Legislature(2013 - 2014)SENATE FINANCE 532
01/22/2013 09:00 AM Senate FINANCE
| Audio | Topic |
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| Start | |
| Fy14 Budget Overview: Office of Management and Budget | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
January 22, 2013
9:01 a.m.
9:01:53 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:01 a.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Donny Olson
MEMBERS ABSENT
Senator Lyman Hoffman
ALSO PRESENT
Karen Rehfeld, Director, Office of Management and Budget,
Office of the Governor; John Boucher, Senior Economist,
Office of Management and Budget, Office of the Governor;
SUMMARY
FY14 Budget Overview: Office of Management and Budget
· Karen Rehfeld, Director, Office of Management and
Budget, Office of the Governor
Co-Chair Kelly discussed the meeting's agenda and welcomed
the Senate Finance Committee back to work.
^FY14 Budget Overview: Office of Management and Budget
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, introduced herself and her staff
for the record.
9:06:38 AM
Ms. Rehfeld began a PowerPoint presentation titled "FY2014
Budget Overview"(copy on file) and discussed slide 2 titled
"Budget Vision."
· Economic Growth and Strengthening Families
Ms. Rehfeld stated that the presentation would be a high
level overview and relayed that SB 18, SB 19, and SB 20
represented the capital budget, the operating budget, and
the mental health operating and capital budget requests
respectively. The Office of Management and Budget (OMB)
would be providing the committee with the supplemental bill
for FY 13 on its due date, which was January 29th. She
discussed the governor's comments about his budget release
in December and related that Alaska was in a "solid
position." She offered that Alaska's Triple A bond rating
was due, in large part, to the state's reserve accounts,
the Alaska Permanent Fund, the budget discipline of the
Finance Committee and the administration, as well as the
development of the state's resources. The administration
had spent months reviewing and working with state agencies
and the University of Alaska in an effort to review budget
requests and challenges. She stated that the administration
was trying to bring forward the most pressing needs, while
still holding the line on state spending; the
administration would accomplish this by focusing on some
key priorities and principles. She related that the
governor's vision had been consistent and that the economic
growth and strengthening of Alaska's families were the key
principles that he used in developing the budget. She
offered that Alaska's future was dependent on responsibly
developing natural resources, as well as creating jobs and
economic development for families. She opined that the
budget supported the governor's vision in several key
areas.
Ms. Rehfeld addressed slide 3 titled "Budget Priorities."
•Resources and Energy
•Education
•Public Safety
•Transportation/Infrastructure
•Military Support
Ms. Rehfeld spoke to slide 4 titled "Fall 2012 Revenue
forecast" and pointed out that there had been a significant
decrease in revenue to the state from the spring forecast
to the fall forecast. She offered that the declining oil
production and price have a profound impact on Alaska's
future and its available revenue. In the spring, OMB's
forecast for the current fiscal year was about $8.44
billion in revenue; however, the revised fall forecast had
that number down to $7.5 billion and represented a
reduction of $928 million. She related that for the next
fiscal year, OMB's spring forecast was for $7.68 billion in
revenue; the fall forecast for that year was just over $7
billion and showed a further reduction of $678 million in
revenue. The total loss of revenue over the two-year period
would be about $1.6 billion. She concluded that the loss in
revenue provided the context for developing the budget.
9:10:27 AM
Ms. Rehfeld discussed slide 5 titled "FY2013/FY 2014
Budgets: Big Picture." The slide overlaid the proposed
spending plan for both the current fiscal year and the next
in order to show what it looked like with the revised
forecast. She pointed out that when the governor had signed
the appropriation bills for FY13, OMB had been anticipating
a surplus of about $514 million, which would then go into
the Statutory Budget Reserve Fund; however, based on the
revised forecast, the state would need to dip into the
budget reserve to cover $410 million in the current fiscal
year. She offered that the numbers would change as the year
went on and actual expenditures became known; there would
be a revised forecast in the spring. In FY14, the
governor's proposed budget was just under $6.5 billion. She
pointed out that there was potential for $508 million going
into the Statutory Budget Reserve Fund if the budget was
approved "today." She stated that with less revenue, the
state would have to spend less. OMB had worked with the
departments to evaluate the people and resources that were
available without increasing the budget in FY14. OMB was
working on decreasing overhead costs, increasing
efficiencies, and focusing on the priorities and services
that Alaskans expected.
