                                                                    
     unit; making an appropriation  to cover the fiscal year                                                                    
     2001 salary  and benefit  adjustments for  Alaska Court                                                                    
     System employees; making an  appropriation to cover the                                                                    
     fiscal  year 2001  salary and  benefit adjustments  for                                                                    
     employees of  the legislature and  to cover  the fiscal                                                                    
     year  2001 benefit  adjustments,  other  than lump  sum                                                                    
     payments,  for  elected  officials of  the  legislative                                                                    
     branch; and providing for an effective date."                                                                              
                                                                                                                                
                                                                                                                                
This  was the  first hearing  for  this bill  in the  Senate                                                                    
Finance Committee.                                                                                                              
                                                                                                                                
ALYSON   ELGEE,    Deputy   Commissioner,    Department   of                                                                    
Administration, testified that this  bill puts into statute,                                                                    
the  same provisions  as those  contained in  the bargaining                                                                    
agreement.                                                                                                                      
                                                                                                                                
Ms. Elgee stated that this  package includes a pay-out of up                                                                    
to $1200  for each  employee accrued at  $50 per  pay period                                                                    
worked  in  the prior  year.  She  noted that  a  qualifying                                                                    
employee  must  be in  active  status  on  July 1,  2000  to                                                                    
receive  the payment.  She added  that special  provision is                                                                    
included to  allow session employees  of the  legislature to                                                                    
receive the payment even if not in active status on July 1.                                                                     
                                                                                                                                
Ms.  Elgee  said the  package  also  includes a  two-percent                                                                    
increase  effective July  1, 2001  and then  a three-percent                                                                    
increase effective July 1, 2002.                                                                                                
                                                                                                                                
Ms. Elgee  spoke to changes  made to the  governor's version                                                                    
of the bill in the  House of Representatives that eliminates                                                                    
legislators  from   participation  in  any  of   the  salary                                                                    
increases.  However, she  said, legislative  employees, non-                                                                    
covered  employees  of  the executive  branch  and  judicial                                                                    
employees are covered.                                                                                                          
                                                                                                                                
Ms.  Elgee   continued  pointing  out  that   the  committee                                                                    
substitute  also increases  the  employer contributions  for                                                                    
health coverage for non-covered state employees.                                                                                
                                                                                                                                
Senator Adams offered a motion  to move from Committee CS HB
3001 (FIN)  am. There  was no objection  and the  bill MOVED                                                                    
from Committee.                                                                                                                 
                                                                                                                                
     COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 3002(FIN)                                                                          
     "An Act  setting the compensation and  certain benefits                                                                    
     of  certain public  officials, officers,  and employees                                                                    
     not  covered by  collective bargaining  agreements; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
ANNALEE  MCCONNELL,  Director,   Office  of  Management  and                                                                    
Budget, Office  of the Governor,  testified that  because of                                                                    
the  confusion  over  the listing  of  salary  and  benefits                                                                    
provisions,  changes were  made to  separate each  branch of                                                                    
government   and  list   their  amounts   individually.  She                                                                    
detailed the  committee substitute  adopted by the  House of                                                                    
Representatives.                                                                                                                
                                                                                                                                
     Section 1  - Outlines  the amount  needed to  cover all                                                                    
     the collective bargaining  agreements for the executive                                                                    
     branch and the salary  and benefits adjustments for the                                                                    
     non-covered state employees.  This equals $20.3 million                                                                    
     total funds  for the executive branch.  Funding sources                                                                    
     are listed on page three.                                                                                                  
                                                                                                                                
Ms. McConnell pointed  out that the general  fund portion of                                                                    
the legislation  is covered by various  reappropriations and                                                                    
utilizes other savings as outlined later in the bill.                                                                           
                                                                                                                                
     Section 1(d)(2)  - Appropriates  money into  the marine                                                                    
     highway system  fund to cover that  agency's portion of                                                                    
     the increased costs.                                                                                                       
                                                                                                                                
     Section 2 - The court  system totals over $1.1 million,                                                                    
     all of which is general funds.                                                                                             
                                                                                                                                
     Section  3  -  The  University of  Alaska  totals  $6.4                                                                    
     million, of which over $5.1 million is general funds.                                                                      
                                                                                                                                
