Legislature(1999 - 2000)

04/14/1999 09:13 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE                                                                                                        
April 14, 1999                                                                                                                  
9:13 AM                                                                                                                         
SFC-99 # 90, Side A and Side B                                                                                                  
CALL TO ORDER                                                                                                                   
Co-Chair Sean Parnell convened the meeting at approximately                                                                     
9:13 AM.                                                                                                                        
Senator John Torgerson, Senator Sean Parnell, Senator Randy                                                                     
Phillips, Senator Dave Donley, Senator Loren Leman, Senator                                                                     
Gary Wilken, Senator Al Adams, Senator Pete Kelly and                                                                           
Senator Lyda Green.                                                                                                             
Also Attending:                                                                                                                 
MICHAEL NIZICH, Administrative Director, Division of                                                                            
Administrative Services, Office of the Governor; DAN                                                                            
SPENCER, Chief Budget Analyst, Office of Management and                                                                         
Budget, Office of the Governor; SHARON BARTON, Director,                                                                        
Division of Administrative Services, Department of                                                                              
Administration; JUANITA HENSLEY, Administrator, Division of                                                                     
Motor Vehicles, Department of Administration; DWAYNE                                                                            
PEEPLES, Director, Division of Administrative Services,                                                                         
Department of Corrections; KAREN REHFELD, Director,                                                                             
Education Support Services, Department of Education;                                                                            
BARBARA FRANK, Director, Division of Administrative                                                                             
Services, Department of Environmental Conservation; KEVIN                                                                       
BROOKS, Director, Division of Administrative Services,                                                                          
Department of Fish and Game; JANET CLARKE, Director,                                                                            
Division of Administrative Services, Department of Health                                                                       
and Social Services; REMOND HENDERSON, Director, Division                                                                       
of Administrative Services, Department of Labor; KATHRYN                                                                        
DAUGHHETEE, Director, Administrative Services Division,                                                                         
Department of Law; NICO BUS, Administrative Services                                                                            
Manager, Division of Support Services, Department of                                                                            
Military and Veteran's Affairs and Department of Natural                                                                        
Resources; KEN BISCHOFF, Director, Division of                                                                                  
Administrative Services, Department of Public Safety; JEFF                                                                      
JESSEE, Executive Director, Alaska Mental Health Trust                                                                          
Authority, Department of Revenue; NANCY SLAGLE, Director,                                                                       
Division of Administrative Services, Department of                                                                              
Transportation and Public Utilities; CHRIS CHRISTENSEN,                                                                         
Staff Council, Alaska Court System; GINGER BLAISDELL,                                                                           
Fiscal Analyst, Division of Legislative Finance.                                                                                
SUMMARY INFORMATION                                                                                                             
SB  30-OPERATING BUDGET APPROPRIATIONS                                                                                          
SB  31-MENTAL HEALTH APPROPRIATIONS                                                                                             
HB  50-OPERATING BUDGET APPROPRIATIONS                                                                                          
HB  51-MENTAL HEALTH APPROPRIATIONS                                                                                             
The full committee heard subcommittee closeout reports.                                                                         
SENATE BILL NO. 30                                                                                                              
"An Act making appropriations for the operating and                                                                             
loan program expenses of state government, for certain                                                                          
programs, and to capitalize funds; making                                                                                       
appropriations under art. IX, sec. 17(c), Constitution                                                                          
of the State of Alaska, from the constitutional budget                                                                          
reserve fund; and providing for an effective date."                                                                             
SENATE BILL NO. 31                                                                                                              
"An Act making appropriations for the operating and                                                                             
capital expenses of the state's integrated                                                                                      
comprehensive mental health program; and providing for                                                                          
an effective date."                                                                                                             
CS FOR HOUSE BILL NO. 50(FIN)(brf sup maj fld)                                                                                  
"An Act making appropriations for the operating and                                                                             
loan program expenses of state government, for certain                                                                          
programs, and to capitalize funds; and providing for                                                                            
an effective date."                                                                                                             
CS FOR HOUSE BILL NO. 51(FIN)                                                                                                   
"An Act making appropriations for the operating and                                                                             
capital expenses of the state's integrated                                                                                      
comprehensive mental health program; and providing for                                                                          
an effective date."                                                                                                             
Operating Budget Subcommittee Closeouts                                                                                         
Co-Chair Sean Parnell gave an overview of what the                                                                              
committee planned to do this meeting. The recommendations                                                                       
would not be adopted at this time. The committee would not                                                                      
enter a detailed discussion with any of the departments.                                                                        
Senator John Torgerson gave the subcommittee closeout for                                                                       
the DEPARTMENT OF FISH AND GAME. The members of the                                                                             
subcommittee included Senator Dave Donley, Senator Rick                                                                         
Halford, Senator Jerry Mackie, Senator Lyman Hoffman and                                                                        
himself as chair. They were directed to make a reduction of                                                                     
$1,315,400 from the FY99 budget.                                                                                                
The subcommittee began by extending the austerity measures                                                                      
that the Governor had put on the table to help alleviate                                                                        
the budget problems for FY99. That was a total of $623,000.                                                                     
The majority of that was taken from the fisheries                                                                               
