Legislature(1995 - 1996)
04/12/1995 08:35 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE April 12, 1995 8:35 p.m. TAPES SFC-95, #29, Side 2 (532-end) SFC-95, #31, Side 1 (000-052) CALL TO ORDER Senator Steve Frank, Co-chairman, convened the meeting at approximately 8:35 p.m. PRESENT All committee members (Co-chairmen Frank and Halford and Senators Donley, Phillips, Rieger, Sharp, and Zharoff) were present. ALSO ATTENDING: Frank Rue, Commissioner, Dept. of Fish and Game; Annalee McConnell, Director, Office of Management and Budget; Nancy Slagle, Director of Budget Review, Office of Management and Budget; Former Senator Pat Pourchot, Legislative Liaison, Office of the Governor; Mike Greany, Director, Legislative Finance Division; fiscal analysts, Legislative Finance Division; budget analysts, Office of Management and Budget; numerous department representatives; and aides to committee members and other members of the legislature. SUMMARY INFORMATION HB 100 - APPROP: FY 96 OPERATING & LOAN BUDGET Subcommittee presentations were made for the following department budgets: Office of the Governor Dept. of Health and Social Services Court System Dept. of Transportation and Public Facilities Dept. of Fish and Game OFFICE OF THE GOVERNOR Co-chairman Frank directed attention to a handout (copy appended to these minutes as Attachment A). [More detailed subcommittee information on all budgets is on file in the original Senate Finance bill file for HB 100, available through the Legislative Finance Division.] The Co-chairman explained that the subcommittee philosophy was to return funding to FY 94 actual and spread the dollars in a manner as accommodating as possible. In light of FY 94 actual funding, the administration expressed concern that movement of the office of equal opportunity employment into the Governor's Office would not be taken into consideration. The subcommittee understood that but did not acknowledge it in setting a budgetary cap, feeling that funding for the office could be absorbed within the cap. Senator Donley voiced concern that the Governor's Office was sustaining a double cut under the subcommittee proposal, and he voiced a preference for funding proposed by the House. Co-chairman Halford MOVED for adoption of the subcommittee budget for the Office of the Governor for incorporation within HB 100. Co-chairman Frank called for a show of hands. The subcommittee recommendation was ADOPTED on a vote of 5 to 2. DEPT. OF HEALTH AND SOCIAL SERVICES Co-chairman Halford directed attention to a handout (Attachment B) and noted that the budget for the Dept. of Health and Social Services was particularly driven by Medicaid increases. The cap represented a reduction of $32 million from the Governor's proposal. The subcommittee budget "only missed it by $17,446.2" in effecting a net reduction of $15,515.0. The end result is that "We didn't go any further down the Medicaid list," but funding maintains existing levels of service. The subcommittee budget provides flexibility to do the job within available dollars. While the Governor's Office would have liked to pick up Medicaid options that were dropped in the past, the subcommittee merely avoided going further down the list. Senator Zharoff inquired regarding reduction of Medicare services, particularly for the elderly. Co-chairman Halford explained that Medicare operates on a list of one to thirty- one items. Positioning on the list is number ten. Items lower than that in priority have not been included in the proposed budget nor were they included in the budget for last year. The Governor proposed an increment to restore some of the services. That increment was not adopted. Existing services will continue under the proposed budget, but previously eliminated services will not be restored. Co-chairman Halford added that the subcommittee proposal "represents a substantial increase over last year's budget, although still maintaining a substantial decrease under what the Governor proposed." The Senate budget is approximately $2 million under the House number. Senator Sharp voiced his understanding that the subcommittee proposal is not a reduction but an increase of $17 million over last year and a $30 million increase over two years ago. The budget for the Dept. of Health and Social Services has grown more than any other, to meet massive needs. Co- chairman Halford added that the problem is that the Medicaid growth rate is approximately 20%. The subcommittee budget proposes to hold it at less than 11%. The commissioner has also voiced her intention that "this be a nonsupplemental budget." Senator Zharoff asked if all available federal dollars have been captured. Co-chairman Halford acknowledged that under the existing Medicaid program, the answer was "probably not." He said that states can add to Medicaid and AFDC and receive a one-to-one match. Given the fact that Congressional cuts are likely to be made, the state probably could not add. Co-chairman Halford MOVED for adoption of the subcommittee budget for the Dept. of Health and Social Services for incorporation within HB 100. OBJECTION was raised by Senator Zharoff. Co-chairman Frank called for a show of hands. The motion CARRIED on a vote of 5 to 2, and the subcommittee budget was ADOPTED. ALASKA COURT SYSTEM Co-chairman Halford distributed a handout (Attachment C) and advised that the Court System budget met its cap. The subcommittee attempted to minimize changes to meet the cap, particularly for trial courts which do not control their own case load and must respond. Maintaining funding for trial courts and appellate courts focused cuts in judicial conduct and the Alaska Judicial Council. While it is was not the desire to cut those areas, they are a much more optional function. The trial court budget is still a slight reduction. Senator Zharoff asked if the budget reflects the opening of the new building in Anchorage. Co-chairman Halford responded