Legislature(2013 - 2014)SENATE FINANCE 532
01/29/2013 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB19 | |
| SB18 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 18 | TELECONFERENCED | |
| *+ | SB 19 | TELECONFERENCED |
SENATE FINANCE COMMITTEE
January 29, 2013
9:02 a.m.
9:02:41 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:02 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 Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Karen Rehfeld, Director, Office of Management and Budget,
Office of the Governor
SUMMARY
SB 18 BUDGET: CAPITAL
SB 18 was HEARD and HELD in committee for further
consideration.
SB 19 APPROP: OPERATING BUDGET/LOANS/FUNDS
SB 19 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 19
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs, capitalizing funds, amending
appropriations, and making reappropriations; and
providing for an effective date."
9:03:57 AM
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, stated that she had provided a
summary of the highlights of the bills at a previous
meeting. She referred to "Operating Budget -
UGF/DGF/Other/Fed Summary by Department; Senate Bill 19/
House Bill 65" (copy on file). She noted that the summary
included the mental health portions of the operating
budget, so the outline included both SB 18 and SB 20. The
total budget for mental health was $240.891 million. She
looked at page 2, which was a comparison of the
unrestricted general fund (UGF) changes from the FY 13
management plan to FY 14 governor proposed budget.
Co-Chair Kelly queried the total budget the mental health
portion of the budget. Ms. Rehfeld responded that the
mental health operating budget totaled $240.891 million;
which included UGF of $205.921 million.
9:06:37 AM
Ms. Rehfeld shared that the total number that was proposed
for the operating budget was $9.795 billion. The UGF was
just over 59 percent at $5.7 billion; designated general
funds (DGF) was 8 percent at roughly $777.4 million; other
funds were $1.283 billion at 13 percent; and federal funds
were approximately $2 billion at 20 percent of the total
budget. She explained that the budget process begins in
July, and it takes months to complete the budget proposals.
She remarked that the supplemental budget bill would be
introduced the following day, and the budget amendments
would be due to the legislature on the 30th day of the
session. She stressed that the budget work continued
throughout the year. The structure of SB 19 contained 36
sections, and was 67 pages long.
Ms. Rehfeld looked at Sections 1 through 3 of SB 19, which
were known as the number sections of SB 19. These sections
totaled $6.741 billion. The sections were organized by
department; and by appropriation and allocation within the
department. She remarked that some particular components in
these sections may be specific appropriation language, such
as "carry forward of program receipts." Sections 2 and 3
were the breakdowns of the funding sources. Section 2 was
funding sources by department and Section 3 was the total
of all funding sources for Section 1.
Ms. Rehfeld explained that Section 4 was the language
section of SB 19. She stated that the language section
included funding for various corporations: Alaska Aerospace
Corporation; Alaska Housing Finance Corporation (AHFC);
Alaska Permanent Fund Corporation; Alaska Industrial
Development and Export Authority (AIDEA); the state
catastrophic and working reserve funds; shared taxes under
the Department of Commerce, Community and Economic
Development (DCCED); and other various items.
Ms. Rehfeld stated that Section 13 was the particular
appropriation of $25 million for education, which was
addressed at a previous meeting. This appropriation was
specific funding that was targeted for energy costs in
school districts, but was allocated and distributed to
school districts on the adjusted average daily membership.
Ms. Rehfeld explained that Section 20 was known as the
"fuel trigger." This section was introduced some years
prior in an appropriation language, rather than building
ongoing costs into the base of agencies' budgets. The
preference was to include a fuel trigger at different
prices. The fuel trigger estimate going into FY 14 was at
$36 million; allocated twice a year. There was currently a
thorough analysis on individual departments' fuel and
utility costs, in order to determine if this particular
language should be changed.
Co-Chair Kelly wondered if the fuel trigger estimate was
$36 million. Ms. Rehfeld responded in the affirmative. She
looked at page 53 of the bill, which showed the allocation
based on $100 per barrel or more of $18 million that was
distributed twice a year. She furthered that the current
year had distributed approximately $7 million. The
departments were currently adjusting, and would provide
estimates at a later date.