management headquarters office, at the recommendation of                                                                        
the department. Part of the balance was taken from the                                                                          
Glacier Bay Defense project. The department did not need                                                                        
that money because of the recent lawsuit filed on the                                                                           
Beyond that, the subcommittee needed to reduce $767,000.                                                                        
The recommendation to the full committee was that the                                                                           
reductions be applied to the fisheries management                                                                               
headquarters office.                                                                                                            
An additional $383,000 in federal receipt authority was                                                                         
given with the understanding that the federal government                                                                        
was more than likely to contract with the State Of Alaska                                                                       
to continue doing work in high-impact federal areas for                                                                         
subsistence. If the state passed a subsistence                                                                                  
constitutional amendment the state would get an additional                                                                      
$11 million. If not, the federal government would get that                                                                      
money. If the federal government took over fisheries                                                                            
management, there would no need for the state to spend that                                                                     
The other $383,000 the subcommittee recommended through                                                                         
other legislation that the fees be increased for the                                                                            
commercial fisheries crew licenses.  The current resident                                                                       
cost was $30, and the recommended increase would be to $60.                                                                     
The nonresident fees would increase from $90 to $125. This                                                                      
increase would go into the fish and game fund.  The                                                                             
subcommittee then recommended giving the department                                                                             
additional program receipt authority to collect that money.                                                                     
He said this was one of the hardest budgets he had since                                                                        
the commercial fishing industry brought revenue into the                                                                        
state. The subcommittee felt these changes were the least                                                                       
impact on the department. It was reasonably certain that                                                                        
the department could collect those increased licensing                                                                          
funds so the impact would be negligible.                                                                                        
Senator Al Adams noted for the record that his silence on                                                                       
the reports was not a reflection of his agreement of the                                                                        
recommendations.  He needed a chance to review the                                                                              
information and would return to the committee with                                                                              
amendments.  He appreciated the cooperation given by the                                                                        
subcommittee chairs.                                                                                                            
Co-Chair John Torgerson noted that the overall budget of                                                                        
Department of Fish and Game actually did increase through                                                                       
the use of federal funds.  There was room for funds to be                                                                       
shifted to make up for some of the shortfalls.                                                                                  
He then presented the subcommittee report for the                                                                               
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES. The                                                                         
subcommittee consisted of himself as chair, Senator Jerry                                                                       
Mackie and Senator Lyman Hoffman. The mandate was a                                                                             
reduction of $2,290,000 from the Governor's request. In                                                                         
many cases, the subcommittee took the austerity measures                                                                        
proposed in the Governor's budget and extended those                                                                            
He broke the recommendations down by region.                                                                                    
The subcommittee recommended a reduction of $47.4 thousand                                                                      
to the commissioner's office budget. This was an austerity                                                                      
In the Central region, the snow hauling and street sweeping                                                                     
budget was reduced by $150,000; approximately 20 percent.                                                                       
The subcommittee recommended a fund shift transfer from                                                                         
general funds to 470 funds for the environmental monitoring                                                                     
of waste oils in the streets of Anchorage. The federal                                                                          
Environmental Protection Agency mandated this.  The fund                                                                        
transfer would require an amendment to another bill                                                                             
currently in committee, but he knew of no opposition to the                                                                     
Funding for the program that produced line striping on the                                                                      
road was transferred to use federal funds after discussion                                                                      
with the department. Because it was a safety item, it would                                                                     
qualify for the federal funding.                                                                                                
The subcommittee recommended the region surplus a back-up                                                                       
grader and a dump truck to realize a saving of $50,000.                                                                         
The department would be directed to examine maintenance                                                                         
stations and close one station to find $125,000 in savings.                                                                     
A small reduction of $11,000 was made to the funding for                                                                        
calcium chloride.                                                                                                               
They were given program receipt authority of $500,000 to                                                                        
reopen the Adak Airport, should the federal government                                                                          
decide to grant funds for that purpose.  The subcommittee                                                                       
also gave statutory receipt authority for late-night                                                                            
arriving airplanes when department employees were called                                                                        
In the Northern region, the subcommittee added $15,000 in                                                                       
an attempt to close the Harborview facility.  They                                                                              
suggested that a one-time capital budget appropriation of                                                                       
$150,000 be made to build a wall between the state-run                                                                          
portion and the Valdez Hospital. If that appropriation were                                                                     
not made, $235,000 would be required simply to maintain the                                                                     
The subcommittee took the austerity recommendation from the                                                                     
Governor's budget to not open certain roads in the region                                                                       
until after the snow naturally melted. Co-Chair John                                                                            
Torgerson noted the matter had been debated during                                                                              