Ms. Rehfeld spoke to slide 6 titled "Alaska Reserve
Accounts." She related that the slide was a visual
examination of what happened in the growth of the state's
two main savings accounts. The Constitutional Budget
Reserve was represented with blue bars and the Statutory
Budget Reserve was the red bars. At the end of FY12 and
beginning of FY13, the state had about $16 billion in
savings accounts. She relayed that the legislature had
taken strong steps in maintaining and building the budget
reserves when there had been windfalls of high oil prices.
She offered that the maintained reserves were largely
responsible for the state's Triple A bond rating and that
managing the use of the reserves in times of declining
production were key to OMB's long-term fiscal plan.
Ms. Rehfeld addressed slide 7 titled "Spending Controls."
•Improve/Streamline Business Processes
•Enhance technology
•Lower cost of purchasing
•Reduce footprint/cost of office space
•Share services
Ms. Rehfeld related that over the past three years, state
agencies had absorbed increased costs, such as merit
increases for staff, increases in central support services,
contractual costs, and lease costs. The state agencies had
been directed to manage their budgets and provide services
to Alaskan's without disruptions. She recalled that there
were over 280 positions deleted from the FY13 budget and
that OMB had asked departments to make internal adjustments
to minimize the impact on service delivery. She discussed
the second bullet point and related that doing more
business online was reducing costs. She spoke to the third
bullet point. The Division of General Services had been
very proactive in negotiating master contracts that help
all agencies benefit from economies of scale and being able
to access goods and services. She discussed the fourth
bullet point and mentioned that the Department of
Administration had just implemented new space standards.
She concluded that the administration was attempting to
maximize efficiency and control costs.
9:16:19 AM
Ms. Rehfeld discussed slide 8 titled "FY2014 Budget by Fund
Source." The unrestricted general fund request of $6.49
billion was roughly 51 percent of the total budget. The
federal funds were projected to be $2.94 billion or 23
percent of the state's budget; a large portion the federal
funding would be secured by the Department of
Transportation and Public Facilities, the Department of
Health and Social Services (DHSS), the Department of
Education and Early Development (DEED), and the Department
of Labor and Workforce Development. The Permanent Fund
represented about 15 percent or $1.29 billion of the budget
request. Designated general funds represented 7 percent or
$866.6 million of the budget request and included roughly
$337 million in university receipts. She pointed out that
the general fund program receipts were roughly $133
million. Other state funds represented 4 percent or $559.3
million, and included $146 million in international airport
funds, about $133 million in Permanent Fund receipts, and
around $70 million in statutorily designated program
receipts. She concluded that the slide was a quick snapshot
of how the $12.8 billion budget was broken down.
Co-Chair Kelly requested that the committee refrain from
asking questions regarding the presentation until the end
of the meeting.
Ms. Rehfeld addressed slide 9 titled "FY2014 Expenditures
by Category." She related the slide's pie chart broke down
the budget into a number of specific slices. She relayed
that the different red colored slices on the right hand
side of the chart were typically considered non-
discretionary funds. The left hand side of the chart
totaled around $6.6 billion or 52 percent of the budget;
these pie slices included the formula programs, K-12
education, Medicaid, Power Cost Equalization (PCE), public
assistance, statewide appropriations, and Permanent Fund
Dividends and inflation proofing. The right hand side of
the chart reflected about $6.2 billion or 48 percent of the
total budget; this side of the chart represented funds that
were "more or less" considered discretionary and included
the non-formula pieces of the different agencies and the
capital budget. The checkered area of the pie chart broke
down the portion of agency non-formula funding, which was
general fund; the checkered area represented about $2.3
billion, roughly half of which would be personal services
cost. The agency non-formula funding included 14 state
agencies, the University of Alaska, the governor, the
Alaska Legislature, and the Alaska Court System; the Alaska
State Troopers, public health nurses, highway maintenance
employees, and other public servants were included on the
right hand side of the chart. She concluded that the slide
gave some context to the components of the budget and some
of the areas that subcommittees would be examining.