9:11:44 AM
Ms. Rehfeld stated that Section 23 was the debt service
obligations. This included debt service and bond payments
for previously approved debt. One of the largest components
of this section was the School Debt Reimbursement program
on page 59, lines 17 through 21. The projection for FY 14
school debt reimbursement would be $128.263 million.
Section 24 was the federal and other program receipts
language. It was Legislative Budget and Audit (LB&A)
language that addressed federal receipts as it came to the
State and State agencies. Section 25 contained a number of
capitalizations for different funds, like disaster relief
and the replenishment of the revenue sharing program.
Section 26 outlined the fund transfers. The largest fund
transfer was the Public Education Fund transfer of $1.2
billion to forward fund education. Section 27 was specific
to the State retirement systems unfunded liability: $312.5
million for Public Employee Retirement System (PERS);
$316.8 million for the Teacher Retirement System (TRS); and
$4.5 million for the Judicial Retirement System. The
retirement system budget was roughly a $20 million over the
current year budget. Section 28 was language related to
salary and benefits for various bargaining unit agreements
in the University of Alaska. Currently, the general
government, supervisory, and confidential employees units
were under negotiations.
Co-Chair Kelly wondered if the benefits that were not up
for negotiation were ratified year by year. Ms. Rehfeld
replied that the language in the bill referred to all of
the bargaining agreements that were ratified by their
members, so the request continued those that were already
agreed upon.
Co-Chair Kelly wondered if the legislature had to approve
the benefits year by year. Ms. Rehfeld replied that the
legislature had to approve the benefits year by year.
Senator Hoffman looked at Section 27. He relayed that there
were new requirements that local governments declare their
liabilities for PERS and TRS. He wondered if Department of
Administration (DOA) had addressed this issue. Ms. Rehfeld
replied that it was a new requirement, and furthered that
the State had agreed to fund beyond the current cap of 22
percent for PERS and 12.56 percent for TRS. There was not a
final decision whether there would be a change to reflect
that increase in the State's financial statements.
9:16:46 AM
Senator Hoffman wondered if there was communication between
the municipalities and DOA regarding the possibility of
substantial liabilities on the municipalities. Ms. Rehfeld
replied that DOA had been in contact with the
municipalities about the issue, and how it would appear on
their financial statements. She shared that it was a
continuing conversation that DOA had been engaged in.
Ms. Rehfeld explained that Section 29 was for shared taxes
to local governments and other entities: the fisheries tax;
fuel tax; cost recovery; and cruise ship seven ports of
call. Section 32 was the budget reserve language, that
would allow a draw on the statutory budget reserve (SBR)
should the revenue be insufficient in FY 14 to cover the
projected expenditures. Sections 33 and 36 were the lapsing
provisions, retroactivity, and effective dates. She
remarked that the majority of SB 19 would take effect July
1, 2013 for FY 14.
Ms. Rehfeld restated that the FY 14 Operating Budget
included full-funding and forward-funding for K-12
education; Medicaid and other formula programs; Permanent
Fund appropriations for dividend and inflation-proofing;
energy assistance; tourism marketing; and the bargaining
unit components that were a work in progress.
Co-Chair Kelly requested more information regarding the
catastrophic and the working reserves. Ms. Rehfeld replied
that there were two components. There was a reimbursable
services agreement to pay for working reserve, which was
terminal leave or leave cash-in for employees. The working
reserve included a payroll deduction that was built into
the rates and the budget positions; and a reimbursable
services agreement. There was language in the appropriation
bill that would allow funds to "sweep" into working reserve
and the state catastrophic reserve.
9:21:23 AM
Co-Chair Kelly requested further information regarding the
impact of the operating budget for years out to 2020, from
the FY 08, FY 09, and FY 10. Ms. Rehfeld agreed to provide
that information.
Senator Dunleavy wondered if there was a process to
determine how much State money was needed to support the
$2.7 billion in federal receipts. He specifically queried
whether it was in addition to the budget, or if it was
written into the budget. Ms. Rehfeld replied that there
were specific match requirements and maintenance
requirements for many capital requests. The federal funds
were often matched with the State contributions. She
offered to provide more detailed information at a later
date.