discussions regarding the FY99 supplemental budget. This                                                                        
would result in a total saving of $316,000 for FY00. The                                                                        
subcommittee did give designated receipt authority of                                                                           
$150,000 for private parties who wished to have specific                                                                        
roads opened earlier. He understood that the Canadian                                                                           
government or the tourism industry might want to pay the                                                                        
The subcommittee suggested closure of parts of the Denali                                                                       
Highway for a maintenance period for a realized saving of                                                                       
$100,000. The road would receive the current amount of                                                                          
maintenance to the last residence along the road but the                                                                        
forty-miles of road that crossed the pass would be shut                                                                         
down permanently.                                                                                                               
A $60,000 transfer of funds would be made to cover paint                                                                        
There would be a closure of one maintenance station for                                                                         
saving of $125,000.                                                                                                             
The subcommittee recommended reductions to the Southeast                                                                        
Region to include reduction in janitorial service from the                                                                      
current five days a week to three days a week. This would                                                                       
result in $125,000 of savings. This is something that the                                                                       
Northern and Central regions had been doing.                                                                                    
Regarding the Marine Highway component, the subcommittee                                                                        
took the recommendations of the Governor to cut $180,000.                                                                       
This would remove the M/V Kennicott from two weeks of                                                                           
scheduled service and transferring it to the Bellingham                                                                         
route.  This would leave the M/V Columbia in dry dock for                                                                       
the two additional weeks.  The service of the M/V Taku                                                                          
would be reduced by one week and would save $146,000.                                                                           
Funding for linens, aprons and blankets would be also                                                                           
reduced by $44,000. Finally, a $10,000 reduction was made                                                                       
to maintenance and repair items.                                                                                                
Senator Al Adams appreciated the report.  He requested that                                                                     
the subcommittee chairs make note of any accompanying                                                                           
legislation and/or capital budget items that would go along                                                                     
with the changes proposed to the operating budget.                                                                              
BREAK 9:27 AM / 9:28 AM                                                                                                         
Senator Dave Donley gave the subcommittee report for the                                                                        
DEPARTMENT OF LAW.  Members of the subcommittee included                                                                        
The subcommittee had been requested to make an $800,000                                                                         
reduction based on the FY99 budget.  The subcommittee                                                                           
looked at changes made in the House of Representatives for                                                                      
The priorities the subcommittee wished to address were                                                                          
those that protected children and also the historical                                                                           
decline in the effectiveness of the Prosecutor's office                                                                         
vis-a-vis the budget increases to the public defenders                                                                          
Therefore, the subcommittee added one prosecutor and one                                                                        
paraprofessional position for the Smart Start program. In                                                                       
the Civil Division, the subcommittee made a general                                                                             
reduction of $125,000 with the intent that it applies                                                                           
across the board. General funds were reduced in the                                                                             
Environmental Law Section by $100,000                                                                                           
Most increments in the Governor's request were denied.                                                                          
However, the Fair Business Practices Section was increased                                                                      
with the addition of one attorney position.  The                                                                                
Governmental Affairs Section was reduced by $95,700. The                                                                        
Human Services Section was granted the requested $291,000                                                                       
for two additional attorneys. Also added, were the funds                                                                        
necessary to annualize the positions that were adopted the                                                                      
previous year.                                                                                                                  
The subcommittee recommended a reduction from the                                                                               
Governor's general fund request for the Mental Health Lands                                                                     
Section by $47,000.                                                                                                             
The subcommittee paralleled a House of Representatives'                                                                         
proposal to reduce the Governor's proposed general fund                                                                         
allocation for the Statehood Defense by $25,000.                                                                                
Most of the cuts occurred in the Oil and Gas Litigation                                                                         
Section.  The subcommittee utilized the same transfer                                                                           
formula proposed by the House to transfer $983,000 from the                                                                     
general fund to permanent fund corporate receipts. In the                                                                       
Oil and Gas Services Section, the subcommittee reduced the                                                                      
Governor's request by $80,000, which would delete one                                                                           
vacant position and one telephone line.                                                                                         
The subcommittee re-prioritized the department's budget to                                                                      
reemphasize criminal prosecution, protection of children                                                                        
and consumer protection.                                                                                                        
Co-Chair Sean Parnell noted the Department of Public Safety                                                                     
budget was separate from the original packet.                                                                                   
Senator Dave Donley gave the subcommittee report for                                                                            
DEPARTMENT OF PUBLIC SAFETY. The target was a cut of only                                                                       
$4,800 from FY99. While that may seem easy to do, he noted                                                                      
that the Governor had requested a $2 million increase and                                                                       
the Legislature had consistently increased the budget over                                                                      
the last five years.  The intent in past years had been to                                                                      
place new troopers in the field. The department was                                                                             
somewhat successful in doing this, but there had been                                                                           