9:20:40 AM
Ms. Rehfeld spoke to slide 10 titled "FY2014 Budget
Priorities."
•Public Safety
Choose Respect- $14.8 million
-Prevention and Intervention $5.25 million
-Support for Survivors $2.6 million
-Law Enforcement $6.9 million
New Troopers
-Railbelt: 15 Troopers $2.8 million
-Hooper Bay: 2 Troopers $823.7 thousand
Ms. Rehfeld stated that the FY14 budget represented the
fourth year of the governor's Choose Respect Initiative,
which was a domestic violence and sexual assault prevention
initiative. She spoke to the "Prevention and Intervention"
increment and related that it was used for public education
and awareness, community level prevention projects, and
rural pilot projects. She stated that the increment for
"Support and Intervention" generally was used to support
shelters for victims, services for children who were
exposed to violence, as well as trauma services for
victims. She spoke to the "Law Enforcement" increment and
mentioned that the administration had requested additional
prosecutors for child abuse in Bethel, Fairbanks, and
Juneau, as well as three investigators for child protection
and sex trafficking. She observed that over 120 communities
participated in Choose Respect activities the prior year
and that the administration expected more communities to
participate in March of 2013. She pointed out that the
additional troopers in the Railbelt area would be for
Fairbanks, Mat-Su, and Kenai. Additionally, the governor
was requesting a new trooper post in Hooper Bay. She
offered that the Hooper Bay request was similar to the
approved increment for the Selawick post and noted that the
same model was being used in Emmonak.
Ms. Rehfeld discussed slide 11 titled "FY2014 Budget
Priorities."
•Energy
-Susitna-Watana Hydro $95.0 million
-Weatherization/Home Energy $51.5 million
-Sustainable Energy Fund $125.0 million
-Energy Assistance $67.2 million
-Renewable Energy Projects $25.0 million
Ms. Rehfeld related that affordable energy was important to
the economic health of Alaska and that the governor had
proposed a comprehensive energy strategy. She noted that
the increment for the Susitna-Watana hydro project would be
used on the feasibility studies, the design, and the
environmental prerequisites. The administration was
requesting capitalization of the Sustainable Energy
Transmission and Supply Development Fund; there would be a
technical correction in the amended budget for this
appropriation. She stated that the weatherization program
had been very effective in providing cost effective energy
improvements to low-income families and their homes. The
Home Energy Rebate Program request was for $20 million in
general funds; the program provided rebates to home owners
for energy efficiency improvements to their homes. The
"Energy Assistance" increment included just under $27
million for the Low Income Heating Assistance Program and
full funding of PCE at $40 million. She stated that over
the past five years, over $200 million had been
appropriated for renewable energy projects statewide,
particularly in high-cost areas and that the current
request would fund round six of the project.
9:25:08 AM
Ms. Rehfeld spoke to slide 12 titled "FY214 Budget
Priorities."
•Education
-90% Graduation rate by 2020
-Jobs for Alaska's graduates
-Alaska Performance Scholarships
-Digital Learning Initiative
-K-3 Literacy Initiative
Ms. Rehfeld stated that the governor's budget fully funded
the Foundation Program and pupil transportation. Alaska had
approximately 129,000 students and 54 school districts
including Mt. Edgecombe High School. She pointed out that
more than 4600 students had qualified for the Alaska
Performance Scholarship to date. The current graduation
rate in Alaska was just under 70 percent. Jobs for Alaska's
Graduates was a new initiative that was targeted to
students who were at risk of not graduating; the initiative
was a cooperative effort between the Department of Labor
and Workforce Development, the Department of Education and
Early Development, United Way, and businesses. She pointed
out that Jobs for Alaska's Graduates was modeled after a
program that was already active in 33 states and that it
had seen great success; approximately 90 percent of the
students involved in these programs were graduating in
comparison to about a 20 percent rate for in-danger
students that did not have access to a similar program. The
Digital Learning Initiative would employ 21st Century
technologies, distance learning, and online assessments;
the biggest piece of the initiative was $3.9 million and
was a partnership with the Association of Alaska School
Boards. She related that the Digital Learning Initiative
would provide digital devices to students and teachers
statewide over a four-year period. Another component of the
Digital Learning Initiative was $1.1 million for the Alaska
Learning Network's distance delivered courses. $900,000 of
the digital learning request would provide support for
online homework help through libraries and schools. She
opined that efficiency at grade level would ensure student
success and that the governor was proposing $320,000 for a
K-3 literacy project; the project would conduct pre and
post screening of about 40,000 students from kindergarten
through 3rd grade in order to identify deficits and target
specific interventions.