Senator Dunleavy wondered whether the federal funds were
linked to the State, or the States were linked to the
federal funds. Ms. Rehfeld responded that if the state had
participated in a federal program, the state agreed to
commit a certain amount of resources in order to receive
the federal dollars.
Senator Dunleavy remarked that many Alaskans felt that the
budget was growing, but revenue was not keeping up with the
budget. He wondered if there was a discussion regarding
possible statutes or regulations that would reduce the cost
of government. Ms. Rehfeld replied that there were
conversations each year that focused on the current
priorities that were already written in statute.
SB 19 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 18
"An Act making appropriations, including capital
appropriations and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
9:26:41 AM
Ms. Rehfeld discussed "Senate Bill 18/House Bill 64;
Department UGF/DGF/Other/Fed Summary - Capital Budget"
(copy on file). She shared that the summary included the
mental health capital items. The mental health portion of
the bill totaled $14.50 million; of that, $12.650 million
were general funds. The total proposed Capital Budget for
FY 14 was $1.838 billion. The UGF request was $795.237
million at roughly 44 percent; DGF was $74.617 million at
roughly 4 percent; other funds were $56.580 million at
roughly 3 percent; federal funds were $911.948 million at
49 percent of the total requested budget. The DGF included
the Renewable Energy Grant Funds and the Regional Education
Attendance Area Fund. Other funds included the
International Airport and statutory designated receipts.
Co-Chair Meyer noted that the bulk of the federal funds
were used for transportation. Ms. Rehfeld agreed.
Co-Chair Meyer stressed that the federal dollars were
"driving" much of our transportation programs. Ms. Rehfeld
replied that some of the other funds that were leveraged
were the request for the municipal water and sewer and
projects.
Co-Chair Meyer wondered if the federal funding for the
roads had been decreasing in recent years. Ms. Rehfeld
replied that there had been a continuation of a
considerable amount of federal funding. She explained that
Department of Transportation and Public Facilities (DOT/PF)
could provide a more detailed response.
9:30:46 AM
Ms. Rehfeld stated that Sections 1 through 3 of SB 18 were
the numbers sections. In the capital budget, Section 1 was
organized by department; and the projects were listed in
priority within each agency with the deferred maintenance
request at the end. The only exception was DOT/PH, because
their requests were listed in a program area with the
requests listed in alphabetical order. She stated that the
detail budget books contained listings of the projects in
order by reference numbers. She explained that Section 2
was the funding sources for the appropriations for Section
1 by department. Section 3 was the total summary of the
funding sources for Section 1.
Ms. Rehfeld stated that Section 4 was the federal and other
program receipt language for the LB&A provisions. Section 5
was for fund capitalizations, including the General
Obligation (GO) bond language. Section 6 was a fund
transfer section, which included the $25 million from the
general fund (GF) into the Energy Grant Fund. Section 7
regarded insurance claims. If there was a settlement for an
insurance claim, it could be used for the Catastrophic
Reserve Risk Management account. Section 8 was the National
Petroleum Reserve Alaska (NPRA) Grants estimated to be
$3.945 million in FY 14. These funds came from the sale,
rental, bonus, or royalties on leases issued within the
NPRA. The funds would be available for appropriation for
communities that were directly impacted by the leases. The
annual grant application process was prepared by DCCED.
Ms. Rehfeld stated that Section 9 was a reappropriation of
$1.750 million from the Akiak Rural Power System Upgrade.
This upgrade was completed for approximately $4.5 million,
and a portion of that was federal funding from the Denali
Commission. There was a balance in the project that was
requested for reappropriation to a rural power system
upgrade in Atmautlauk. Section 10 was a reappropriation of
balances in Department of Environmental Conservation (DEC)
for the engineering and management of municipal water and
sew projects. Section 11 was a reappropriation of
approximately $2 million from the Kodiak Near Island
facility in the Department of Fish and Game (DFG) to be
redirected to DFG's hunting and fishing licensing system.