unanticipated costs that affected the number of positions                                                                       
actually realized.  He pointed out that the costs were                                                                          
nobody's fault and could not have been budgeted.                                                                                
He compared the Governor's request for a $2 million                                                                             
increase and the House's grant of a $1 million increase.                                                                        
The subcommittee was directed to find a reduction.  He                                                                          
detailed those proposed reductions.                                                                                             
The subcommittee denied most all the increments requested                                                                       
except in the area of fire service training, which used                                                                         
statutory designated receipts of $37,800.                                                                                       
There was a small increment of $15,000 to create a new Fish                                                                     
and Game safeguard component that was granted.  Senator                                                                         
Dave Donley told the committee that was a very successful                                                                       
program that had been dropped out in the past. It was                                                                           
anticipated to save money in the long run.                                                                                      
Senator Dave Donley stated that the Trooper Detachments                                                                         
component could be the most problematic area because it was                                                                     
so dependent upon other support services throughout the                                                                         
budget. The subcommittee denied the increment because it                                                                        
was based on the number of troopers funded the prior year                                                                       
rather than the number actually placed.                                                                                         
The subcommittee recommended a change in funding sources                                                                        
for the Violent Crimes Compensation Board and for the                                                                           
Council on Domestic Violence. The board would be funded at                                                                      
a higher level and entirely from the prisoner's seized                                                                          
permanent fund dividend receipts. It was determined that                                                                        
was the best use for those funds. The council would get a                                                                       
substantial increase because the department attained                                                                            
additional federal funds.                                                                                                       
Some of those federal funds would be used for an added                                                                          
position in the crime lab for DNA testing.                                                                                      
There was a federal grant accepted for the Batterers                                                                            
Intervention Program. He mentioned that a controversy                                                                           
between the program and the council had been resolved.                                                                          
Using monies saved through the use of prisoner's PFDs for                                                                       
the council's budget, the subcommittee added a $100,000                                                                         
increment to fund Victim's for Justice.                                                                                         
The program would continue at a baseline to increase                                                                            
troopers in the field although not as much as proposed by                                                                       
the House.                                                                                                                      
Some of the problems with the crime lab were also addressed                                                                     
as well as victim's programs.                                                                                                   
Senator Loren Leman gave the subcommittee report for the                                                                        
DEPARTMENT OF REVENUE. He commended the department's                                                                            
He pointed out that the spreadsheet before members did not                                                                      
reflect the reduction goal because there were other                                                                             
technical changes needing to be made.                                                                                           
To reach the allocation of $11.35 million, the subcommittee                                                                     
made some fund shifts in CSED consistent with changes done                                                                      
in the FY99 supplemental budget. The salary for the 12-                                                                         
month position for the Welfare to Work program was reduced                                                                      
with the approval of the Mental Health Trust Authority.                                                                         
The subcommittee recommended that Oil and Gas Audit merge                                                                       
with Income and Excise Audit.  The department requested the                                                                     
merger be delayed to April 2000 rather than July 1999. The                                                                      
savings would be $400,000 for Oil and Gas Audit and                                                                             
$100,000 for Income and Excise Audit. The subcommittee was                                                                      
working on amendments to get $300,000 restored in the Oil                                                                       
and Gas Audit.                                                                                                                  
One area of remaining contention was the Permanent Fund                                                                         
Corporation.  The subcommittee recommended denying the                                                                          
increment request of $225,000 for a new staff person and                                                                        
recommended a decrease of $175,000 for office efficiencies.                                                                     
The department had come up with list of 29 things they                                                                          
could do to be more efficient.                                                                                                  
The subcommittee members were Senator Jerry Ward, Senator                                                                       
Al Adams and Senator Loren Leman.                                                                                               
He then gave the subcommittee report for the DEPARTMENT OF                                                                      
ENVIRONMENTAL CONSERVATION. The subcommittee was allocated                                                                      
$12.2 million general funds and proposed a budget using                                                                         
slightly over $11.3 million. He felt the proposal would                                                                         
allow both the department and the Legislature to accomplish                                                                     
their mission.                                                                                                                  
The department had requested over $2.4 million of                                                                               
increments for 15 new positions. The subcommittee's                                                                             
recommendation denied all new net positions and suggested                                                                       
reallocation of existing staff positions. The department                                                                        
could then prioritize and address programs.                                                                                     
In the Division of Environmental Health, the Food Safety                                                                        
and Sanitation was denied its request of $330,000 by the                                                                        
subcommittee. However, $1.47 million statutory program                                                                          
receipts were approved.  The result would mean an increase                                                                      
in fees to those businesses that got inspected.  The                                                                            
subcommittee would introduce legislation to allow for a                                                                         
local option for larger municipalities to take over the                                                                         