Ms. Rehfeld discussed slide 13 titled "FY2014 Budget
Priorities."
•Transportation/Infrastructure
Over $1 billion for Statewide infrastructure projects
-Highways and Aviation $971.3 million
-Village Safe Water $56.5 million
-Municipal Water & Sewer $34.0 million
Schools
-Construction $46.2 million
-Major maintenance $22.3 million
Deferred Maintenance $100.0 million
Ms. Rehfeld stated that the transportation budget was the
core of the governor's budget. The governor was requesting
$33 million for the construction of the Nightmute school;
Nightmute was the next school on the list of the "Kaysulie
Settlement." The administration was also requesting $13
million for the Quinhagak K-12 renovation and addition; the
project had been approved a few years prior, but was
experiencing a short fall in funding. Annually, DEED
prepared a list of the school construction grants that were
requested from all the school districts; in the current
budget, the list totaled $284 million for 24 projects. The
school major maintenance increment would be used to fund 12
projects on DEED's list; this year, DEED's list totaled
just under $254 million for 111 projects. OMB was also
requesting $100 million for the fourth year of a five-year
effort to address state facility deferred maintenance. She
pointed out that the deferred maintenance program had been
very effective and was enabling the administration to plan
for and complete deferred maintenance in a way that it had
not been able to for many years. She shared that Alaska had
about 2200 facilities statewide and that there was a
significant deferred maintenance backlog; the program
brought facilities managers together to examine conditions
and index standards in an attempt to get some consistency
in measuring successes of the program. She offered that a
difference in the current year's deferred maintenance
request was that $2 million of the $100 million would be
allocated towards a capital asset management system, which
departments would use to manage the state's deferred
maintenance.
9:31:37 AM
Ms. Rehfeld spoke to slide 14 titled "2014 Budget
Priorities."
•Resources and Permitting
-Gasline development $50.0 million
-Geologic Material Center $15.0 million
-Permitting and Statewide Digital Mapping $7.3
million
-Roads to resources $18.0 million
-Chinook Salmon Research $10.0 million
Ms. Rehfeld stated that the gasline development increment
included $25 million for the AGIA reimbursement and $25
million for the Alaska Gasline Development Project. She
related that the current Geologic Material Center was
series of vans and that it was a difficult place to conduct
research; the appropriation would enable a better facility
and would upgrade the existing center. She discussed the
permitting and statewide digital mapping increment and
related that the appropriation would enable the completion
of mapping that was being conducted in the Arctic region.
$8.5 million of the Roads to Resources increment would be
targeted to the Ambler mining district. The Chinook Salmon
research appropriation was the first part of a five-year
research initiative that would look at the abundance and
sustainability of the Chinook Salmon stocks. She pointed
out that the Department of Fish and Game had been very
active in developing a research plan with a number of
stakeholders; the plan would look at 12 indicator river
systems statewide.
Ms. Rehfeld addressed slide 15 titled "FY2014 Operating
Budget Highlights."
