Legislature(2013 - 2014)SENATE FINANCE 532
02/06/2014 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB111 | |
| SB155 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 155 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 111 | ||
SENATE FINANCE COMMITTEE
February 6, 2014
9:06 a.m.
9:06:42 AM
CALL TO ORDER
Co-Chair Meyer called the Senate Finance Committee meeting
to order at 9:06 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
Tim Lamkin, Staff, Senator Gary Stevens; Karen Rehfeld,
Director, Office of Management and Budget, Office of the
Governor; Jeanmarie Davis, Director, Division of Support
Services, Department of Natural Resources; Sana Efird,
Assistant Commissioner, Department of Health and Social
Services.
PRESENT VIA TELECONFERENCE
Rachel Etcher, Petersburg School District; Rick Dormer,
Principal, Petersburg School District; Gene Stone,
Assistant Superintendent, Mat-Su School District; Steve
Atwater, Superintendent Kenai Peninsula, Soldotna; Mike
Coons, Self, Palmer.
SUMMARY
SB 111 REPEAL SECONDARY SCHOOL EXIT EXAM
SB 111 was HEARD and HELD in committee for
further consideration.
SB 155 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS
SB 155 was HEARD and HELD in committee for
further consideration.
SENATE BILL NO. 111
"An Act repealing the secondary student
competency examination and related requirements;
and providing for an effective date."
9:07:03 AM
Co-Chair Meyer continued public testimony for SB 111.
RACHEL ETCHER, PETERSBURG SCHOOL DISTRICT (via
teleconference), testified in favor of the legislation. She
stated that much of her school's staff time was spent
preparing for the six days of testing required for the
secondary student competency examination. She stated that
the competency tests disrupted teaching routines and
limited teaching time. She stressed that collecting,
accounting for, and shipping the tests consumed valuable
staff time. She felt that greater student needs could be
served during the time-consuming test days. She stated that
a number of students had not been able to display their
abilities and potential with the tests, due to anxiety
related to the high stakes of the exam.
RICK DORMER, PRINCIPAL, PETERSBURG SCHOOL DISTRICT (via
teleconference), spoke in favor of eliminating the
secondary student competency examination and the related
requirements. He stated that the test was not an adequate
representation of students' skills. He explained that two
of the district's students failed the test by one point,
which prevented them from earning a diploma. He informed
the committee that some students were dropping out of high
school as early as 15 and 16 years old because of the
required exam.
9:10:54 AM
GENE STONE, MAT-SU, ASSISTANT SUPERINTENDENT MAT-SU SCHOOL
DISTRICT (via teleconference), spoke in support of the
legislation. He stated that students suffered
disproportionate consequences for failing the high school
qualifying exam. His school district supported alternative
assessment such as the Scholastic Assessment Test (SAT),
the American College Test (ACT), Armed Services Vocational
Aptitude Battery (ASVAB) or WorkKeys exams that could
provide institutions and employers with a clear picture of
a student's readiness for work, military, college or
vocational training.
9:12:48 AM
STEVE ATWATER, SUPERINTENDENT KENAI PENINSULA, SOLDOTNA
(via teleconference), spoke in favor of the legislation. He
strongly believed that the exam had outlived its intended
purpose. He pointed out that the exam's intention was to
provide a quality control for the school districts in
Alaska. He believed that the Kenai district had the
required quality control, making the exam unnecessary. He
added that greater than 95 percent of his district's
students passed the test, but the distraction and burden of
the test were unnecessary.
Co-Chair Meyer asked if Mr. Atwater knew of other available
methods to accurately measure a student's education. He
understood that the governor supported the use of SAT, ACT
or WorkKeys as tools for evaluation.
Mr. Atwater agreed with the governor's proposal of using
the SAT and ACT tests to determine competency. He also
believed that the school districts possessed an adequate
amount of quality control. He wished to see an end of
course exam administered by each district.
9:14:50 AM
Vice-chair Fairclough asked about the historical graduation
rates following implementation of the qualifying exam. She
noted a reported increase in graduation rates following the
implementation of the qualifying exam. She highlighted that
the state saw a graduation rate of 62.9 percent increase to
71.7 percent in 2013.
Mr. Atwater replied that the initial impact of the exam was
positive, and the increase in graduation rates was
attributable to the accountability brought forth by No
Child Left Behind.