Ms.  McConnell   noted  that  part  of   the  increases  for                                                                    
University employees is already  covered in the University's                                                                    
$16.9 million budget request for  FY 01. She added that this                                                                    
language includes employees covered  in bargaining units and                                                                    
non-covered university employees.                                                                                               
                                                                                                                                
     Section  4 -  The legislature  totals $634,000  general                                                                    
     fund and provides  that the lump sum  payments only are                                                                    
     paid to legislative employees and not to legislators.                                                                      
                                                                                                                                
     Section 5(a) - these items  list the remainder of funds                                                                    
     needed to  cover the  executive branch  and non-covered                                                                    
     employees increases.                                                                                                       
                                                                                                                                
          Subsections 1 through 7 - Remaining balances from                                                                     
     the Department of  Environmental Conservation water and                                                                    
     sewer projects already completed that equal $150,000.                                                                      
                                                                                                                                
Ms. McConnell  commented that this reappropriation  takes no                                                                    
money from any  project, and that the  funds would typically                                                                    
be available for reappropriation to other projects.                                                                             
                                                                                                                                
          Subsection 8 - Balance of $107,000 of capital                                                                         
     appropriation for  emergency housing  originally Alaska                                                                    
     Housing Finance  Corporation (AHFC)  corporate receipts                                                                    
     that lapse at the end of the year.                                                                                         
                                                                                                                                
     Section  5(b)  - Various  miscellaneous  appropriations                                                                    
     and reappropriations.                                                                                                      
                                                                                                                                
          Subsection 1 - The remaining $52,000 of the K-12                                                                      
     foundation formula from the current year.                                                                                  
                                                                                                                                
Ms. McConnell recalled there was  an approximate $14 million                                                                    
lapse balance,  which the  legislature appropriated  all but                                                                    
$52,000 for various purposes.                                                                                                   
                                                                                                                                
          Subsection 2 - Unused funds requested in the FY                                                                       
     00 supplemental  budget to cover increased  fuel prices                                                                    
     for  the   Department  of  Transportation   and  Public                                                                    
     Facilities equaling $82,000.                                                                                               
                                                                                                                                
Ms. McConnell explained that when  the additional funds were                                                                    
appropriated,  the  fuel  prices  had  raised  dramatically.                                                                    
However, she  stated, the gasoline prices  have been reduced                                                                    
somewhat   and   ten-percent    of   the   entire   $820,000                                                                    
appropriation was not needed.                                                                                                   
                                                                                                                                
     Section  5(c) -  Investment  Loss  Trust Fund,  further                                                                    
     releases  totaling $4,055,600,  which  would clear  out                                                                    
     the fund.                                                                                                                  
                                                                                                                                
Ms.  McConnell  relayed  that it  was  previously  projected                                                                    
there would be $2.3 million  available for release from this                                                                    
fund, most  of which  had already been  appropriated through                                                                    
the budget  process to the Department  of Transportation and                                                                    
Public Facilities  and other agencies.  She stated  that the                                                                    
Department  of Law  had  subsequently identified  additional                                                                    
claims against  the fund  that the  courts could  release in                                                                    
the new few  months, which in turn allow the  reserves to be                                                                    
released.                                                                                                                       
                                                                                                                                
     Section 5 (d) - Fish and Game Source                                                                                       
          Subsections 1 through 5 - The capital items                                                                           
          Subsections 6 and 7 - conforming language                                                                             
          Subsection 8 - completes the transaction of the                                                                       
     fish and game funds into the general fund for the                                                                          
     purpose of funding the employee contracts.                                                                                 
                                                                                                                                
Ms. McConnell  reminded the Committee of  the capital budget                                                                    
deliberations  where commercial  fisheries entry  commission                                                                    
receipts  were  used  in  order  to  fund  certain  deferred                                                                    
maintenance  projects within  the  department.  She noted  a                                                                    
balance  of   $900,000  remained  in  the   fund  after  the                                                                    
appropriations.  She explained  that  these  funds would  be                                                                    
used  to  replace  general  funds   used  for  the  deferred                                                                    
maintenance projects, thus freeing  up general funds for the                                                                    
employee contracts.                                                                                                             
                                                                                                                                
     Section 5(e) - Medicaid Pro-Share appropriates                                                                             
     $8,148,600 statutory designated program receipts                                                                           
     through the complicated program.                                                                                           
                                                                                                                                