•Fully fund K-12 Education and Pupil Transportation
$1.2 billion
•Retirement unfunded liability $633.8 million
•Community Revenue Sharing $60.0 million
Ms. Rehfeld stated that the administration was requesting
$25 million that would be specifically targeted for school
districts' energy costs. The retirement unfunded liability
increment was just under $20 million increase from the
prior year. The previous year's evaluation estimated the
unfunded liability at just over $11 billion; $7 billion of
that was at the Public Employee Retirement System (PERS)
and the Teachers Retirement System (TRS). She stated that
PERS was roughly funded at 61.5 percent and that TRS was
roughly funded at 53.6 percent. She related that the
"estimate" was expected to go up after an updated
evaluation was completed. Out of the $633.8 million
requested for the unfunded liability, $312.5 million was
for PERS, $316.8 million was for TRS, and $4.5 million was
for the Judicial Retirement System. She pointed out
Medicaid was not listed on the slide but that it was funded
in the proposed budget at $1.66 billion, $686.5 million of
which were general funds; the general fund amount was an
$18 million increase over the current year.
9:36:00 AM
Ms. Rehfeld discussed slide 16 titled "FY2014 Budget-
Another Perspective." She noted that the slide was another
way to look at the $12.8 billion budget and why it was so
important to Alaskans. She relayed that 60 percent of the
state's total budget went to Alaskans through grants,
direct payments, and capital projects; this included
Medicaid, Permanent Fund Dividends, revenue sharing, school
funding, the retirement unfunded liability, capital
projects, and named recipient grants. She noted that 19
percent of the state's budget went to salaries and
benefits.
Ms. Rehfeld addressed slide 17 titled "For More Information
on the Budget." She stated that the governor had been
consistent in how the budget was presented and the
principles that he had used to develop it. The governor's
principles were based on fiscal restraint, to spend less
and save more, and making strategic investments to grow
Alaska's economy. She related that with the declining oil
production, the state needed to carefully manage its use of
reserves and provide essential services. She stated that
OMB had started working on the budget in July to bring
forward a budget in December. She related that the
Legislative Finance Division had prepared a detailed
overview of the governor's budget and noted that it was a
useful resource that was beneficial for everyone.
Co-Chair Kelly introduced the Senate Finance Committee
Staff.
9:41:23 AM
Co-Chair Meyer thanked Ms. Rehfeld for her presentation and
pointed to slide 7. He commented on the third bullet point
and inquired why the different agencies' purchasing was not
centralized. He noted that each agency had its own
purchasing people and offered that centralizing the
function would get economies of scale and volume discounts.
He discussed the inefficiencies of the current way that
agencies made purchases.
Co-Chair Meyer stated that DEED's and DHSS's budgets
probably made up two-thirds of the state's operating
budget. He inquired what impact Medicaid and its expansion
would have on the budget and further queried if Medicaid
was adequately covered in the budget.
Co-Chair Meyer inquired what the committee could expect
regarding a supplemental budget.
9:44:23 AM
Ms. Rehfeld responded to the first question and stated that
she agreed with Co-Chair Meyer on the purchasing issue;
centralization of purchasing was an area that the state
would continue to make improvements in. She pointed out
that the centralization and decentralization issue had
changed over time and that as budgets got "tighter,"
centralization was something that most agencies and
governments used to try and help improve efficiency and
minimize cost.
Ms. Rehfeld replied to the second question and relayed that
the budget was based on the current Medicaid program and
the projections that DHSS had for the individuals who were
eligible under the current program; however, the budget did
not include funding for any Medicaid expansion. She related
that the "decision has not been made" and that it was her
understanding that there was not a deadline of when the
decision needed to be made. DHSS was currently working on
evaluating the effects of Medicaid expansion on the budget.
She concluded that Medicaid expansion was not contemplated
in the governor's current budget.
Ms. Rehfeld responded to the third question and offered
that Alaska would probably have to draw from the Statutory
Budget Reserves to cover expenses in the current year. She
related that the administration was attempting to manage
problems within the different agencies without "coming
forward in the supplemental bill;" however, there would be
disaster relief funds for the fall flood in the
supplemental bill. The supplemental bill would also include
funding for fire suppression. She reiterated that the
administration was looking very hard at the departments'
requests in order to minimize the number in the
supplemental. She shared that there was a $40 million
supplemental place holder in the spending plan for FY13 and
that the number was fairly low but realistic. She relayed
that there would a lot of pressure on the budgets because
of federal funding changes, the state's revenue picture,
and occurrences at the local level. She concluded that the
administration was trying hard to keep the pressure on the
kinds of requests that were brought forward in order to
keep costs down.