inspections and receive the fees.  He noted that Anchorage                                                                      
already did this.  The subcommittee and the department were                                                                     
working on a transition.                                                                                                        
The request for one position to distribute drinking water                                                                       
information for utilities across the state was denied.                                                                          
The subcommittee accepted federal fund receipts but denied                                                                      
matching funds and directed the department to find funds                                                                        
within for the Salmon Habitat Protection increment. Four                                                                        
additional staff positions were also denied.                                                                                    
The request for one new staff position for the National                                                                         
Pollutant Discharge Elimination System was denied and the                                                                       
subcommittee told them to use existing personnel.                                                                               
The subcommittee recommended approval of an increment for                                                                       
facility construction and operations for replacement of                                                                         
federal funds and increased loans audit servicing. This                                                                         
would be a contracted service.                                                                                                  
Because of the substantial success of Alaska's senior                                                                           
senator in Washington, DC to obtain federal funds for the                                                                       
Village Safe Water Program, the department was expecting an                                                                     
increase in funds. They requested four new engineer                                                                             
positions to manage the additional monies, which the                                                                            
subcommittee denied but did approve contractual services.                                                                       
Senator Loren Leman spoke of his experiences with the                                                                           
program, noting its success.                                                                                                    
The subcommittee recommended a reduction of $873,000 to the                                                                     
Spill Prevention Response Program by combining the Storage                                                                      
Tank Assistance Program and the Contaminated Sites Program                                                                      
and reducing 15 employees.  He said the programs would be                                                                       
in a phase-down mode anyway and the merger was appropriate,                                                                     
but the department felt this was too early.                                                                                     
Co-Chair Sean Parnell noted Senator Gary Wilken was the                                                                         
chair of the Department of Education subcommittee, but that                                                                     
the foundation formula was to be considered by the full                                                                         
committee. The Longevity Bonus Program was also held out                                                                        
for consideration.                                                                                                              
Senator Gary Wilken gave the subcommittee report for the                                                                        
DEPARTMENT OF ADMINISTRATION. The subcommittee members were                                                                     
himself, Senator Lyda Green and Senator Kim Elton. He                                                                           
listed the significant changes in order of their BRU.                                                                           
The subcommittee recommended a $310,000 reduction for                                                                           
electronic efficiencies in the Division of Finance as a                                                                         
challenge accepted by the department.                                                                                           
At the department's recommendation, a $916,000 decrement in                                                                     
the Leases program was suggested. The subcommittee also                                                                         
challenged the department to find $1.25 million in                                                                              
additional leasing revenues.                                                                                                    
Public Broadcasting Television was reduced by $51,200 but                                                                       
would not affect the ability to keep the stations on the                                                                        
air or to maintain federal funds.  A new component called                                                                       
Satellite Infrastructure (ARCS) would keep public TV on the                                                                     
air. A $444,000 protection insurance policy would no longer                                                                     
be funded due to increase in the technology in fiber                                                                            
optics.  Any outages would be in the middle of the night.                                                                       
The subcommittee directed the department to go to the                                                                           
University of Alaska-Alaska Three to obtain funding to                                                                          
increase distance delivery.  An appropriation of $63,000                                                                        
was added for the Aries Grant, which was the reading radio                                                                      
The subcommittee recognized the Administration's                                                                                
recommended increase of $2.364 million for the Pioneer                                                                          
Homes. This would add 50-60 additional caregivers and apply                                                                     
across the budget.                                                                                                              
Senator Gary Wilken pointed out $636,000 in reductions                                                                          
across the department.                                                                                                          
The subcommittee recommended funding an $150,000 increment                                                                      
for general relief grants.                                                                                                      
Funding for the Citizens Foster Care Review Panel was                                                                           
eliminated ($296,000.) The intent was to either fully fund                                                                      
the program to make it operable or shelve it until a future                                                                     
time when it could be properly funded.                                                                                          
The Public Defenders Agency and the Office of Public                                                                            
Advocacy were funded at the FY99 level not including the                                                                        
supplemental request.  This was causing concern at the                                                                          
subcommittee level as well as the user level. He would work                                                                     
with the Public Defender Agency to reconcile the                                                                                
differences of opinions. He felt the matter would have to                                                                       
be addressed in the future to establish an adequate level                                                                       
of funding.                                                                                                                     
The subcommittee recommended accepting the $238.000 request                                                                     
for the Alaska Oil and Gas Conservation Commission.                                                                             
The Alaska Public Offices Commission was reduced by                                                                             
The subcommittee recommended collapsing four components of                                                                      
the Division of Motor Vehicles into one and implementing a                                                                      
four-percent cost effectiveness reduction of $350,000.                                                                          
Senator Gary Wilken then gave the DEPARTMENT OF EDUCATION                                                                       