Ms. Rehfeld shared that Section 12 were the lapse
provisions for the various sections, mostly related to
capital lapse provisions for reappropriations and fund
transfers. Section 13 declared that the reappropriations
would be effective June 30, 2013. Section 14 was the
effective date of July 1, 2013 for the FY 14 capital
budget.
Ms. Rehfeld highlighted some specific funding sources. She
stated that OMB proposed to spend $120.2 million from the
Alaska Housing Capital Corporation Fund, which was set up
in 2006 with a $300 million appropriation. Since that time,
there had been other appropriations into that fund and
interest had been earned. She stressed that there were
needed investments in order to grow the economy. The $95.2
million request for the Susitna Watana project and the $25
million Alaska Gasline Development Corporation, totaling
$120.2 million.
9:38:54 AM
Ms. Rehfeld shared that $20.745 million out of AIDEA
dividends that were proposed to fund 3 Roads to Resources
programs and one other: $8.5 million for Ambler; $7.5
million for the Dalton Highway; $2 million for a smaller
program; and $2.745 for the strategic minerals assessment.
Senator Hoffman wondered if there was a location within the
budget for the Roads to Resources projects. Ms. Rehfeld
replied that Ambler and Dalton Highway were specifically
written in the budget, and the $2 million for the smaller
program would be outlined by DOT/PF.
Ms. Rehfeld stated that the Alaska Housing Finance
Corporation (AHFC) dividends were currently lower than
three years prior. In the current budget proposal, $10.6
million in AHFC dividends was directed completely to their
debt service.
Ms. Rehfeld pointed out that there was no request for using
the Alaska Capital Income Fund that had a balance of
approximately $76 million
Ms. Rehfeld summarized the projects in the proposed budget:
Susitna Watana project; weatherization and home energy
rebates and renewable energy; the infrastructure, highways,
aviations, and village safe water; the Nightmute School and
the Kwigillingok school deferred maintenance.
Co-Chair Meyer wondered if the last two schools' requests
mentioned were a result of the Kaysulie lawsuit. Ms.
Rehfeld responded that Nightmute was the next school that
was on the "Kaysulie List" for funding in FY 14, and was a
$33 million project. It was funded in 2012, but the funds
were not available to complete the project. The next school
on the "Kaysulie List" was Kwethluck, which would be
addressed in the FY 15 budget.
9:43:19 AM
Co-Chair Meyer wondered if the State Library and Museums
Project (SLAM) was complete. Ms. Rehfeld replied that the
previous request of $20 million for SLAM would not complete
the project, because $50 million was required to complete
SLAM. She stressed that the governor supported SLAM.
Co-Chair Meyer noted that there were many projects that
were in-progress. He stressed the need to focus on
completing projects. He wondered why the Engineering
Buildings for the University of Alaska Anchorage (UAA) and
University of Alaska Fairbanks (UAF) were not included in
the list of requests. Ms. Rehfeld that OMB was supportive
of the Engineering Buildings project, but there was
imperative work that was required for existing University
of Alaska buildings.
Senator Hoffman expressed gratitude for the addition of $50
million for the weatherization and home energy rebate
programs. He wondered if there was a conversation regarding
the mobilization of the workforce to implement the rebate
programs. Ms. Rehfeld responded that there was discussion
regarding the success of the programs. She understood that
there was currently more demand that what workers were able
to accomplish.
SB 18 was HEARD and HELD in committee for further
consideration.
9:47:46 AM
AT EASE
9:48:36 AM
RECONVENED
Co-Chair Kelly discussed the week's agenda, and
housekeeping.
ADJOURNMENT
9:50:08 AM
The meeting was adjourned at 9:50 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| FY2014 Governor Capital Budget Department Summary 1 29 2013.pdf |
SFIN 1/29/2013 9:00:00 AM |
SB 18 |
| FY2014 Operating Budget - Summary by Department 01 29 2013.pdf |
SFIN 1/29/2013 9:00:00 AM |
SB 19 |
| 2 6 13_Sen Kelly Sen Meyer- State Match and Maintenance of Effort Requirements for Federal Funds.pdf |
SFIN 1/29/2013 9:00:00 AM |
SB 19 |