9:17:31 AM
AT EASE
9:19:18 AM
RECONVENED
MIKE COONS, SELF, PALMER (via teleconference) testified in
favor of the legislation. He called attention to the change
found on the last page of the bill, lines 25-29. He stated
that the change impacted young adults. He hoped that the
exam could transition out of use with minimal impact on the
students. He stated that a poor transition was limiting for
Alaska's students. He spoke against HB 278, section 2,
which also impacted the legislation.
9:23:23 AM
Co-Chair Meyer CLOSED public testimony.
Co-Chair Meyer stated that the governor's education omnibus
bill contained similar intent. He intended to bring the
bill back to committee when the omnibus bill was heard.
9:24:21 AM
Senator Dunleavy pointed out that the bill addressed issues
other than the high school qualifying exam. He noted items
regarding parental inputs, and system reporting included in
the bill. He opined that the bill resulted from SB 36,
legislation that was proposed more than one decade ago. He
advocated for agency testimony prior to merging SB 111 with
the governor's omnibus legislation. He recommended
retaining those tools proven to assist education
evaluations.
9:25:25 AM
Co-Chair Meyer discussed the fiscal note, which provided a
credit.
TIM LAMKIN, STAFF, SENATOR GARY STEVENS, spoke to the
concern about transition language. He clarified that the
2017 phase-out provided an opportunity for students who
failed the exam to take it again. The language was
consistent with the governor's bill.
9:27:01 AM
Vice-chair Fairclough asked if the state had a support
contract to implement the legislation on an annual basis.
Mr. Lamkin replied that he was not acquainted with the
details of the contract.
SB 111 was HEARD and HELD in committee for further
consideration.
9:27:38 AM
AT EASE
SENATE BILL NO. 155
"An Act making supplemental appropriations, capital
appropriations, and other appropriations; amending
appropriations; repealing appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
9:30:40 AM
RECONVENED
KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, introduced herself. She wished to
provide an overview of the supplemental request. She noted
the presence of department representatives in the committee
room. The supplemental requests were not anticipated when
the budgets passed last spring. The total supplemental
request was $53,370,100. She referred to the summary
document (copy on file), the accompanying 8-page
spreadsheet (copy on file) and the back-up material
detailing each request by bill section (copy on file). She
noted that less than $1 million of the request was for
state agency operations. Approximately $48 million of the
request was related to two items; fire suppression and
disaster relief. Approximately $2 million existed in
settlements that were negotiated throughout the year along
with $2.4 million for emergency repairs not covered by
disaster relief funds.
9:32:57 AM
She introduced the spreadsheet: "FY2014 Supplemental Bill"
(copy on file).
Ms. Rehfeld discussed Line 1 on page 1 of 8. The item
addressed the Office of Public Advocacy in the Department
of Administration. The request was for $193 thousand in
general funds to address caseload capacity and appellant
backlog issues. She stated that the Office of Management
and Budget (OMB) had worked hard to avoid a supplemental
request for the Office of Public Advocacy and the Public
Defender Agency. Both agencies experienced significant
caseload increases, which created the backlog. She noted
that OMB was considering the item for a budget amendment.
Ms. Rehfeld continued with line 3 and a similar request
from the Public Defender Agency. The request was $650
thousand in general funds for caseload capacity and
appellant backlog.
Ms. Rehfeld moved to line 4, which addressed the Department
of Military and Veterans Affairs and the Alaska Military
Youth Academy. The requested $48 thousand of general funds
would enable a fund source change addressing the one-time
payment approved last year by the legislature.
9:34:58 AM
Ms. Rehfeld continued with line 5 of the spreadsheet. The
request was for the Department of Natural Resources and the
2014 fire suppression activity. The request would provide
general funds for expenditures incurred under the
Declaration of Disaster Emergency process for the fall 2013
fire season. Additional authorization for this purpose was
requested each year due to the unpredictable cost of each
fire season. She added that the Department of Natural
Resources worked closely with federal partners when
firefighting on Alaskan lands. The portions deemed state
responsibility were brought forward in the supplemental
bill. The request was for $22,769,400 in general funds.
9:35:44 AM
Co-Chair Meyer asked about the $22 million request. He
wondered how the particular fire was started. He recalled
concern that the military caused the fire and the federal
government ought to be billed.