9:48:15 AM
Vice-Chair Fairclough pointed to slide 7 and requested an
update on the electronics related to purchasing. She noted
that her understanding was that the legislature had
provided funding to revamp the electronics of the
procurement system and requested an update. She also
pointed to slide 4 and requested an explanation of the $1.6
billion shortfall. She further queried if the shortfall was
based in production and throughput or if it was based in
price forecasting. Ms. Rehfeld responded that she did not
have a good update on purchasing electronics and stated
that the shortfall on slide 4 was due to production and
price. She stated that John Boucher would provide
additional information regarding the shortfall.
JOHN BOUCHER, SENIOR ECONOMIST, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, responded that the funding
shortfall was a combination of factors, but that lower
production was one of the larger reasons for the lower
forecast; lower price was also contributing to the lower
forecast. He related that another thing that The Department
of Revenue (DOR) had done was lower its expectation on
earnings for the cash the state had on hand. He stated that
the low earnings environment for cash and the lower
expectations for corporate income tax also contributed to
the funding shortfall.
Vice-Chair Fairclough inquired if a historical perspective
was used in order rebalance the projections going forward
in terms of price, production, and earnings. Mr. Boucher
responded that he was unsure what the question was.
Vice-Chair Fairclough queried if there was an error rate
when the state estimated production historically. Mr.
Boucher responded in the affirmative and that DOR had
retooled its forecast have production use a more forwarding
looking view. Vice-Chair Fairclough inquired if the
department took into account the error rate that it had
experienced in the past when it looked forward in its
projections. Mr. Boucher responded in the affirmative and
that DOR was "risking" its long-term production forecast
and that a portion of the forecast was being "risked,"
which influenced the production number going forward;
however, in the short-term, the forecast did not experience
significant changes to the production level.
9:53:12 AM
Co-Chair Kelly noted that Commissioner Butcher and his
staff from DOR would be giving a presentation and a more
detailed explanation of some of the questions at a later
date.
Senator Olson pointed to slide 14. He discussed his
district's issue with the lack of salmon and a number of
criminal cases involving people fishing illegally. He
inquired what the $10 million for Chinook Salmon research
would be used for and where, as well as how the funding
would be used to increase the number of fish that were
available. Ms. Rehfeld responded that the Department of
Fish and Game had more information, but that generally, the
increment reflected a comprehensive research plan that
covered the 12 indicator river systems across the state;
the study would examine what happened to juvenile salmon
through the adult stages including returns and escapement.
She concluded that Department of Fish and Game would be
happy to talk in more detail on the issue.
Senator Olson pointed to the DHSS's budget and noted that
the Medicaid budget had a very low projected rate of 1.5
percent; He inquired if this meant that there would be more
money requested in the supplemental bill. Ms. Rehfeld
responded that OMB was trying hard include only what it
could manage in the FY14 budget and that it did not want to
budget with the expectation of a supplemental to coming
forward. She stated that there had been a number of changes
in the past several years in how Medicaid was budgeted for,
such as the changing federal rates and cost containment
measures by DHSS. She offered that the discussion would
involve talking to DHSS about the projections that it had
developed for the various budgets over the past several
years, what the actual experience had been, and what the
administration had been able to see regarding containing
program costs. She noted that William Streur, who was
Commissioner for DHSS, would probably provide the committee
with more details regarding positive results in the current
program. She reiterated that it was OMB's intention to
provide a budget that "we can live with for 14." ["14" was
made in reference to FY14.] She added that Medicaid
expansion or other things changing were unanticipated in
the current budget.
Co-Chair Kelly noted that there was a lot of skepticism in
the building regarding the Medicaid number and offered that
historically, it had expanded far more than the
administration had anticipated at the time. He added that
OMB had a very good reputation, but that the committee was
skeptical regarding Medicaid.