Ms.  McConnell  shared that  the  Office  of Management  and                                                                    
Budget  has had  recent success  in persuading  hospitals to                                                                    
participate in the Medicaid Pro-Share program.                                                                                  
                                                                                                                                
     Section 5(f) - Longevity Bonus Program remainder of                                                                        
     $1.4 million fast-track supplemental appropriation                                                                         
     amounting to $818,000.                                                                                                     
                                                                                                                                
Ms. McConnell  reminded the  Committee of  the legislature's                                                                    
intent to fully fund the  longevity bonus program with lapse                                                                    
funds  from the  Y2K readiness  project. She  noted that  an                                                                    
additional general fund appropriation  was made to cover any                                                                    
shortfall of  Y2K funds.  She stated  that it  was estimated                                                                    
that $1.4 million general funds  would be necessary, however                                                                    
there were more  Y2K funds lapsed than  anticipated and only                                                                    
$612,000 general funds were utilized.                                                                                           
                                                                                                                                
     Section 5(g) - Debt Service Offset incorporates the                                                                        
     final debt reimbursement amounts submitted by school                                                                       
     districts, which are $2 million lower than projected.                                                                      
                                                                                                                                
Ms.  McConnell   added  that  with  higher   than  projected                                                                    
revenues from the tobacco tax  to appropriate to school debt                                                                    
reimbursement,  the  total  reduction to  the  general  fund                                                                    
appropriation is $4 million.                                                                                                    
                                                                                                                                
     Section 5(h) - Establishes immediate effective dates                                                                       
     to ensure implementation this fiscal year.                                                                                 
                                                                                                                                
Senator Phillips asked why the  additional savings using the                                                                    
Medicaid Pro-share funding source  was not identified during                                                                    
the normal budget process.                                                                                                      
                                                                                                                                
Ms. McConnell  replied that the  pro-share program  has been                                                                    
"enormously  complicated"  and  that the  process  has  been                                                                    
expedited  for  implementation  in   2001.  She  noted  that                                                                    
portions  of the  program have  taken  effect already,  thus                                                                    
increasing   the  savings.   She  added   that  the   entire                                                                    
supplemental  budget  appropriation  for  Medicaid  was  not                                                                    
needed due  to the implementation  of this program  and that                                                                    
further  savings   could  still  be  realized   after  final                                                                    
determinations are made on June  30, 2000. She admitted that                                                                    
it  has been  known there  would  be savings,  but that  the                                                                    
amount of savings is still in question.                                                                                         
                                                                                                                                
Senator Phillips  next asked  if the  administration planned                                                                    
for any supplemental requests to  the FY 01 budget for items                                                                    
other  than forest  fires and  emergencies.  He feared  that                                                                    
after these employee contracts are  funded using the various                                                                    
funding  sources,  the   administration  would  submit  many                                                                    
requests for general funds to make up the shortfall.                                                                            
                                                                                                                                
Ms. McConnell responded that compared  to the previous year,                                                                    
formula programs more completely  funded and would therefore                                                                    
not  require  supplemental  appropriations. She  added  that                                                                    
Medicaid expenses cannot be  precisely anticipated, and that                                                                    
the costs range from $400,000 to $4 million                                                                                     
                                                                                                                                
Senator Green referred  to the language on page  6, lines 25                                                                    
through 27,  "The sum of  $634,000 is appropriated  from the                                                                    
general  fund  to the  legislature  for  salary and  benefit                                                                    
adjustments   for   legislators   and   employees   of   the                                                                    
legislature for the  fiscal year ending June  30, 2001." She                                                                    
understood the legislators would not receive a salary                                                                           
increase and but wanted to know if there would be a benefit                                                                     
adjustment.                                                                                                                     
                                                                                                                                
Ms. McConnell replied this language relates to changes in                                                                       
health benefits but not the actual salary of legislators.                                                                       
                                                                                                                                
Senator Adams offered a motion to report CS HB 3002 (FIN)                                                                       
am from Committee.  Without objection, the bill MOVED from                                                                      
Committee.                                                                                                                      
##                                                                                                                              
ADJOURNED                                                                                                                   
                                                                                                                                
Senator Torgerson recessed the meeting to the call of the                                                                       
Chair at 9:26 AM.                                                                                                               

Document Name Date/Time Subjects