(except the K-12 formula) report. Subcommittee members were                                                                     
Senator Randy Phillips, Senator Kim Elton and Senator Gary                                                                      
The subcommittee reduced the $1.5 million Governor's                                                                            
request for the Teaching and Learning Support to $1.096                                                                         
million. Senator Gary Wilken wanted to make sure that the                                                                       
Legislature supported the Administration and the Department                                                                     
of Education's efforts to do the Exit Exams. These funds                                                                        
would be used with those granted the prior year to ensure                                                                       
that the test is as good as possible when it was                                                                                
administered to high school students.                                                                                           
Belt tightening proposals were spread across the budget.                                                                        
A 15-percent department wide travel reduction was                                                                               
The subcommittee recognized the Governor's request for an                                                                       
increase of $250,000 increase for the District Support                                                                          
Services. This was a result of encouragement of the                                                                             
department to audit school district financial statements                                                                        
for the future adequacy study.                                                                                                  
State support was eliminated for the Kotzebue Technical                                                                         
Center. The subcommittee encouraged the University of                                                                           
Alaska, the industry and the City of Kotzebue to keep the                                                                       
center open.                                                                                                                    
Alaska Vocational Technical Center would have a change in                                                                       
funding authority in the amount of $770,000 from general                                                                        
fund to statutory designated receipts.  Authority was given                                                                     
to raise their tuition. Senator Gary Wilken analyzed that                                                                       
the center had considerable overhead and could reduce its                                                                       
costs to realize more from its operation and tuition.                                                                           
An increment of $150,000 was added to the Mt. Edgecumbe                                                                         
School for increased janitorial service.                                                                                        
The subcommittee recommended rejection of an $190,000                                                                           
increment for the Vocational Rehabilitation program.                                                                            
The subcommittee recognized an increment request of                                                                             
$100,000 for Alaska Libraries and Museums for library                                                                           
materials. A general reduction of $71,000 was made to                                                                           
Library Grants.                                                                                                                 
Under the Alaska Postsecondary Education Commission, the                                                                        
contract fees to WAMMI were reduced by $150,000. That was                                                                       
not expected to affect the tuition support for FY02, 03 and                                                                     
04, but would require the program to reassess the contract                                                                      
relationship between the University of Washington and the                                                                       
State Of Alaska.                                                                                                                
Senator Gary Wilken gave the ALASKA COURT SYSTEM                                                                                
subcommittee report. Senator Drue Pearce, Senator Dave                                                                          
Donley, Senator Robin Taylor Senator Al Adams and Senator                                                                       
Gary Wilken were members.  The department was funded at                                                                         
FY99 level across the board with no increases.                                                                                  
Senator Pete Kelly gave DEPARTMENT OF COMMUNITY AND                                                                             
REGIONAL AFFAIRS subcommittee report. The subcommittee was                                                                      
able to meet the budget objective and address childcare                                                                         
programs and the rebate program, which was eliminated.                                                                          
A $200,000 general fund increase, $800,000 in tobacco                                                                           
settlement funds plus federal receipts transferred from the                                                                     
Department of Health and Social Services for childcare was                                                                      
denied in the subcommittee recommendation. The subcommittee                                                                     
discovered there was a quality portion of the childcare                                                                         
grant that needed to be replaced. That would be done in                                                                         
full committee and use inter-agency receipts to have no                                                                         
impact on general funds.                                                                                                        
The subcommittee denied the Governor's request for a                                                                            
Headstart program increment. However, the subcommittee                                                                          
recommended funding Headstart at $100,000 more than in                                                                          
The subcommittee rejected the $25,000 general fund match                                                                        
for a Bio-energy Grant for the Division of Energy. This                                                                         
would result in a loss of $34,000 in federal funds.  There                                                                      
had not been many results from the Alternative Energy                                                                           
Program in resolving power problems in rural Alaska so the                                                                      
subcommittee recommended eliminating the project                                                                                
The subcommittee initially did not recommend funding the                                                                        
RUBA grant portion of the Division of Municipal and                                                                             
Regional Assistance, which would result in the loss of                                                                          
federal funds as well. In talking to the department, other                                                                      
funds were found that could fund the state match and thus                                                                       
capture the federal funds. He would propose an amendment to                                                                     
make that change.                                                                                                               
Tape: SFC - 99 #90, Side B                                                                                                      
Senator Pete Kelly continued saying the subcommittee                                                                            
increased funding for the Headstart program by $100,000.                                                                        
The subcommittee also accepted the Governor's proposed $2                                                                       
million increase for Daycare Assistance.                                                                                        
Co-Chair Sean Parnell noted that he had asked the                                                                               
subcommittee to not address the Municipal Assistance                                                                            
Revenue Sharing portion of the department's budget.                                                                             
Senator Pete Kelly pointed out the subcommittee's                                                                               
recommended budget was a decrease of $4,200,000 from the                                                                        