Vice-Chair Fairclough noted that the state had been de-
centralizing its human resource function and she applauded
the effort. She recalled serving on the House Finance
Committee and related testimony from various departments
that had expressed problems with hiring into the state with
the time lag. She hoped that de-centralization would be a
cost benefit for the departments. Ms. Rehfeld responded
that she appreciated the comments on human resources de-
centralization and that there were still components of
human resources that were appropriately centralized; the
payroll function, the classification, and other similar
things were still centralized. She concluded that being
able to provide agency specific assistance in workforce
development would be very helpful.
9:58:21 AM
Co-Chair Kelly directed the presentation back to slide 16
and requested that the magenta colored portion of the slide
show Medicaid. Ms. Rehfeld responded that Medicaid
represented about $1.66 billion of the magenta colored
piece and directed the presentation back to slide 9. She
stated that the "other formula" section on slide 9 included
Medicaid, public assistance, PCE, and a few other formula
programs.
Co-Chair Kelly noted that he would get the requested
information from Legislative Finance.
Co-Chair Meyer pointed to slide 11 and requested an
explanation of the $67.2 million energy assistance program.
Ms. Rehfeld responded that $27 million of the funding was
for the low-income heating assistance program and that just
over $40 million was for PCE.
Co-Chair Meyer noted that his understanding was that PCE
was set up like an endowment and inquired how the program
was funded. Ms. Rehfeld responded that Co-Chair Meyer was
correct and that over time, the administration was using
the earnings off of the PCE Fund in the budget. She shared
that the current request for PCE was for about $7 million
of general funds and that the remaining amount would come
from the PCE Fund.
Co-Chair Meyer inquired if the goal for PCE was to have all
its funding come from the PCE Fund. Ms. Rehfeld responded
as the earnings improved, that is what the state was
seeing.
Co-Chair Meyer discussed the renewable energy projects and
related that the corresponding bill had been passed in
2008; he inquired if the goal for the program's fund was to
have $250 million put into it. Ms. Rehfeld responded that
the first bill's intent was to appropriate $50 million per
year, but that typically only $25 million had been
appropriated per year. She furthered that the Alaska Energy
Authority (AEA) had gone through its round 6 evaluations
and would be providing a list of the projects that were
evaluated and scored. AEA's list of projects included price
ranges from $25 million to $50 million and would indicate
potential projects that would be available with funding.
Co-Chair Meyer remarked that AEA should probably talk to
the Finance Committee or the Legislative Budget and Audit
Committee. He related that it was his understanding that in
past AEA had not been able to keep up with the money that
was being appropriated. He stated that it would be good to
see how the money for AEA was being spent and if it was
meeting the goal of cutting down overall energy costs in
Rural Alaska. Ms. Rehfeld replied that AEA had some good
information to provide the committee regarding the cost
savings and the projects completed; clearly, there had been
a benefit to the projects. She concluded that AEA was in a
good place.
Co-Chair Meyer stated that he looked forward to having a
conversation with AEA. He stressed that people who lived in
the Railbelt would benefit from an instate gas line, but
that Rural Alaska faced different challenges and issues. He
concluded that PCE and the renewable energy projects were
setup to help Rural Alaskans and that he wanted to make
sure that it happened.
10:03:57 AM
Senator Bishop commented that there would be a
comprehensive overview from AEA on Thursday at 7:30 am.
Senator Dunleavy wondered if there was a way to check the
amount of bond debt to the state, as well as the payment
schedules. Ms. Rehfeld replied that there was a summary of
the state's debt service on the OMB website and that DOR
produced an annual report that contained the requested
information.
10:04:55 AM
AT EASE
10:06:49 AM
RECONVENED
Co-Chair Kelly discussed the weekly meeting agenda.
ADJOURNMENT
10:07:34 AM
The meeting was adjourned at 10:07 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| OMB Budget Overview SFC 01 22 2013 Final.pdf |
SFIN 1/22/2013 9:00:00 AM |
SB19 - OMB Overview |