Ms. Rehfeld responded that the supplemental request was a
reflection of several fires. She stated that the request
was based on the amount of federal funding available to pay
for the cost of the forest fires. The legislature received
letters from the administration reporting on the
expenditures to date. She offered to have the Department of
Natural Resources testify about the item.
9:37:05 AM
JEANMARIE DAVIS, DIRECTOR, DIVISION OF SUPPORT SERVICES,
DEPARTMENT OF NATURAL RESOURCES, responded that the fire in
question occurred primarily on federal land and did not
contribute to the supplemental request. She echoed Ms.
Rehfeld that the request included expenses from the entire
2014 fire season.
Co-Chair Meyer asked if the department was comfortable with
the amount of money contributed by the federal government.
Ms. Davis clarified that the state would not incur the
majority of expenses for that particular fire.
Co-Chair Meyer asked if the department was seeking further
funding from the federal government to pay for the fire.
Ms. Davis replied that the state was in the process of
exchanging bills with the federal government, but a
completion of the exchange would not alter the request of
$22 million.
Co-Chair Meyer asked how much additional money was sought
from the federal government for the fire in question.
Ms. Davis replied that the state sought $33 million in
reimbursement from the federal government for expenses
related to state resources utilized in fighting a fire on
federal land.
9:39:35 AM
Ms. Rehfeld continued with line 6. The request was from the
Department of Revenue and the Treasury Division. The
request was for $19 thousand in public school trust fund
receipts. She noted that investment management fees were
charged as a percent of the market value of invested assets
under management. She pointed out that OMB observed an
increase in the invested assets. She stated that page 2 of
the spreadsheet displayed two other funds under investment
management by the Treasury Division. She highlighted line 7
and a request for $7 thousand from the retiree health
insurance fund for the market value of their management
fees. She continued with line 8 and the $16 thousand
request related to investment management of the Power Cost
Equalization Endowment Fund.
Ms. Rehfeld stated that line 7 concluded the operating
number section of the supplemental bill. She shifted to the
capital component of the request.
9:40:51 AM
Ms. Rehfeld pointed out line 11 and the appropriation
request of $500 thousand to the Inter-Island Ferry
Authority. The funding was designed to assist the ferry in
providing daily service between Ketchikan and the Prince of
Wales Island. The funds were considered vital to continue
the transportation link.
Senator Dunleavy understood that the request was considered
a capital request, but he noted the history of legislative
contributions to the Inter-Island Ferry Authority. He
recalled the prior years' spending. He wondered about a
better plan to address the issue.
Ms. Rehfeld replied that OMB had communicated diligently
with the Inter-Island Ferry Authority to create methods of
assisting a more self-supporting system. She noted that the
ferry initially planned a northern route, but recently
released the route to reduce annual operating costs. She
stated that the request was in the capital section as it
was identified as a named recipient grant to the entity.
She was reluctant to recommend that the request be
identified as an annual ongoing appropriation. She
preferred an annual conversation about state support of the
effort. If the state was unable to support the ferry, the
Alaska Marine Highway would resume service to Prince of
Wales Island, which would increase complexity and state
expense.
Senator Dunleavy welcomed a discussion about the ferry
system.
9:44:29 AM
Co-Chair Meyer asked if state had a contract with the
Inter-Island Ferry Authority.
Ms. Rehfeld replied that the state did not have a contract
with the ferry authority. She noted that the Alaska Marine
Highway used to travel to the Prince of Wales. When the
ferry authority was formed in statute, they took over the
responsibility. The service was provided through federal
authorization and loans. The authority operated two
vessels. The state provided some level of general fund
support. The marine highway would resume service if the
authority were not able to provide the ferry. The state
expense would increase if the marine highway provided the
service.
Senator Olson asked about the inception of the Inter-Island
Ferry Authority and the state subsidy history.
Ms. Rehfeld replied that she could provide varied details.
She stated that a fairly significant request was
appropriated to help with debt service. She believed that
contributions varied between $300 thousand to $500
thousand.
Senator Olson voiced concern about the marine highway's
growing deficit.
9:47:14 AM
Co-Chair Meyer asked if both vessels were operating.
Ms. Rehfeld replied that the authority was operating only
one of the vessels. The second vessel was available in the
event that the operating vessel was in dry-dock.
9:47:38 AM
Senator Dunleavy asked how many people were taking the
ferry rather than flying. He pointed out that bridges were
also worthy capital projects, especially in the Interior
region of Alaska.