Governor's proposed budget.                                                                                                     
The DEPARTMENT OF HEALTH AND SOCIAL SERVICES subcommittee                                                                       
report would not be closed out until the afternoon. Senator                                                                     
Pete Kelly gave a brief status report.                                                                                          
The subcommittee was directed to limit the increase of                                                                          
funds to $11 million from FY99. Not including the formula                                                                       
portion, the recommended budget actually showed a $1.4                                                                          
million reduction.                                                                                                              
There was a projected increase of $12,791 in the Governor's                                                                     
budget for Medicaid. The subcommittee denied that increment                                                                     
and took out a general fund portion of $4 million. He                                                                           
discussed the discrepancies of the Legislature and the                                                                          
Administration in Medicaid projections.                                                                                         
Alcohol and Drug Abuse administration would have a                                                                              
reduction of $841,000 from the Governor's request. The                                                                          
department received an increase in federal funds that would                                                                     
allow for a 20-percent growth even with the state cuts. The                                                                     
subcommittee would address the matter of maintaining an                                                                         
adequate match to capture the federal funds.                                                                                    
The subcommittee recommended funding the Governor's request                                                                     
for Adult Public Assistance at $2 million over the FY99                                                                         
Full funding was also recommended for the Denali Kid Care                                                                       
Program. The foster care component was funded with                                                                              
$19,280,00 over the FY99 budget. The funded projects                                                                            
exceeded the Governor's proposed level.                                                                                         
The subcommittee recommended funding the annualized cost of                                                                     
the 28 social workers addressed the prior year.                                                                                 
There was still some problems with CAMA that should be                                                                          
resolved in the afternoon's subcommittee meeting.                                                                               
He would provide the full committee a more detailed report                                                                      
after the subcommittee finished its closeout.                                                                                   
Senator Lyda Green gave her subcommittee report for the                                                                         
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT.                                                                                
The Tourism Development and the Alaska Tourism Marketing                                                                        
Council were removed from consideration as the issues were                                                                      
being addressed in separate legislation.                                                                                        
The department recommended a cost allocation plan, which                                                                        
the subcommittee accepted. They requested $134,800 general                                                                      
fund reductions, but the subcommittee reduced that by                                                                           
The statutory required foreign trade development locals in                                                                      
Japan and Korea were reduced by $80,000 by the                                                                                  
The subcommittee recommended eliminating two specialist                                                                         
positions in the Division of Trade and Development. One was                                                                     
for mining and the other for big business. She noted there                                                                      
were other specialists and she hoped they would enlarge and                                                                     
combine their missions.                                                                                                         
The Commissioner's Office increment request for $94,100 was                                                                     
denied in the subcommittee report.                                                                                              
Accepted, was a Nurse Aid Investigator position request                                                                         
that had been included in legislation the prior year but                                                                        
was later dropped.                                                                                                              
The subcommittee denied a requested increment to increase                                                                       
the Database Programmers Support in the Division of                                                                             
Occupational Licensing.                                                                                                         
Two data processing positions for the Division of Insurance                                                                     
were denied.                                                                                                                    
A request for one Analyst Programmer II position in the                                                                         
Division of Banking, Securities and Corporations was                                                                            
approved. The committee denied three other increments for                                                                       
personnel. However, in the Cost Allocation Plan, there was                                                                      
an additional analysis position that could supplement that                                                                      
Senator Lyda Green pointed out that HB 53 would allow the                                                                       
division to increase the funding that would come to them,                                                                       
which could possibly allow another position to be added in                                                                      
the future.                                                                                                                     
The subcommittee met the target and appreciated the work of                                                                     
the department representatives. Members of the subcommittee                                                                     
beside herself were Senator Tim Kelly and Senator                                                                               
Georgianna Lincoln.                                                                                                             
She then gave the DEPARTMENT OF LABOR subcommittee report.                                                                      
This was difficult because of its small general fund                                                                            
portion. The subcommittee included Senator Sean Parnell,                                                                        
Senator Al Adams and Senator Lyda Green.                                                                                        
The subcommittee recommended an overall reduction of                                                                            
$350,000 general funds.                                                                                                         
Four positions were eliminated, one new position request                                                                        
was denied and one full-time position was changed to part                                                                       
The subcommittee listened to the department's                                                                                   
recommendations of where the cuts should be made, which                                                                         
were accepted. One vacant position in the commissioner's                                                                        
office was eliminated.                                                                                                          
In the Wage and Hour administration, two positions were                                                                         
eliminated with discretion left to the department as to                                                                         
which positions would be cut.                                                                                                   
The department chose to take their austerity belt                                                                               