negatively. He acknowledged that an increase was requested for the building, but it would not fit under the cap. Senator Zharoff noted that when the building is ready for occupancy, someone will move in. He then asked if the committee would be faced with a supplemental request next session. Co-chairman Halford said that was not his intention. Co-chairman Halford further noted that trial courts respond to oil tax cases "that we pursue in order to generate revenue for the constitutional budget reserve account." Trial courts "came back with a recommendation, and we adopted it after I requested an analysis of what they thought was legitimate." In addition to the general fund, it takes $400.0 from the constitutional budget reserve for dealing with those cases. The legislature funds legal fees for those cases from the CBR. Senator Randy Phillips voiced his understanding that the building in Anchorage would not be completed until the fall of 1996. Co-chairman Halford advised that the Court System requested a $2 million increase for the facility. It would not fit under the cap. Senator Zharoff advised that he would be offering amendments relating to trial court funding. He further asked if use of the $400 from the CBR would necessitate a three-quarter vote. Co-chairman Frank responded affirmatively. Co- chairman Halford noted that in the subcommittee breakout, the $400.0 is shown under the new court building. However, the Court System has control over where it moves funding in trial courts. There remains a significant reduction in this area. Senator Rieger inquired concerning program receipts within the court system. Co-chairman Halford responded that they all go to the general fund. Senator Rieger suggested that users of the court system might be willing to fund some activities. Co-chairman Halford advised that the subcommittee proposal represents a 2% reduction from last year. He voiced his belief that the court system has "management ability to save a little bit of money." He acknowledged that because of mandates to deal with criminal cases, the waiting list in civil court becomes longer and longer. Questions arise regarding whether "We can push the number down slightly and maintain an adequate level of service within the size of that budget?" The subcommittee felt that could be done. There was not much flexibility under the cap. Co-chairman Halford MOVED for adoption of the subcommittee budget for the Alaska Court System for incorporation within HB 100. OBJECTION was raised. Co-chairman Frank called for a show of hands. The motion CARRIED on a vote of 5 to 2, and the budget was ADOPTED. DEPT. OF TRANSPORTATION AND PUBLIC FACILITIES Senator Rieger explained that the budget for the Dept. of Transportation and Public Facilities consists of two parts. One part is the recommendation of the subcommittee. At the time the subcommittee closed out, the chair was reconsidering the cap. The unallocated reduction number was thus left open. Senator Rieger said he would first explain the subcommittee recommendation per his handout (Attachment D) and then move to amend the budget for the unallocated reduction. The basic approach was to deny all general fund increments and transfer $200.0 in general funds from statewide engineering to statewide maintenance and operations to reflect the changing nature of DOTPF activities from less new construction to more maintenance. Program receipt increments were not denied, but changes in the proposed amendment would "take the DOT budget, inclusive of program receipts as if they were general funds, down to the FY 94 actual level. That number is $128,025.0. The handout (Attachment D) would be amended with two components: 1. An unallocated reduction of $1,384.9 to be spread at the discretion of the commissioner among all components of the department, except the marine highway system. 2. An unallocated reduction of $390.6 to the marine highway stabilization fund. Those percentage reductions are intended to be "exactly prorata to the amount of the cut and the size of their respective budgets." Senator Rieger next directed attention to two items of intent: 1. Requiring the allocation to statewide maintenance and operations, highways, and aviation to lapse into the general fund on August 31. 1996. 2. Asking that the department continue winter maintenance for the Klondike Road (Skagway- Whitehorse) and encouraging the Canadian government to increase support. Senator Rieger further attested to provisions in the front section of the budget relating to the Sitka Airport. He explained that the department is in negotiations to realize program receipts for continued operation since the City and Borough of Sitka has announced that it will terminate its lease. The provision will appropriate program receipts back to the department for necessary operations. Senator Zharoff inquired concerning the impact of the unallocated reductions and advised that he would be preparing amendments in an attempt to reinstate them. Senator Rieger MOVED for adoption of the subcommittee budget and intent for the Dept. of Transportation and Public Facilities. No objection having been raised, the subcommittee budget and intent were ADOPTED. Senator Rieger then MOVED for adoption of the amendment (See Amendment No. 15 within Attachment D) relating to the unallocated reductions. No objection having been raised, the AMENDMENT was ADOPTED. Senator Rieger MOVED for incorporation of the subcommittee budget, as amended, into HB 100. Senator Zharoff OBJECTED. Co-chairman Frank called for a show of hands. The motion CARRIED on a vote of 5 to 2, and the budget for the Dept. of Transportation and Public Facilities was incorporated within HB 100. DEPT. OF FISH AND GAME Senator Sharp directed attention to a handout (Attachment E) and explained that the subcommittee recommendation meets the cap which required a $5,321.4 reduction in general funds. Changes include: Commercial Fisheries Fisheries Projects - Commercial Fisheries was broken into two separate appropriations and allocations. Fisheries projects were approved at the full general fund request of $14,784.2. Regional and S.W. Admin.