9:48:05 AM
Ms. Rehfeld continued on page 2, line 12 and the request
from the Department of Transportation and Public Facilities
for $2,408,100 for specific emergency repairs. She
mentioned the list of the projects that did not qualify for
disaster funds. The goal was to repair damaged areas due to
flooding and ice jams, which resulted in substantial damage
to public infrastructure. These projects are not eligible
for reimbursement from the Federal Highway Administration
or the Federal Emergency Management Agency. She noted that
a list of specific projects was provided in the back-up
notebooks.
9:48:54 AM
Ms. Rehfeld continued with page 3, which introduced the
language appropriations. She noted that line 16 referred to
bill section 6(a) and a request from the Department of
Environmental Conservation to reappropriate approximately
$3.4 million of funds. The language would reappropriate
balances from several smaller municipalities' water and
sewer projects that were completed under-budget, stalled or
cancelled. The unexpended and unobligated balances would be
reappropriated to the Village Safe Water and Wastewater
Infrastructure Projects.
Ms. Rehfeld moved to line 17 of the spreadsheet and section
6(b) of the bill from the Department of Environmental
Conservation. The department requested a scope change for
rood replacement at the Tower Road Tank in Haines.
Ms. Rehfeld continued with line 18 and a reappropriation
for the Department of Health and Social Services of
approximately $81 thousand for Eligibility Information
System Replacement.
Ms. Rehfeld discussed line 19 and the request form the
Department of Law. She stated that the funding would
provide for a section of judgments and settlements for
$1,570,200. She pointed out the list of the four settlement
items located in the back-up. She noted line 20 and the
language approved in the past to address additional
judgments arising in the current fiscal year.
9:51:18 AM
Ms. Rehfeld moved on to page 4, line 21. The request was
from the Department of Military and Veterans Affairs for a
reappropriation of approximately $350 thousand for Alcantra
Facilities Projects and covered storage.
Ms. Rehfeld noted a second request from the Department of
Military and Veterans Affairs for an estimate of
approximately $195 thousand to be used at Eielson Air Force
Base for covered storage.
9:51:54 AM
Ms. Rehfeld continued with line 23 and another Department
of Military and Veterans Affairs request for an arbitration
settlement of $111,300. The request was related to a
situation at the Alaska Military Youth Academy.
9:52:14 AM
Ms. Rehfeld moved to page 5, line 24. The request contained
a language section allowing the state to cover the cost of
potential spring wildland fires. The estimate was $5
million, which was similar to the amount included in the
supplemental bill last year.
9:53:00 AM
Vice-chair Fairclough referred to page 25 of the back-up
documents, which referred to the item discussed by Ms.
Rehfeld. She pointed out the separate supplemental request
for $22 million discussed earlier. She asked if the
spending ratio was common for the state as related to fire
suppression spending.
Ms. Rehfeld replied in the affirmative.
Ms. Rehfeld continued with line 25 of the spreadsheet and a
request from the Department of Transportation and Public
Facilities. She explained that the request was for a legal
settlement of $100 thousand and the associated legal fees
of $64 thousand. The settlement was related to clean-up at
the Old-Quinhagak Airport for a total request of $164,000.
9:53:53 AM
Co-Chair Meyer asked about the clean-up.
Ms. Rehfeld replied that a building required clean-up at
the airport due to the presence of hazardous materials. She
stated that litigation ensued and the result was the
judgment before the committee.
Senator Bishop stated that the hazardous materials were
found in a former snow removal equipment building.
9:54:48 AM
Co-Chair Meyer opined that the cost of the clean-up was
greater than he would have anticipated.
Senator Bishop pointed out that hazardous materials were
expensive to dispose of.
Ms. Rehfeld continued with line 26 and a request from the
Office of the Governor to amend the fuel allocation
percentage. The legislature inserted the fuel trigger
language several years ago, which helped all agencies
address fuel and utility costs rather than contributing a
base amount. The fuel trigger provided for necessary
adjustments. She noted past variances in allocations. The
University of Alaska displayed a shortfall. She recommended
an increase in the university's percentage to 15 percent of
the total, which would help to cover their costs.
9:56:21 AM
Ms. Rehfeld noted a proposed reduction in the fuel trigger
for the FY 15 budget. Additional analysis would determine
department impact. She stated that OMB would determine
whether the percentages required further adjustment.