tightening in the Division of Workers Compensation, the                                                                         
Labor Market Information and in Management Services.                                                                            
The subcommittee denied $80,000 for Mechanical Inspections                                                                      
denied for a Fairbanks Boiler Inspector position.                                                                               
The subcommittee met the goal of a $350,000 reduction.                                                                          
Senator Randy Phillips gave the subcommittee report for the                                                                     
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS. The                                                                                
subcommittee consisted of himself, Senator Al Adams and                                                                         
Senator Dave Donley.                                                                                                            
The subcommittee proposed a $301,000 unallocated reduction                                                                      
to the department as directed by the full committee. He had                                                                     
some concerns with that amount, but he felt the full                                                                            
committee could address later. The House of Representatives                                                                     
recommended an amount that was only $125,000 below FY99.                                                                        
He commended the assistance of the commissioner and                                                                             
department staff. He would work with the commissioner.                                                                          
Senator Randy Phillips then gave the subcommittee report                                                                        
for the DEPARTMENT OF NATURAL RESOURCES. The members of the                                                                     
subcommittee included Senator Pete Kelly, Senator                                                                               
Georgianna Lincoln and himself.                                                                                                 
The subcommittee was given a cap of $38.280 million but                                                                         
actually went below the cap by $116,000.                                                                                        
Land Development in Division of Lands was reduced by                                                                            
$1,008,500.  Essentially, the planning section was                                                                              
eliminated and represented a 13.7 percent reduction in the                                                                      
The subcommittee recommended the Oil and Gas Development be                                                                     
reduced by $100,000.                                                                                                            
The Water Development was reduced by $125,000. This would                                                                       
not effect the hydrology section he stressed.                                                                                   
The subcommittee accepted the Governor's proposed reduction                                                                     
of $75,000 for the University of Alaska-Fairbanks, Export                                                                       
Certification Program of the Division of Agriculture.                                                                           
He again commended the members of the subcommittee, the                                                                         
department and the commissioner.                                                                                                
He added that he recommended to the committee two bills SB
140 to move the Division of Governmental Coordination to                                                                        
the Division of Lands and would have cost savings.  The                                                                         
other bill would move the Animal Industries from Department                                                                     
of Environmental Conservation into the Division of                                                                              
Agriculture.  This had the support of the farming industry                                                                      
and would bring efficiencies and cost savings to state                                                                          
Senator Al Adams asked about the $1 million reduction to                                                                        
the Division of Lands.  He recalled the Taylor Plan that                                                                        
called for the sale of 250,000 acres and was to generate                                                                        
$350 million. This would require considerable land                                                                              
assessment and evaluation. Would that not be considered in                                                                      
the division's budget, he wondered. Senator Randy Phillips                                                                      
responded that, if and when the bill passed, it would be                                                                        
Co-Chair Sean Parnell announced the next meeting agenda to                                                                      
address the **.  He noted the committee was on target for                                                                       
Senator Randy Phillips asked if that was $21 million below                                                                      
the FY99 adjusted figures. He was told it was slightly                                                                          
below the targets.                                                                                                              
Senator Al Adams asked if the debate for education funding                                                                      
and municipal assistance and * would be held in full                                                                            
Co-Chair Sean Parnell announced that the next meeting the                                                                       
committee would address the University of Alaska, the                                                                           
Legislative Affairs Agency, the Office of the Governor and                                                                      
the Department of Corrections. The process was still on                                                                         
target in that the proposed budget was $73 million below                                                                        
the Governor's request. The figures were about $21 million                                                                      
below the funding for the FY99 adjusted base.                                                                                   
Senator Al Adams asked about the Municipal Assistance and                                                                       
Revenue Sharing programs.                                                                                                       
He said there were some conflicting population figures that                                                                     
were effecting the education funding.  He wanted to work                                                                        
with the Department of Education to correct those figures.                                                                      
Senator Gary Wilken commented that he had to remind himself                                                                     
that he volunteered for the position on the Senate Finance                                                                      
Committee.  It was difficult but he appreciated the                                                                             
assistance of his staff and the departments.                                                                                    
Co-Chair John Torgerson asked if the remaining closeouts                                                                        
were all the committee would hear at the next meeting.  Co-                                                                     
Chair Sean Parnell said it depended on bill drafting.                                                                           
There would be a public testimony meeting at 6:00 PM. All                                                                       
members should plan to attend.                                                                                                  
Break 10:22 AM / 10:22 AM                                                                                                       
Co-Chair Sean Parnell announced that the overview                                                                               
information would be posted on the Internet by noon.                                                                            
Impact statements from the departments would be posted as                                                                       
soon as available.                                                                                                              
Senator Al Adams asked to have them delivered to members'                                                                       
Senator Parnell adjourned the meeting at 10:23 AM.                                                                              
SFC-99 (19) 4/14/99                                                                                                             

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