- The five regional commercial fisheries management programs were added together for proposed funding of $12,233.0. That funding was reduced by $1,789.5 for an adjusted total of $10,444.0 for this separate appropriation. Sport Fisheries - was increased by $200.0 for the Crystal Lake Hatchery per a recommendation from the administration. The administration recommended removal of the $200.0 from habitat. Wildlife Conservation - The $667.9 in general funds was deleted as proposed by the administration. Commissioner's Office - A miscellaneous unallocated reduction of $137.7 was taken. The House budget allocates the reduction to specific positions. That caused a problem for the department since one of the positions was critical to international treaty work. The Senate approach provides flexibility. Administrative Services - Reduced general funds $330.5 and replaced some of the reduction with interagency receipts. Board of Fish and Game - was held at the status quo, FY 95 level. Advisory Regional Boards - was held harmless at the FY 95 level. Subsistence - All general funds for subsistence were deleted. Approximately $900.0 in other funds remain. Habitat - was reduced by $711.2, and $200.0 was transferred to sport fisheries. Habitat Permitting - was held harmless at $1,511.3, the same level as FY 95. The total subcommittee recommendation for general fund expenditures is $30,366.9, a reduction of $5,321.4. Senator Sharp next advised that general fund program receipts for Commercial Fisheries, Sport Fisheries, Wildlife Conservation, Office of the Commissioner, Division of Administration, Subsistence, Habitat, and the Commercial Fisheries Entry Commission were held harmless from reductions and funded, per the administration's recommendation, at a total of $6,861.4. That is an increase of $1,032.2 over FY 95. Senator Sharp referenced the final page of his spreadsheet and explained that it presents a breakdown of the component for Wildlife Conservation, showing various project allocations. He further advised that he would be submitting an amendment to increase bison management from the Senate number of $163.8 to the $332.3 proposed by the administration. Total FY 95 funding for the Dept. of Fish and Game, from all sources, was $91,800.0. The proposed subcommittee budget for FY 96 totals $87,700.0; a net reduction of $4,100.0, approximately 4.5%. Senator Sharp reiterated that the FY 96 budget contains a different appropriation structure than the budget for FY 95. He referenced two components in Commercial Fisheries and four separate appropriations for Wildlife Conservation. Several areas have been combined into one under Administrative Support. Last year's budget contained an appropriation for Office of the Commissioner, Public Communication and Administrative Services. The subcommittee budget adds Boards of Fisheries and Game and Regional Council Advisory Commissions. Combination of these three is to provide greater flexibility in use of available funds. Habitat has been split into two appropriations to hold harmless Habitat Permitting. That was done deliberately to prevent retaliation for budget cuts. Co-chairman Halford noted a reduction of $3 million in other funds and asked what they consist of. Senator Sharp explained that they are fish and game funds. The total amount was not spent and remains in the fish and game fund for further appropriation this year or next year. Senator Sharp next MOVED for adoption of a proposed amendment (See Amendment No. 6 within Attachment E) which he explained would increase the Wildlife Conservation BRU for species management by $163.8 in fish and game funds to support a wood bison management and transplant program from Canada into Alaska. That would raise funding to the $332.3 requested by the administration. FRANK RUE, Commissioner, Dept. of Fish and Game, came before committee in response to a question from Senator Donley. The Commissioner explained that the program would transplant wood bison from Canada into Alaska where they were traditionally found. The department believes Alaska can support 4,000 to 5,000 bison in the Yukon Flats area. The bison were traditional in that area 400 to 500 years ago. Co-chairman Frank called for objections to the amendment. No objection having been raised, Amendment No. 6 was ADOPTED. Senator Zharoff noted that while the subcommittee budget presents an appearance of a 4% reduction, when one reviews general funds the reduction is approximately 13% in those areas. He voiced particular concern regarding Subsistence, Habitat, and Commercial Fisheries. Senator Sharp advised that while Commercial Fisheries contains 75% of the general funds in the department budget, the subcommittee effected only a 1.7% reduction for the BRU. End: SFC-95, #29, Side 2 Begin: SFC-95, #31, Side 1 Senator Sharp MOVED for adoption of the subcommittee report for the Dept. of Fish and Game for incorporation within HB 100. OBJECTION was voiced. Co-chairman Frank called for a show of hands. The motion CARRIED on a vote of 5 to 2, and the subcommittee budget was incorporated within HB 100. OPEN AREAS Co-chairman Frank noted that remaining budget areas open for committee discussion and action include: Amendments, Dept. of Labor, Formula Programs (Senior Citizens and Veterans' Tax Relief), Municipal Assistance, Revenue Sharing, ASMI, ATMC, AFDC, APA, and the Front Section. SPENDING PLAN Senator Zharoff inquired regarding availability of a spending plan detailing how the committee proposes to meet the FY 96 budget. Co-chairman Frank advised that it had not yet been discussed. He acknowledged "some open questions" regrading the source of some funding. ADJOURNMENT The meeting was adjourned at approximately 9:45 p.m.