Co-Chair Kelly asked if the FY 15 budget would reflect an
increase in the University's fuel allocation. He understood
that the committee could not anticipate a final decision
regarding the allocation when amendments were distributed.
Ms. Rehfeld responded in the affirmative. She did not
anticipate that the information would be available to the
committee by the 30th day.
Co-Chair Meyer asked if agencies other than the university
were experiencing shortfalls.
Ms. Rehfeld replied that the university had the bulk of the
requests for their statewide facilities. She added that the
largest piece of the fuel trigger was the Department of
Transportation and Public Facilities for equipment,
facilities and marine highway needs. She believed that
adjustments could be made to the Department of
Transportation and Public Facilities allocation. She stated
that OMB was relying on further analysis to make a final
determination.
9:58:48 AM
Senator Bishop asked for consideration of Fairbanks and
their electricity needs.
Ms. Rehfeld continued with Line 27 and Line 28 including
adjustments to debt service related to eligible federal
reimbursements for certain series of bonds issued. A fund
switch from federal to general fund was requested on line
27, while line 28 addressed the federal funding available
for reimbursement of the bonds.
10:00:17 AM
Ms. Rehfeld pointed to lines 29 and 30 with two pieces
related to the international airports and their revenue
bonds. She furthered that the international airport
reviewed service funds and construction accounts to adjust
for the maximum debt service cost.
Ms. Rehfeld discussed line 31 and a disaster relief funding
request in the form of a fund capitalization. The requested
amount was $19,961,500. She mentioned the process of
notification of the legislature with requests when
disasters occur. She pointed out that $5 million of capital
general funds were allocated for the purpose of disaster
relief.
10:01:35 AM
Ms. Rehfeld directed the committee's attention to line 32
and the request for language to address disaster relief
efforts that might occur in the spring of 2014.
10:02:23 AM
Ms. Rehfeld spoke to line 33 and a series of ratifications.
She stated that the ratifications were listed on the bottom
of page 7 of the spreadsheet extending through page 8. She
informed the committee that ratifications were zero-
balancing. The items were transactions that occurred in a
prior fiscal year. She pointed to a dollar amount
attributed to funds that were disallowed or unrecoverable.
She pointed to the list of ratifications and the
accompanying appropriation number with a 12 at the end,
indicating the fiscal year. She explained that line 42
addressed the ratification for the Department of Health and
Social Services for senior and disability services from FY
09. The ratifications were an assortment of transactions
that occurred in a prior fiscal year. In order for OMB to
zero-balance the terminated appropriations, they must seek
legislative approval for the ratifications.
10:03:46 AM
Ms. Rehfeld spoke to line 34 and a lapse of appropriations
for capital projects.
10:04:02 AM
Ms. Rehfeld noted that line 35 referenced the disaster
relief appropriation, which was placed in a fund. Line 36
encompassed the effective date of the bill, April 20, 2014.
10:04:29 AM
Vice-Chair Fairclough referenced tab 15, page 36 of the
back-up. She asked about the ratification for the
Department of Health and Social Services Medicaid shortfall
of $2,820,713. She read "based on projections, the
department anticipated realizing savings in personal care
and waivers, which were not realized." She requested
further explanation.
10:05:42 AM
SANA EFIRD, ASSISTANT COMMISSIONER, DEPARTMENT OF HEALTH
AND SOCIAL SERVICES, stated that the incident occurred
before her time with the department. She understood that
the department had anticipated savings from the waiver for
personal care services in the Medicaid program. The
department asked for a decrement because the projections
anticipated savings. Since the savings were not realized,
the request was made for ratification in this year's
supplemental request.
Co-Chair Meyer applauded OMB on their efforts in creating a
minimal supplemental request. He understood that the state
could not control natural disasters.
Vice-chair Fairclough clarified that her inquiry did not
have a negative intent. She realized that the department
did indeed realize a vast amount of savings with the
Medicaid services waivers.
Co-Chair Meyer stated that the committee questions were
purely for education of the members.
Ms. Rehfeld commented that the departments were doing a
fantastic job managing their budgets.
Senator Bishop commented about his time working with
Department of Labor and Workforce Development.
Co-Chair Meyer stated that committee business was
concluded. He announced that tomorrow's meeting was
cancelled.
SB 155 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:08:00 AM
The meeting was adjourned at 10:08 a.m.
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